US Car Rental Market

U.S. Car Rental Market Size

The U.S. car rental market size was valued at USD 35.2 billion in 2024 and is estimated to register a CAGR of 5% between 2025 and 2034. There is a growing demand for tourism-related travel, which will subsequently fuel demand in the market. There has been an increase in traveling for vacations, business purposes, and even leisure, which has fueled the need for rental vehicles. Recent years have also shown a shift from preferring public options to using private vehicles, especially due to the pandemic; tourists are looking for more flexibility and comfort.

Car rental services are now in great demand as more and more tourists and travelers are exploring different regions, which benefits the travel industry as a whole. Renting a car has proven to be more convenient, especially during international trips. This is evident with the data offered by the US Department of Commerce that shows rentals in the U.S. increased by 246%, with the number of international tourists reaching 66.5 million.

During the same period, travel spending by foreign tourists soared by 153%, amounting to USD213 billion. Moreover, the sector that benefitted the most from it was the tourism industry, which saw a growth of 63% in American jobs supported by it, rising to 1.6 million. Rental businesses are also stepping up by providing a wider range of cars, such as electric cars, SUVs, and other vehicles that can accommodate families.

The U.S. car rental market is growing due to increasing use of online platforms and mobile applications. Also, car rental services are now incorporating digital solutions into their rentals that enable customer satisfaction and experience. Now, consumers can use their mobile applications to select and book the vehicle of their choice and even unlock or begin driving the vehicle through their phones. This new trend of technology adoption has made car rentals popular, and revenues have increased from younger users who are looking for alternatives to this easily accessible service.

U.S. Car Rental Market Trends

The growth of the market is propelled by the rising territory for consumer spending on transportation. Governmental authorities focus on increasing spending by people on travel and mobility for economic growth because they recognize the potential for increasing disposable income. Consumers even spend money on renting cars for vacations and business meetings.

Spending on transportation is greater because of increased disposable income, low fuel costs, and the pursuit of new experiences such as road trips, vacations, and short getaways. A lot of users have moved towards renting cars instead of taking public transport since, for short-term trips, it provides them greater flexibility.

For example, in this regard, the US Department of Transport indicates that based on the example period, the greatest consumer expenditure incurred annually is still in the area of transport, which was USD 12,295 in 2023. Car rentals incorporate those goods and services expected to be used in travel and are thus on the increase in demand because of the increasing demand for personal transportation supplements.

One of the biggest problems for the U.S. car rental market is the increasing expenditure on fleet maintenance and vehicle purchase. The growth in the price of new automobiles, as a result of the supply chain challenges and semiconductor deficiency, has unfavourably impacted the car rental companies as they will now incur more costs for fleet expansion. These increased operating costs might, however, be recovered by increasing the rental rates.

Also, now with increased demand for electric vehicles (EVs) and other niche vehicles, companies have to spend more on fleet diversification, which adds to the financial strain. These cost pressures, combined with the volatility of the market and demand, make it very difficult for car renting businesses to remain profitable while maintaining lower prices and a wider variety of vehicles.

U.S. Car Rental Market Analysis

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Based on rental length, the U.S. car rental market is divided into short term and long term. In 2024, the short-term segment held a market share of over 65% and is expected to cross USD 36 billion by 2034.

• One of the reasons for the growth of this segment is the increase in domestic and international tourism. More people are looking to have staycations or take short trips, which has led to the increased need for short term rentals for day trips or weekend trips or even for other quick travel needs.
  
• There is a growing tendency among people to rent rather than own cars or use them like public transport. Based on the trends where customers are more inclined towards the convenience and the economics of short-term trips, rental car companies are also beginning to offer more options concerning short term rentals.
  

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Based on application, the U.S. car rental market is categorized into leisure/tourism and business. The leisure/tourism segment held a market share of around 64% in 2024.

• There are expectations for growth in leisure and tourism as families and group travels become more common. Their need is shifting towards rental cars. Renting a car makes it easier to manage everything since there are no public transport or rideshare restrictions that have to be worked around while trying to see multiple places, making travel much simpler.
  
• Moreover, renting cars for road trips or family holidays is often considerably cheaper than booking several flights or covering other travel expenses, which makes it a preferred option for bigger groups. The increasing popularity of group-oriented travel is increasing the growth of the leisure and tourism segment of the market.
  

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California dominated the U.S. car rental market with a major share of over 20% in 2024 and the California leads the market in the region.

• The car rental business surged remarkably in the U.S. and contributed immensely to the growth in California’s economy. Cars are an important component for tourism in California as it is one of the prime travel destinations in the U.S. because of its beaches and national parks.
  
