Car Leasing Market size is expected to cross USD 896 Billion by the end of 2035, growing at a CAGR of 7% during the forecast period, i.e., 2023-2035. In the year 2022, the industry size of car leasing was around USD 82 Billion. The growth of this market can be attributed to the factors such as rapid industrialization and a preference for a reliable transportation system that aids in preventing traffic jams and also reduces travel times. As per statistics from World Health Organization, nearly 55% of the world's population resides in urban areas and this number is expected to grow to 68% by the end of 2050. Therefore, a significant section of people is present who use more vehicles, which exacerbates parking issues and clogged roads in metropolitan areas. So, the rise in public transportation systems is estimated to surge the global car market.
Moreover, pollution levels have grown owing to the high use of conventional fuels in cars. The need for shared transportation or automobile rental services has also increased due to the growing costs of cars and vehicles generally. Keeping in mind the average cost of car purchase, interest rate, and loan period, the cost of vehicles in the United States grew by USD 13,000 between 2018 to 2022. Also, the price of the latest truck and cars grew by 11.4 % in 2022 and at the same time, the cost of second-hand cars grew by 7% in the United States.
Growth Drivers
Challenges
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Base Year |
2022 |
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Forecast Year |
2023-2035 |
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CAGR |
7% |
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Base Year Market Size (2022) |
USD 82 billion |
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Forecast Year Market Size (2035) |
USD 896 billion |
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Regional Scope |
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Application (Personal, Commercial)
Car leasing market from the commercial segment is predicted to attain at 65% CAGR in the projected period. The growth of this sector is underpinned by the increasing purchasing power of the people and the high demand for commercial vehicles for various purposes such as transportation, as well as the increasing gross domestic product (GDP) per capita around the world. For instance, the GDP per capita in the US increased by 9.9% in 2021 compared to 2020. This equates to a rise of USD 69,000. In addition, 2022 saw a significant increase in commercial vehicle transactions. For instance, India's commercial vehicle exports increased from 50,334 to 92,300 from April 2021 to March 2022. Moreover, commercial car leasing helps businesses save on upfront costs and ongoing expenses associated with vehicle ownership.
Lease Type (Operating, Finance Lease)
The operating lease segment in the car leasing market is expected to hold a large revenue share by the end of 2035. The sector is growing due to small business growth and the benefits of operating leases, including tax incentives. Worldwide, there has been over 400 million small businesses and out of which about 33 million are based in the United States. An operating lease can be canceled at any time prior to the end of the lease term, usually for a short period of time. In addition, businesses will have more freedom to upgrade vehicles and other assets, reducing depreciation risk and allowing assets to be used without changing ownership. In addition, the lender can claim a reduction in tax payments. For an operating lease, the expected economic life of the asset is less than 75% and the present value of lease payments (P0) is less than 90% of the fair value of the investment.
Our in-depth analysis of the global market includes the following segments:
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Application |
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Lease Type |
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North American Market Forecasts
The North America region is predicted to dominate the global car leasing market by reaching a CAGR of 35% in the time period between 2023 – 2035. The growth of this market is fuelled by the presence of a strong vehicle network in the region, an increase in the number of vehicles, and an increasing trend of leasing vehicles among individuals and businesses. Such as, it is estimated that about 30% of new car owners in the US will choose to lease their vehicles in 2019. In addition, over half of the world's luxury car rentals are manufactured in the United States. Also, New York and Michigan allow the rental of vehicles to owners under the age of 13. In 2022, there were over 17,000 car rental companies operating in the United States.
APAC Market Statistics
In the Asia Pacific region, the car leasing market is assumed to grow substantially, registering a share of 28 % by the end of the projection period. The market growth can be attributed on account of growing economic growth and urbanization in the region. Economic development has given rise to the middle-class population thus driving the demand for personal transportation. Furthermore, the region has a significant market for the automotive industry, it is home to some of the best automotive and car-renting key market players who offer significant investment in vehicle manufacturing and production.
Author Credits: Harshita Srivastava, Saima Khursheed
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