Europe Car Leasing Market Size - By Vehicle, By Lease-Type, By Propulsion, By Application, Forecast, 2024 - 2032

Europe Car Leasing Market Size

The Europe car leasing market size was valued at USD 28 billion in 2023 and is projected to grow at a CAGR of 6.1% between 2024 and 2032. The growth of the market can be attributed to the growing transition towards electric vehicles (EVs) and the rising availability of broader range of EV models in the region.
 

According to statista, in 2023, there were around 371 BEV models available for buyers in Europe as compared to 253 BEV models in 2022 . This was an increase of 46.6 percent compared to the available models recorded in 2022. Leasing provides an attractive solution for customers hesitant purchase EVs due to concerns about future technology or depreciation.
 

European governments are offering incentives, such as tax benefits and subsidies, for leasing electric and hybrid vehicles to promote eco-friendly transportation. For instance, in April 2022, Poland's state-owned National Fund for Environmental Protection and Water Management allocated  USD 125 million for subsidies for EV buyers.
 

The program is aimed at reducing air pollutant emissions by decreasing consumption of fossil fuels in transport, mainly through co-financing purchase or leasing of zero-emission vehicles. This is further supported by strict emissions standards across the region. Furthermore, various European countries are implementing regulations that require companies to incorporate more low-emission vehicles in their fleets, further fueling leasing demand.
 

Leasing and shared mobility services provide urban residents with crucial flexibility, especially when daily car use is unnecessary. Many city dwellers rely on public transportation for their regular commutes but choose to lease or rent vehicles for occasional trips. This method allows them to access a car only when needed, avoiding the financial burden of ownership.  
 

Leasing helps users avoid the significant depreciation associated with car ownership and reduces concerns about maintenance and insurance expenses. Typically, leasing agreements cover maintenance and repairs, which is beneficial for those lacking the time or space to handle these tasks. In shared mobility, users eliminate maintenance and upkeep costs entirely, focusing solely on short-term vehicle use.
 

Europe Car Leasing Market Trends

European governments are enforcing strict emission standards and incentivizing electric vehicles (EVs). Fleet leasing companies are shifting to EVs to meet CO2 reduction targets and sidestep carbon emission penalties. Companies operating in the market are forming strategic partnerships to facilitate the transition to electric vehicle fleets across Europe. For instance, in July 2024, Ayvens, a player in sustainable mobility, signed a MoU with BYD, a new energy vehicle (NEV) manufacturer. This collaboration aims to bolster their business relationship and enhance the distribution of electric passenger cars and light commercial vehicles (LCVs) for both corporate and retail clients in Europe.
 

Moreover, various European firms are emphasizing sustainability, integration Environmental, Social, and Governance (ESG) principles into their core strategies. Leasing EVs aligns with their sustainability commitments, helping them reduce their carbon footprint while meeting corporate social responsibility goals.
 

Major players operating in the market are emphasizing on mergers & acquisitions to enhance their car leasing comparision. For instance, in October 2024, Carwow Group acquired Gridserve Car Leasing from Gridserve, a UK based on-the-go electric vehicle (EV) charging company. The acquisition is in line with company’s strategy to speed up in online car changing marketplace with major focus on EV lease deals. The acquisition will also enhance company’s car leasing comparision engine and will offer Carwow users with an broader range of car leasing options from various brokers acorss UK.
 

In the Europe car leasing market, a major risk revolves around the unpredictable residual values of leased vehicles. Leasing firms depend on precise predictions of a vehicle's end-of-lease value to set lease rates. However, the swift technological changes and evolving consumer preferences, forecasting a car's future value has grown more challenging. For instance, internal combustion engine (ICE) vehicles depreciate more rapidly than anticipated as the market pivots to electric and hybrid models. Such unpredictability poses a financial risk for leasing companies, especially if vehicle depreciation outpaces their forecasts.
 

Europe Car Leasing Market Analysis

Based on lease type, the market is segmented into open-ended and close-ended. In 2023, the close-ended segment accounted for over 65% of the market share and is expected to exceed USD 30 billion by 2032. Close-ended leases offer customers fixed monthly payments for the duration of the lease. This predictability appeals to both businesses and individuals, helping them to avoid unexpected costs tied to car ownership, such as depreciation and maintenance. With set terms, close-ended leases provide clarity on expenses, enabling effective budgeting without financial surprises at lease-end.
 

Customers in a close-ended lease aren't accountable for the car's market value once the lease concludes. Regardless of market-driven depreciation or model changes, the customer simply returns the vehicle. This feature holds particular significance in Europe, where the transition to electric vehicles (EVs) and swift technological changes complicate predictions of vehicle resale values. This is expected to drive the growth of segment during the forecast period.
 

