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The car leasing market size is estimated to increase by USD 55.3 billion and grow at a CAGR of 9.24% between 2023 and 2028. The market size is forecast to. The market's expansion relies on multiple factors, notably the growing technological obsolescence of older vehicles, which drives demand for newer models. Additionally, businesses increasingly view personal transportation as an efficient means of operation, further fueling market growth. Moreover, the economical methods of acquiring a car, such as leasing or subscription services, contribute significantly to market development. These trends reflect a shift towards more modern and cost-effective transportation solutions, catering to both individual and corporate needs in today's dynamic automotive landscape.
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The market is witnessing significant growth driven by evolving transportation needs and the demand for hassle-free alternatives among city residents. With an increasing preference for affordability and flexibility, consumers are opting for car leasing services over traditional ownership. The market caters to various segments, including short-term rentals, long-term leases, and subscription-based services. Safety and cleaning protocols, along with IoT adoption and smart city initiatives, enhance the appeal of leasing options. Electric and hybrid vehicles are gaining traction in this market, offering sustainable mobility solutions. With urban areas facing challenges like parking and congestion, provides a convenient and cost-effective solution for commuters, driving further market expansion. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage. The relays market is adapting to evolving preferences in the automotive sector. Segments covered include vehicle type, from car rental to ride hailing applications and vehicle subscription services. Short term rentals, long term leases, and regular payments are driving demand for advanced relay solutions in these applications.
One of the key factors driving the car leasing market growth is the effective means of personal transportation for businesses. Cars are an essential means for small and medium-sized enterprises (SMEs) in order to fulfill the personal transportation requirements of employees. As a result, a substantial capital outflow is required for effectively transporting employees. Therefore, car leasing acts as an alternative means and provides different advantages to businesses.
Moreover, the disadvantage of owning a vehicle is that it is a depreciating asset and the company has to incur high costs to upgrade a vehicle. Thus there is an increasing demand for car leasing among companies as the lessee has to pay only for the depreciating factor of the vehicle and can upgrade easily after the expiration of the lease period. Hence, such factors are expected to drive market growth during the forecast period.
A key factor shaping the car leasing market growth is the off-lease cars fueling the used car market. There is a tremendous shift from on-lease vehicles to off-lease every year in the global car leasing market. Several car leasing dealers have to manage a significant number of off-lease vehicles that stay unused or under-utilized in the vehicle stockpile. As off-lease vehicles significantly impact the earnings of car leasing companies, these companies are selling old off-lease cars as used cars.
Moreover, several car leasing companies provide the lessee the choice to purchase the vehicle after the lease period. As a result, this would enable the lesser to know the quality of the vehicle, they would be willing to pay the residual amount and permanently own the vehicle. In addition, the increased selling of these off-lease cars as used cars enables them to maintain a profitable business. Hence, such factors are expected to drive market growth during the forecast period.
The increased challenge from on-demand taxi operators is one of the key challenges hindering the car leasing market growth. There is an extensive use of taxi services across urban areas for personal transportation. There is an increasing preference for on-demand taxis among people as it is a convenient option in terms of the time spent on finding a parking spot and the amount spent on travel. Additionally, one of the significant challenges regarding urban areas is space constraints.
Moreover, the increasing traffic congestion in cities has made driving cars a tiring and tedious task. As a result, there is an increasing use of on-demand taxis for personal commuting is diluting the demand for car leasing, especially in urban locations where car leasing is prevalent. Hence, such factors are negatively impacting the market which in turn will hinder the market growth during the forecast period.
The market research report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Car Leasing Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Autoflex Leasing: The company offers car leasing services such as new vehicle leasing and pre-owned leasing.
The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market is experiencing rapid growth driven by changing consumer preferences and the need for enhanced mobility solutions, particularly among city residents. Offering flexibility and convenience, car leasing caters to various segments and lease types, accommodating evolving mobility needs. Despite potential pitfalls such as fluctuating interest rates and insurance costs, the market benefits from the availability of the latest vehicle models and subscription-based services. With the integration of IoT and connectivity features, leasing companies like Reliance Jio and Careem are enhancing vehicle security, real-time insights, and maintenance efficiency. As urbanization accelerates and global mobility coverage expands, presents a transformative shift towards accessible and affordable transportation options.
The commercial segment is estimated to witness significant growth during the forecast period. There is an increasing need for cars for the transportation of employees which is fuelling its demand across this segment as car leasing is more cost-effective than buying a car. Several SMEs enter into a lease agreement with car leasing companies, which enables employees to use leased cars. The main advantage of these car leasing companies is that it enables their employees the option to purchase vehicles at their residual value at the end of the vehicle's lease period.
