US Car Rental Market Analysis by Mordor Intelligence
The US Car Rental market is valued at USD 38.90 billion in 2025 and is projected to reach USD 49.13 billion by 2030, expanding at a 4.78% CAGR. The trajectory underscores the sector’s resilience as domestic road-trip culture, hybrid-work patterns, and a swing back toward in-person meetings restore steady rental demand. Growth is reinforced by the 72.23% penetration of online booking channels, the South region’s outsized traveler volumes, and accelerated fleet electrification programs that draw leisure and corporate customers. At the same time, persistent vehicle supply constraints and rising capital costs temper near-term expansion, prompting operators to optimize fleet mix and pursue data-driven pricing. Heightened competition from peer-to-peer marketplaces and ride-hailing services is nudging incumbents to invest in contactless experiences, predictive analytics, and diversified service models.
Key Report Takeaways
- By application, leisure travel led with 58.32% revenue share in 2024 and is set to grow at a 5.32% CAGR through 2030.
- By vehicle type, economy cars contributed 59.87% of revenue in 2024, whereas SUVs and crossovers are projected to rise at a 12.48% CAGR.
- By booking channel, online platforms commanded 72.23% revenue share in 2024; the same channel is growing at an 8.77% CAGR to 2030.
- By rental duration, short-term contracts accounted for 68.55% of revenue in 2024; long-term and subscription formats are expanding at a 10.64% CAGR.
- By propulsion, ICE vehicles held 80.23% of 2024 revenue, while battery-electric vehicles are advancing at a 24.55% CAGR.
- By service model, traditional operators controlled 89.35% of 2024 revenue; peer-to-peer platforms are anticipated to accelerate at a 17.63% CAGR through 2030.
- By region, the South held 31.52% of the US car rental market share in 2024, while the West is forecast to post the fastest 7.32% CAGR through 2030.
US Car Rental Market Trends and Insights
Drivers Impact Analysis
Driver | (~) % Impact on CAGR Forecast | Geographic Relevance | Impact Timeline |
---|---|---|---|
Domestic Road-Trip Demand | +1.2% | South & West, spillover to Northeast | Medium term (2-4 years) |
Online/Mobile Bookings | +0.8% | Urban markets nationwide | Short term (≤2 years) |
Hybrid-Work Fleet Leasing | +0.9% | Northeast & West metros | Medium term (2-4 years) |
Fleet Electrification Push | +0.6% | West Coast & Northeast | Long term (≥4 years) |
Peer-to-Peer Expansion | +0.4% | Urban markets nationwide | Medium term (2-4 years) |
Telematics OPEX Savings | +0.3% | Early adopters in premium fleets | Long term (≥4 years) |
Source: Mordor Intelligence
Surge in Domestic Road-Trip Leisure Demand
Pent-up wanderlust and cost-sensitive travelers have made cars the preferred mode for leisure trips, lifting the leisure segment. In response, operators are broadening their inventories to include more SUVs and crossovers, which command higher daily rental rates and cater better to family travel needs. The South and West remain hotspots, with national parks and scenic coastal routes driving consistent demand. Enhanced fuel efficiency in these larger vehicles, coupled with enticing loyalty program benefits, is making rentals more appealing than ownership for leisure trips.
Rapid Growth of Online & Mobile Booking Channels
Digital convenience now underpins all reservations, confirming a lasting pivot toward app-based experiences. Fast-acting firms introduced contactless pick-up, AI chatbots, and one-tap payment flows, driving repeat usage and higher ancillary-service attachment rates. Hertz’s rollout of Apple Pay across US locations shows how streamlined payment options reduce counter time and boost customer satisfaction. Mobile-first interfaces also enable dynamic pricing that reacts to localized events, bolstering yield management. The data captured from user journeys feeds predictive models that reposition fleet units in near real time, lifting utilization ratios and moderating capital intensity.
OEM-Backed Electrification of Rental Fleets
Automakers and rental brands are aligning to accelerate EV adoption despite headline setbacks, such as Hertz’s depreciation charge on its Tesla fleet. SIXT’s multiyear agreement with Stellantis to source up to 250,000 vehicles—many of them electric—signals the scale of transformation. Airport landlords from Los Angeles to Dallas approve Level-3 fast-charging installations, alleviating range-anxiety barriers for renters. Enterprise Mobility runs grid-impact studies with utility partners to ensure sufficient power supply at high-traffic hubs.
Flexible Fleet-Leasing Demand from Hybrid-Work Corporations
Hybrid work reshapes travel budgets, creating demand for elastic vehicle access instead of fixed-allocation contracts. Enterprise Mobility’s fleet-management services expanded 8% in 2024 to 900,000 units, a testament to corporations outsourcing mobility to control costs and emissions. Subscription-based agreements allow month-to-month adjustments that match employee travel patterns, mitigating idle-fleet risk for clients. Telematics dashboards provide employers with usage analytics, giving finance teams clearer expense visibility and compliance control.