Based on application, the Europe car leasing market is divided into commercial and individual. The commercial segment held around 71% of the market share in 2023. Leasing enables businesses to manage extensive vehicle fleets without incurring substantial upfront costs. This method ensures predictable, fixed monthly expenses, simplifying budgeting for businesses, particularly SME. Many European countries offer tax deductions on leased vehicles, further encouraging businesses to lease rather than purchase.
 

Furthermore, leasing preserves capital, allowing reinvestment into core operations and enhancing efficiency. As environmental responsibility becomes a priority, companies increasingly lease electric or hybrid vehicles to meet ESG goals and reduce carbon footprints. Leasing electric vehicles also offers businesses greater cost-effectiveness and flexibility compared to ownership. This is expected to drive the adoption of car leasing among businesses.
 

Germany car leasing market accounted for 23% of the revenue share in 2023 and is poised to reach around USD 9 billion by 2032. The presence of large industrial and corporate sector in Germany is driving the demand fleet leasing among both SME and large enterprises. Corporate customers are leasing vehicles to lower the financial burden of fleet ownership to newer, more efficient vehicles. Companies operating in German market are focused on strategic acquistions to enhance their leasing services in the country.
 

For instance, in January 2024, Mobilize Lease&Co, the subsidiary of Mobilize Financial Services acquired Mobility Concept and MeinAuto, divisions of the MeinAuto Group, a major player in the German car leasing market. The acquisition will speed up the deployment of full services leasing offers on the German market to meet the new mobility needs of customers. 
 

In Europe, heightened environmental awareness and stringent EU regulations are propelling the demand for electric vehicle leasing. In response, numerous leasing firms are broadening their EV fleets, catering to businesses and consumers who wish to reduce their environmental footprint without the financial burden of ownership.
 

In North America, sectors such as logistics, transportation, and delivery services are increasingly leaning towards leasing. They value fleet management services that optimize vehicle utilization, cut costs, and streamline logistics. Additionally, North American consumers are gravitating towards leasing for its lower monthly payments compared to traditional car loans. This preference enables them to access newer models equipped with cutting-edge technology and safety features, all without the weight of long-term financial commitments.
 

Countries such as China, India, and regions in Southeast Asia are witnessing rapid urbanization, leading to a surge in demand for adaptable mobility solutions, notably car leasing. Urban population in congested urban centers of the region, are turning to leasing to sidestep the financial and logistical challenges of vehicle ownership, such as parking and maintenance. Moreover, the Asia-Pacific region is seeing a rise in corporate fleet leasing, driven by an influx of multinational corporations and local enterprises. Industries including IT, manufacturing and logistics are choosing leasing as a strategy to lower upfront capital outlay and enhance operational efficiency.
 

Europe Car Leasing Market Share

Volkswagen Financial Services and Arval BNP Paribas Group collectively held a market share of around 20% in the Europe car leasing industry in 2023. Volkswagen Financial Services is expanding its electric vehicle portfolio in line with the Volkswagen Group's electrification strategy. The company is heavily investing in infrastructure and financial products to enhance EV leasing. This effort is driven by increasing customer demand for sustainable mobility and the EU's push for cleaner transportation.
 

Arval BNP Paribas Group is rapidly growing its corporate fleet leasing division, offering a comprehensive range of fleet management solutions, including telematics, fuel efficiency monitoring, and maintenance services. Additionally, the company is enhancing its Mobility as a Service (MaaS) offerings, enabling businesses to integrate traditional leasing with shared mobility and flexible leasing options. This is expected to help the company in maintaining a strong hold in the market.
 

Europe Car Leasing Market Companies

Major players operating in the Europe car leasing industry are:

• Alphabet
• Arval BNP Paribas
• Athlon
• Ayvens
• Free2Move Lease
• Hertz Lease
• Leasys
• Mobilize Lease&Co
• Sixt Leasing
• Volkswagen Financial Services
   

Europe Car Leasing Industry News

• In May 2024, Renault partnered with Santander to dominate the European market. Renault's financing division, Mobilize Financial Services, is collaborated with Spanish bank Santander to establish a joint venture focused on the flourishing car leasing industry in Europe.
   
• In March 2024, Raiffeisen Bank Romania and Raiffeisen Rent have formed a strategic partnership with SIXT Group Romania to provide companies and individuals in the Romanian market with various personalized mobility services, including car rentals, operational leasing, and fleet management for both cars and commercial vehicles weighing up to 3.5 tons.
   

The  Europe car leasing market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue ($ Mn/Bn)  and fleet size (units) from 2021 to 2032, for the following segments:

Click here to Buy Section of this Report

Market, By Vehicle

• Hatchback
• Sedan
• SUV
• Crossover

Market, By Lease Type

• Open-ended
• Close-ended

Market, By Propulsion

• ICE
• Electric

Market, By Application

• Commercial
• Individual

The above information is provided for the following countries:

• UK
• Germany
• France
• Italy
• Spain
• Russia
• Nordics
• Romania