• This state has a high annual foreign visitor count, which leads to increased spending. For most tourists, hiring a car is the easiest and most effective way to experience the natural beauty and sites of interest.
  
• Tourists can simply hop on a rental within minutes of landing in the state. The scenic drives available, including the Pacific Coast Highway, and access to several beautiful locations make these rentals extremely convenient. Rental providers are also meeting this new market demand with affordable rates catering to everybody.
  
• The international tourism sector’s increase, primarily from Latin America and onto Europe, significantly contributes to the expansion of the Florida car rental market. Years have passed, and the state has been appealing to people from different parts of the world.
  
• Its closeness to the Caribbean and South America, as well as the cultural aspects shared with some Latin countries, puts the state in a good position. Most of these tourists prefer renting cars over using public transportation as it is more flexible and convenient.
  
• Because of that, car rental companies in Florida are now adjusting their services to accommodate the needs of these overseas customers by offering multilingual service, GPS with car rental, cross-border rentals, and other features to gain more market share in the booming industry.
  

U.S. Car Rental Market Share

Enterprise and Avis Budget Group hold a market share of over 40% in the U.S. car rental industry in 2024.

• Enterprise enhances customer service with an extensive reserving and renting center. It has also ensured plenty of market presence at airports, communities, and other travel hotspots for easy access to rentals.
  
• Furthermore, Enterprise increased vehicle offerings by adding SUVs and luxury cars to economy cars, making them available to many more consumers. Their loyalty programs, such as Enterprise Plus, also offer repeat business through upgrades and discounts.
  
• Avis Budget Group uses technology and digitalization heavily. The strong mobile app enables customers to book, change, and manage rentals relatively easily on the go.
  
• Avis also offers flexible terms and membership schemes including Avis Preferred to assure customer retention. In addition, the company is focused on renting out electric vehicles (EVs) due to high growth in demand for sustainable travel.
  

U.S. Car Rental Market Companies

Major players operating in the U.S. car rental industry include:

• Advantage Rent a Car
• Alamo Rent A Car
• Avis Budget
• Enterprise
• Fox Rent as Car
• Getaround
• Hertz
• Midway Car Rental
• Sixt
  

Competition in the U.S. car rental market is cutthroat as multiple participants try to win over more customers using sophisticated technology. The demand for rental vehicles is on the rise due to the permanent need for accessible and affordable transportation from a wide range of customers, including businesspeople, tourists, and residents without permanent access to a vehicle. The increased focus on customer experience through mobile applications, online platforms, and even customer loyalty schemes is a response for enhancing the customer experience.

The leaders in the U.S. car rental market are now focusing on gaining competitive edges through strategies such as M&A, partnerships with travel agencies and other specific business clients, and fleet electrification. For example, the majority of the high-volume car rental companies have expanded their services by adding EVs to their fleets due to the increase in clients’ demand for environmentally friendly vehicles. Besides, the use of AI and customer data analytics gives these players the capability to exploit and optimize Fleet and Service Delivery operations tailored to the customer’s needs.

U.S. Car Rental Industry News

• In January 2024, Vay launched a new offering of their remote-controlled car renting service in Las Vegas, Nevada. With this innovation, users can pay as low as a per minute fee to rent a car, making this option affordable.
  
• In January 2024, SIXT and Stellantis signed a contract, which allowed for the purchase of 250,000 rental vehicles within Europe and North America by 2026. Customers of SIXT rental services will also be able to enjoy a wide range of vehicles from Stellantis, such as Alfa Romeo, Chrysler, Citroen, Dodge, DS Automobiles, Fiat, Jeep, Lancia, Opel, Peugeot, Ram, Vauxhall, and Maserati.
  

The U.S. car rental market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue ($Bn) and Fleet Size from 2021 to 2034, for the following segments:

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Market, By Booking Mode

• Offline
• Online

Market, By Rental Length

• Short term
• Long term

Market, By Vehicle

• Luxury cars
• Executive cars
• Economy cars
• SUVs
• MUVs

Market, By Application

• Leisure/tourism 
• Business

Market, By End Use

• Self-driven 
• Chauffeur-driven

The above information is provided for the following regions and countries:

• Arizona
• California
• Colorado
• Florida
• Georgia
• Illinois
• Indiana
• Maryland
• Massachusetts
• Michigan
• Minnesota
• Missouri
• Nevada
• New Jersey
• New York
• North Carolina
• Ohio
• Oregon
• Pennsylvania
• Tennessee
• Texas
• Utah
• Virginia
• Washington
• Wisconsin