Car Leasing Market Analysis North America,Europe,APAC,South America,Middle East and Africa - US,China,UK,Germany,France - Size and Forecast 2023-2027

Car Leasing Market Forecast 2023-2027

The Car Leasing Market size is estimated to increase by USD 41.82 billion, at a CAGR of 7.73% between 2022 and 2027. 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.

What will be the Size of the  Market During the Forecast Period?

To learn more about this report, View Report Sample

The automotive industry is witnessing a notable shift towards hassle-free alternatives like car rental, short-term rentals, and ride-hailing applications, catering to evolving preferences and addressing long-term commitments. These services cover various segments and vehicle types, providing flexibility in urban areas where parking and congestion are prevalent concerns. With options such as long-term leases and vehicle subscription services, consumers can enjoy mobility solutions without the burden of ownership, offering predetermined timeframes and regular payments.

Market Dynamic

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 2022 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.

Market Driver

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.

Market Trends

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.

Market Challenge

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.

Market Customer Landscape

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 market forecasting report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and forecasting strategies.

Global Car Leasing Market Customer Landscape

Who are the Major Car Leasing Market Companies?

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 20 market companies, including:

• 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
• Zoomcar India Pvt. Ltd.

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.

Market Segmentation

This market report extensively covers market segmentation by end-user (commercial and non-commercial), type (open-ended and close-ended), and geography (North America, Europe, APAC, South America, and Middle East and Africa).  Furthermore, the report includes historic market data from 2017 to 2021. 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.

End-user Analysis

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.

Get a glance at the market contribution of various segments Request Free PDF Sample

The commercial segment was the largest segment and was valued at USD 57.49 billion in 2017. 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.

Type Analysis

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.

Which are the Key Regions for the Car Leasing Market?

North America is estimated to contribute 33% to the growth of the global market during the forecast period.

For more insights on the market share of various regions Request Free PDF Sample now!

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.

Market Analysts Overview

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.

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.

Segment Overview

The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• End-user Outlook
  • Commercial
  • Non-commercial
• Type Outlook
  • Open-ended
  • Close-ended
• Geography Outlook
  • North America
    • The U.S.
    • Canada
  • Europe
    • U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Chile
    • Argentina
    • Brazil
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

Market Scope
Report Coverage	Details
Page number	166
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 7.73%
Market growth 2023-2027	USD 41.82 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	7.25
Regional analysis	North America, Europe, APAC, South America, and Middle East and Africa
Performing market contribution	North America at 33%
Key countries	US, China, UK, Germany, and France
Competitive landscape	Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks
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.
Market dynamics	Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period.
Customization purview	If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

View PDF Sample

What are the Key Data Covered in this Market Research and Growth Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market research and growth between 2023 and 2027
• Precise estimation of the market size and its contribution to the market in focus on the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the market across North America, Europe, APAC, South America, and Middle East and Africa
• A thorough analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market companies

We can help! Our analysts can customize this market research report to meet your requirements. 

Get in touch