Car Leasing Market | Global Forecast Report 2023-2035

Global Market Size, Forecast, and Trend Highlights Over 2023 – 2035

Car Leasing Market size is predicted to surpass 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 leasing 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.

Car Leasing Sector: Growth Drivers and Challenges

Growth Drivers

Growing Demand for Electric Vehicles (EVs) – As consumer interest in electric vehicles (EVs) and hybrid vehicles surges, the demand for the EV leasing market is increasing, driving the overall car leasing market to grow during the forecast period. For example, 18% of new passenger cars in the (European Union) EU are EVs.
Rise in Car Leasing – Companies in many countries around the world are now open to revenue from car leasing. As it is flexible in terms of vehicle choice and lease terms, people can get their desired vehicles without spending high tons of money which is expanding the trend of car leasing all across the globe. Moreover, a lease eliminates the hassle of selling or purchasing a car when it comes to a new one.
Increasing Number of Vehicles Connected to the Internet of Things (loT) – Vehicles will be connected using the Internet of Things, helping them share information, which is expected to drive the growth of the car leasing market. According to estimated data, more than 90% of new cars sold in the US in 2020 were connected cars.
Constantly Evolving Consumer Preferences – There has been a shift in consumer attitudes toward ownership. Many individuals especially the younger generation are getting attracted to flexible and subscription-based models rather than owning vehicles for the long term. Car leasing aligns with this trend by providing the ability to drive a new vehicle for a fixed period before returning or upgrading it.

Challenges

Issues Associated with Subscription Renewal – Car leasing needs frequent subscriptions along with updating personal information and others. This factor is expected to slow the adoption of car leasing and thus hamper the car leasing market expansion in the upcoming times.
Possibility of Continuing Gap Insurance and Challenges Associated with Long-Term Leasing
Lack of Consumer Awareness and Support in Rural Areas

Car Leasing Segmentation

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 car leasing market includes the following segments:

Application

Personal
Commercial

Lease Type

Operating Lease
Finance Lease

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Car Leasing Industry – Regional Synopsis

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.

Key Questions Answered in the Report

1) What are the major factors driving the growth of the car leasing market?

Ans: The growing demand for electric vehicles and the increasing trend of car leasing are some of the major factors anticipated to drive the growth of the car leasing market.

2) What would be the CAGR of the car leasing market over the forecast period?

Ans: The market is anticipated to attain a CAGR of ~7% over the forecast period, i.e., 2023 – 2035.

3) Who are the major players dominating the car leasing market?

Ans: The major players in the market are Sixt SE, General Motors LLC, Hertz Corporation, Europcar International Sasu, ALD International SA, Mercedes-Benz Group AG, and others.

4) Which segment captures the largest market size in application in the car leasing market?

Ans: The commercial segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities.

5) Which region will provide more business opportunities for the growth of the car leasing market in the future?

Ans: The market in North America is projected to hold the largest market share by the end of 2035 and provide more business opportunities in the future.

Base Year	2022
Forecast Year	2023 – 2035
CAGR	~7%
Base Year Market Size (2022)	~USD 82 billion
Forecast Year Market Size (2035)	~USD 896 billion
Regional Scope	North America (U.S., and Canada) Latin America (Mexico, Argentina, Rest of Latin America) Asia-Pacific (Japan, China, India, Indonesia, Malaysia, Australia, Rest of Asia-Pacific) Europe (U.K., Germany, France, Italy, Spain, Russia, NORDIC, Rest of Europe) Middle East and Africa (Israel, GCC North Africa, South Africa, Rest of the Middle East and Africa)

Car Leasing Market Size & Share, by Lease Type (Operating, Finance Lease); Application (Personal, Commercial) - Global Supply & Demand Analysis, Growth Forecasts, Statistics Report 2023-2035