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The Europe vehicle leasing market size is estimated to grow by USD 12.17 billion at a CAGR of 4.5% between 2023 and 2028. The market's growth is influenced by several factors, including cost-effective methods of obtaining vehicles, the increasing demand for vehicle leasing from small and medium-sized enterprises (SMEs), and the rising technological obsolescence of older vehicles. These elements collectively drive market expansion, reflecting economic considerations, business needs, and advancements in vehicle technology. The cost-effective ways of acquiring vehicles highlight the financial advantages of leasing over purchasing. Simultaneously, the growing demand for vehicle leasing from SMEs underscores the flexibility and scalability that leasing offers to smaller businesses. Additionally, the technological obsolescence of older vehicles points to the need for more modern and efficient vehicle options. Thus, the interplay of these factors delineates the landscape for the anticipated growth of the market.
The report provides market size, historical data spanning from 2018 to 2022, and future projections, all presented in terms of value in USD billion for each of the mentioned segments.
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The market is evolving rapidly, driven by advancements in electric vehicles, big data, and the IoT (Internet of Things). Automotive rental and leasing services are becoming integral to the tourism industry and smart cities initiatives. On-demand taxi services and commuter cars cater to urban mobility needs, while utility trailers and recreational vehicles serve various customer demands. Automobile leasing companies leverage blockchain for secure lease contracts and residual value tracking. The rise of e-commerce and rapid urbanization boosts demand for new vehicles and hybrid electric vehicles. Enhanced customer service and innovative solutions by leasing companies are transforming the market landscape. Retail store now offer car equipment rental, and sellers find opportunities in lease contracts. The market's future looks promising, with a focus on sustainability and efficiency. 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 cost-effectiveness of leasing as a way of obtaining a vehicle is notably driving the growth of the market. A vehicle is an asset whose value depreciates over time. The most popular method of acquiring a vehicle is by paying for the vehicle or through financing options (i.e., owning it). Most vehicle dealership centers have dedicated personnel to assist buyers with purchasing vehicles through loans. Buying a vehicle permanently may not be cost-effective for small and medium-sized enterprises (SMEs), which can increase their fixed costs.
However, leasing a vehicle is a more viable solution than buying a vehicle. In leasing, the lessee only needs to pay a monthly fee, along with certain additional charges and taxes, during the period of use. Therefore, the attractive value proposition offered in leasing a vehicle rather than purchasing and owning it is a major driver that will drive growth in the market growth during the forecast period.
The car subscription model of car leasing is the primary trend shaping market growth. Car leasing companies are opting for vehicle subscriptions that allow users to lease a vehicle for a monthly subscription fee, which covers roadside assistance, vehicle maintenance costs, and insurance. The subscription packages allow users to change cars easily, based on their availability. Moreover, the subscription plan covers premium insurance for the vehicle irrespective of the location where it is being used. It includes extra wear and maintenance costs for a combined monthly fee.
Additionally, prominent market players are partnering with automotive OEMs to offer new leasing models. For instance, in January 2020, ALD SA partnered with Volvo Cars to provide full-service leasing services to both private and corporate customers of Polestar (a Volvo Cars brand) through a fully digital online solution. Hence, the car subscription model of car leasing is a positive trend for the growth of the market in Europe during the forecast period.
The challenge posed by on-demand taxi operators may hinder market growth. Taxi services are broadly used in urban areas for personal transportation. On-demand taxis are a convenient option in terms of the time spent on finding a parking spot and the amount spent on travel. Moreover, traffic congestion in cities renders driving in cities a tedious and difficult task. Thus, the rise in the use of on-demand taxis for personal commutes is diluting the demand for car leasing.
In addition, on-demand taxis have fewer operator restrictions. On-demand taxi operators register drivers with cars under their brand, which allows the driver to pick up and drop off customers who choose the ride on the digital platform of the operator. The low capital expenditure involved in on-demand taxi services intensifies the challenge posed by on-demand taxi companies to car leasing companies, which can become a major challenge for the growth of the market 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.
Key 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.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 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 passenger cars segment is estimated to witness significant growth during the forecast period. The cost-effective nature of leasing cars rather than buying cars is driving the popularity of leased cars in Europe. Car leasing also offers customers the option to buy the vehicle at the end of the lease period. Moreover, customers have the choice of moving to a new and advanced vehicle model after the expiration of the car lease period.
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The passenger cars segment was the largest segment and was valued at USD 35.15 billion in 2018. Factors such as the growing demand for SUVs, hatchbacks, and sedans in Europe are acting as major market enablers for the passenger cars segment. The growing demand for convenience and safety in passenger cars by customers is driving the adoption of many additional features in vehicles. Thus, such factors will drive growth in the growth of the passenger car segment in the Europe Vehicle Leasing Market 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 to 2028, as well as historical data from 2018 to 2023 for the following segments.
Car Leasing Market: Car Leasing Market Analysis North America, Europe, APAC, South America, Middle East and Africa - US, China, UK, Germany, France - Size and Forecast
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
The market in Europe is experiencing significant growth, driven by factors such as E commerce, on demand taxi services, and the increasing adoption of electric cars. Rental or leasing services are expanding, offering a range of options from buses to premium and expensive vehicles, catering to the diverse needs of consumers with busy lifestyles. Innovations like IoT technology, blockchain technology, and machine learning are enhancing lease contracts, ensuring verified data and legal agreements. Leasing companies are leveraging these technologies to provide efficient transportation systems and real-time data diagnostics of vehicles. Corporate fleets benefit from long term leasing with low maintenance costs and low rate of interest.
Furthermore, awareness among consumers about sustainable transportation options and the benefits of leasing cars, such as gap insurance and additional fees transparency, is rising. The shift towards electric and hybrid vehicles is driven by concerns over air pollution, carbon emissions, and climate change. This transition supports the demand for sustainable transportation options and aligns with stringent emission norms. Overall, the market is set to thrive, offering premium and moderate cars with without driver facilities, meeting the growing population demand for on demand vehicles.
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Market Scope |
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Report Coverage |
Details |
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Page number |
148 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 4.5% |
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Market Growth 2024-2028 |
USD 12.17 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
3.5 |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
ALD SA, Allane SE, Arval Service Lease, Bayerische Motoren Werke AG, Central Contract S.O.T Ltd., Central UK Vehicle Leasing Ltd., Deutsche Leasing AG, ExpatRide International Inc., Groupe BPCE, King and Mayr GmbH and Co. KG, LocautoRent S.p.A., Mercedes Benz Group AG, Millennium Leasing sp zoo, PKO Bank Polski, Porsche Automobil Holding SE, PSA Automobiles SA, Rivervale Cars Ltd., Sofina SA, and Stellantis NV |
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Market dynamics |
Parent market analysis, Market Forecasting, 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 market forecast period. |
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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. |
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 Type
7 Market Segmentation by Mode of Booking
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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