Europe Car Rental Market

Europe Car Rental Market Overview:

The Europe car rental market size reached USD 23.0 Billion in 2024. Looking forward, IMARC Group expects the market to reach USD 59.0 Billion by 2033, exhibiting a growth rate (CAGR) of 11.1% during 2025-2033. The escalating demand for electric and hybrid rental cars due to stringent environmental regulations, rising tourism and business travel, and growing trend toward flexible mobility solutions represent some of the key factors driving the market.

Car rental refers to a service offered by companies that allows individuals to temporarily lease vehicles for personal or business use. It provides customers with the convenience of accessing transportation without the long-term commitment and expenses associated with vehicle ownership. Car rental agencies maintain a fleet of vehicles that range from economy cars to luxury vehicles, SUVs, and vans. Customers can select a vehicle based on their preferences, requirements, and the nature of their journey. Car rental services offer a flexible and versatile transportation solution, catering to various needs such as travel, tourism, business trips, special events, and emergencies. Renting a car provides individuals with the freedom to explore new destinations, navigate unfamiliar terrains, and maintain control over their schedule. It also eliminates the hassles of vehicle maintenance, insurance, and depreciation associated with ownership. The car rental process generally involves making a reservation in advance, picking up the selected vehicle at the rental location, and returning it at the end of the rental period. Rental terms can vary, ranging from a few hours to several weeks, and prices are typically based on factors such as the type of vehicle, duration of rental, mileage, and any additional services chosen. In recent years, car rental has become an integral part of modern transportation across Europe, offering better convenience, flexibility, and accessibility to numerous travelers, both leisure and business.

Europe Car Rental Market Trends/Drivers:

Expansion of Mobility Solutions

Mobility solutions growth is reshaping the European car rental market as consumers increasingly demand flexible, integrated forms of transport. Car rental companies are diversifying from classic rental offerings to include car-sharing, ride-hailing, and subscription-based services, providing consumers with various options to fulfill their mobility needs. As cities face rising congestion and parking shortages, mobility solutions that offer easy access to a car for short-term use become more and more attractive. Firms that integrate car rental with public transport and ride-sharing offer a seamless, multi-modal mode of transport, thereby making travel more convenient for the customers. In addition, car-sharing plans, wherein one can rent a car for a day or some hours, have gained popularity, especially in urban areas where the transport tariff is high, and parking lot is limited. The change towards converged, on-demand mobility services drives the expansion of the car rental market, as consumers demand versatile, efficient, and cost-effective ways to meet their transportation needs.

Electrification of Fleets

The electrification of fleets is a crucial factor shaping the future of the Europe car rental service market. Moreover, with European governments demanding more sustainable policies and tighter emissions controls, car rental firms are increasingly integrating electric vehicles (EVs) and plug-in hybrids (PHEVs) into their fleets. Consumers are themselves becoming more sustainable, opting for environmentally friendly transport means to lower their carbon footprint. Demand for EVs is further boosted by the availability of incentives like subsidies, tax exemptions, and increased installation of EV charging facilities in Europe. Electric and hybrid cars are provided by car rental companies to meet customers' sustainability needs as well as business requirements to comply. In addition, EVs are likely to have lower operational costs in comparison to conventional vehicles, such as lower fuel and maintenance costs, hence becoming appealing to both customers and car rental businesses. Increased usage of EVs is a vital force driving the market towards greener solutions.

Digitalization and Online Booking

The shift toward digital platforms for booking car rentals is revolutionizing the Europe vehicle rental market. Customers want to book cars online using easy-to-use websites and mobile apps, increasing convenience while minimizing face-to-face transactions. This follows the overall shift toward digital transformation in the travel and hospitality sectors. Online reservation platforms allow consumers to instantly compare prices, vehicle selections, and availability, making for wiser, more efficient decisions. Additionally, the incorporation of sophisticated technologies like machine learning and AI aids automobile rental businesses in streamlining fleet management and tailoring services to consumers. Payment processes are also made effortless through these platforms, thus further encouraging cashless payments. With mobile apps making booking, renting, and returning automobiles even more convenient, car rental businesses are reaching out to technology-oriented consumers as well. This digitalization trend significantly enhances customer experience and market growth in car rental market in Europe.