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The commercial segment was the largest segment and was valued at USD 61.1 billion in 2018. Additionally, it also offers several tax benefits for car purchases by estimating the total amount of taxes on the basis of monthly payments. The main factor which is fuelling the adoption of car leasing across these enterprises is the numerous advantages it offers such as the lessee companies can share the vehicle with an employee during the vehicle lease period without being concerned about vehicle ownership documentation, as they are technically the owner of the vehicle. Furthermore, these companies provide lessee companies with multiple fleet management tools to manage the company's transportation resources in a better manner. Hence, such factors are expected to fuel the growth of this segment which, in turn, will drive the market growth during the forecast period.
Based on type, the segment is classified into open-ended and close-ended. Open-ended leasing can be referred to as a leasing contract where the lease term doesn't have a preset definite duration. The main advantage of the open-ended leasing contract is that it provides greater freedom in terms of when the lessee can return the vehicle than a closed-end lease, in which the lease term is predefined at the outset, and the lessee returns the vehicle at the conclusion of the term. In this segment, there is no predefined length of the lease, and as long as the lessee adheres to the terms established by the lessor, they may continue to use the vehicle. Hence, such factors are expected to fuel the growth of this segment which in turn will drive the market growth during the forecast period.
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Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. Car purchases and financing are two main factors which are dominating the car market in North America. However, there is significant growth in the car leasing market in North America as it enables users to upgrade to new vehicles with advanced features over a short span. The North American car leasing market is estimated to be approximately one-fourth of the volume of the global market.
Some of the key factors that make the region favorable to the automotive market include quality infrastructure, high purchasing power, and the lifestyle of the individuals. There is also an increasing adoption of car leasing in North America as it is cost-effective for the user, wherein the user only needs to pay for the vehicle usage rather than incur the cost of buying a vehicle. Furthermore, there are numerous launches of new vehicles with advanced features in North America and car leasing enables individuals to shift to a new vehicle after the lease period. Hence, such factors are expected to drive market growth in the region during the forecast period.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
Europe Vehicle Leasing Market: Europe Vehicle Leasing Market by Mode of Booking,Type - Forecast and Analysis
Automotive Fleet Leasing Market: Automotive Fleet Leasing Market Analysis APAC, Europe, North America, Middle East and Africa, South America - US, China, UK, Germany, France - Size and Forecast
Multi Utility Vehicle (MUV) Rental Market: Multi Utility Vehicle (MUV) Rental Market Research by Type, Application, and Geography Forecast and Analysis
The market offers a hassle-free alternative for individuals seeking mobility solutions without the burden of ownership, providing options for long-term commitment through various lease types and subscription models. With a wide range of vehicle types and latest models available, consumers benefit from rapid adoption of these services, especially amid economic uncertainties and changing interest rates. The market caters to diverse segments, including short-term rentals, long-term leases, car sharing services, and ride-hailing applications, offering transparent pricing and real-time information through mobile apps and telematics. As urbanization accelerates, company adoption and team member engagements drive the demand for both commercial vehicles and passenger vehicle categories, marking a transformative shift in the automotive industry.
Moreover, the market offers a diverse array of options tailored to suit varying needs, including different vehicle types and lease types, accommodating both short-term rentals and long-term leases. Despite challenges such as reduced consumer demand and travel restrictions, the market remains active, providing lease deals and facilitating activities even amidst uncertainties. With a focus on enhanced accessibility and efficient communication, providers ensure that consumers can easily access leasing services and stay informed about available options. Whether it's for ride-hailing applications or personal use with predetermined time agreements, car leasing continues to offer flexible solutions for transportation needs.
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Car Leasing Market Scope |
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Report Coverage |
Details |
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Page number |
168 |
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Base year |
2023 |
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Historic period |
2017-2021 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 9.24% |
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Market growth 2024-2028 |
USD 55.3 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
7.84 |
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Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
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Performing market contribution |
Europe at 34% |
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Key countries |
US, China, UK, Germany, and France |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Autoflex Leasing, Avis Budget Group Inc., Bayerische Motoren Werke AG, BNP Paribas SA, Caldwell Leasing, Deutsche Leasing AG, Enterprise Holdings Inc., Executive Car Leasing Co., ExpatRide International Inc., Hertz Global Holdings Inc., International Car Lease Holding, LeasePlan Corp. NV, Masterlease Group, Mazda Motor Corp., Mercedes Benz Group AG, Orix Corp., Porsche Automobil Holding SE, SIXT SE, Societe Generale SA, and Zoomcar India Pvt. Ltd. |
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Market dynamics |
Parent market analysis, Market forecasting, market research and growth, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the market forecast period |
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Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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