Increased Tourism and Business Travel

The growth in tourism and business travel has been a significant driver for the European car rental market. As travel restrictions ease and global mobility improves, Europe continues to be a major destination for both leisure and corporate travel. Tourists and business travelers rely on rental cars for the flexibility they offer in exploring the region or moving between meetings and events. With numerous cultural landmarks, business hubs, and scenic destinations across the continent, the demand for vehicle rental market in Europe remains high. Business travelers, especially those attending conferences, trade shows, or client meetings, prefer the convenience of renting cars to meet their transportation needs, providing them with efficiency and comfort. The continued rise in international and domestic travel in Europe is directly boosting the demand for rental vehicles, which continues to propel the market forward. As travel patterns return to pre-pandemic levels, this trend remains a central driver of growth.

Growth of Subscription-Based Models

Subscription-based models are emerging as an innovative driver in the Europe truck rental market. These models offer customers the flexibility to rent vehicles for a monthly fee without the long-term commitments of traditional leasing or ownership. Consumers can choose from a wide range of vehicles based on their needs, whether for a few months or longer, without worrying about maintenance, insurance, or depreciation. This model is particularly appealing to customers who value flexibility and want access to different types of vehicles over time. Additionally, subscription-based services often include additional perks, such as the ability to switch cars or receive maintenance services, enhancing customer convenience. The appeal of this model is growing among urban dwellers, who may not require a vehicle all year round but still want the option to drive when needed. The rise of subscription-based services aligns with changing consumer preferences and plays a pivotal role in the evolving car rental market share Europe.

Europe Car Rental Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the Europe car rental market report, along with forecasts at the regional and country levels for 2025-2033. Our report has categorized the market based on booking type, rental length, vehicle type, application, and end-user.

Breakup by Booking Type:

• Offline Booking
• Online Booking

The report has provided a detailed breakup and analysis of the market based on the booking type. This includes offline and online booking.

Breakup by Rental Length:

• Short Term
• Long Term

The report has provided a detailed breakup and analysis of the market based on the rental length. This includes short and long term.

Breakup by Vehicle Type:

• Luxury
• Executive
• Economy
• SUVs
• Others

The report has provided a detailed breakup and analysis of the market based on the vehicle type. This includes luxury, executive, economy, SUVs, and others.

Breakup by Application:

• Leisure/Tourism
• Business

A detailed breakup and analysis of the market based on the application has also been provided in the report. This includes leisure/tourism and business.

Breakup by End-User:

• Self-Driven
• Chauffeur-Driven

A detailed breakup and analysis of the market based on the end user has also been provided in the report. This includes self- and chauffeur-driven.

Breakup by Country:

• Germany
• France
• United Kingdom
• Italy
• Spain
• Others

The report has also provided a comprehensive analysis of all the major regional markets, which include Germany, France, the United Kingdom, Italy, Spain, and others.

Europe Car Rental Companies:

The report has also provided a comprehensive analysis of the competitive landscape in the market. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided.

Europe Car Rental Market Recent News:

• June 2025: Europcar Mobility Group UK launched a long-term rental service for EVs and PHEVs, offering businesses access to the latest models for periods ranging from three to twelve months. This development impacted the Europe car rental market by enhancing flexibility and meeting sustainability demands.
• June 2025: Drivalia, a mobility provider, expanded into the Czech Republic’s short-term car rental market, offering electric and hybrid vehicles. This development influenced the Europe car rental market by enhancing digitalization, flexibility, and sustainability, catering to the growing demand for eco-friendly mobility solutions.
• May 2025: Schiphol opened one of Europe's largest car rental service centers, enhancing service efficiency and promoting sustainable mobility. This development positively impacted the Europe Car Rental market by improving infrastructure and facilitating the integration of electric vehicles, aligning with the growing demand for sustainable transportation solutions.
• February 2025: Ush and Poppy launched Belgium’s first remote-driven car service at the Port of Antwerp-Bruges. This innovation impacted the Europe car rental market by enhancing vehicle accessibility, efficiency, and convenience, marking a significant shift towards advanced, on-demand mobility solutions.

Europe Car Rental Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the Europe car rental market from 2019-2033.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the Europe car rental market.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the Europe car rental industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.