Restraints Impact Analysis
Restraint | (~) % Impact on CAGR Forecast | Geographic Relevance | Impact Timeline |
---|---|---|---|
Vehicle supply & CAPEX squeeze | -1.4% | Nationwide, acute in Midwest | Short term (≤2 years) |
EV residual-value risk | -0.8% | Ports of entry on West Coast | Medium term (2-4 years) |
Airport fees & taxes | -0.5% | Major airport hubs | Medium term (2-4 years) |
Ride-hail/MaaS substitution | -0.7% | Urban markets nationwide | Long term (≥4 years) |
Source: Mordor Intelligence
Persistent New-Vehicle Supply Constraints & High CAPEX
Financing rates for fleet purchases surged during 2024 as monetary tightening raised borrowing costs, squeezing cash flows for operators. Chip shortages and OEM allocations that favor retail buyers have limited fleet deliveries, forcing rental firms to extend holding periods or compete for late-model used cars at premium prices. Elevated acquisition costs compress margins and complicate pricing strategies, especially when customers remain price sensitive. The scarcity of economy trims—OEMs have prioritized higher-margin variants—nudges renters toward bigger vehicles, driving higher daily rates and reducing depreciation. Fleet managers now dedicate more resources to remarketing execution, acknowledging that resale timing can determine profitability in a volatile wholesale market.
Residual-Value Risk from Low-Priced Chinese EV Imports
Hertz’s USD 245 million Tesla write-down illustrated how rapid price drops erode residual values and undermine electrification economics.[1]Lora Kolodny, “Hertz Sells Off Part of Its Tesla Fleet After Depreciation Surge,” CNBC, cnbc.com Should competitively priced Chinese EVs make a significant entry into the US market, current fleets could face accelerated depreciation, straining balance sheets. This price volatility might lead operators to reconsider near-term EV purchases, balancing potential losses against their sustainability goals. In response, banks and leasing companies are tightening advance rates on EV collateral, raising equity requirements, and pushing back break-even timelines. If charging networks and secondary-market liquidity don't evolve alongside, rental companies might postpone extensive EV rollouts, potentially stunting long-term growth forecasts for the sector.
Segment Analysis
By Application: Leisure Demand Anchors Growth
Leisure rentals captured 58.32% of 2024 revenue, generating the largest US car rental market income slice and posting a 5.32% CAGR outlook through 2030. Road trip culture, national park tourism, and flexible vacation timing under hybrid work policies lengthen rental durations and boost average daily rate (ADR) performance.
Leisure travel is adding momentum as professionals extend work trips for personal recreation, lengthening contracts and enhancing profitability. For incumbents, packaging loyalty benefits such as free class upgrades encourages customers to stay within the brand ecosystem while reinforcing occupancy during shoulder periods. The resulting utilization gains support capital-return targets even as acquisition outlays rise.
By Vehicle Type: SUVs and Crossovers Gain Traction
Economy models still dominate fleet counts with a 59.87% share. Yet the SUV and crossover category, noted for 12.48% CAGR, is redefining revenue mix as customers prioritize space and perceived safety. Operators capitalize on higher ADRs for larger vehicles, offsetting inflationary costs in fleet procurement.
OEM production shifts toward premium trims constrain economy-car supply, forcing rental companies to balance customer budgets against availability. Telematics now guides micro-fleet allocation, positioning SUVs where family vacation demand peaks. The strategy maximizes utilization and lowers repositioning miles, contributing to reduced operating expenses even as statutory insurance premiums climb.
By Booking Channel: Digital First Becomes Default
Online platforms generated 72.23% of sales in 2024, demonstrating the overwhelming customer preference for mobile convenience. This channel contributed nearly USD 28.0 billion to the US car rental market size and is tracking an 8.77% CAGR as AI chatbots, predictive pricing engines, and contactless check-in services mature.
Offline channels, including counters and phone reservations, remain relevant to complex group bookings and insurance-replacement segments, yet their share shrinks annually. To preserve margins, operators push add-on services - such as GPS, child seats, and liability waivers - through app upsell screens where acceptance rates can double compared with desk pitches. Marketplaces like Turo amplify digital influence by offering fully app-mediated rentals and specialty vehicles beyond traditional fleets.
By Rental Duration: Subscriptions Extend Lifecycle Value
Short-term contracts (Less than or equal to 30 days) delivered 68.55% of turnover in 2024, driven by vacationers and business travelers who need rapid access and predictable costs. Long-term and subscription packages, however, record a 10.64% CAGR, signaling a structural shift to access-over-ownership models within the US car rental market.
Subscription buyers appreciate bundled insurance, maintenance, and the option to swap vehicles with minimal notice. For operators, subscriptions offer recurring revenue, lower churn, and better forecasting of fleet utilization. Enterprise Mobility leveraged this trend through Flex-E-Rent, boosting retention among corporate accounts that prefer month-to-month flexibility over multi-year leases.
By Propulsion: EV Adoption Picks Up Despite Volatility
Conventional ICE vehicles maintained an 80.23% share in 2024, but battery-electric units logged the market’s fastest 24.55% CAGR, indicating a gradual greening of the US car rental industry. Operators use EV rentals to introduce mainstream travelers to electric mobility, which strengthens OEM relationships and accesses bulk-purchase discounts.
Charging infrastructure remains the bottleneck, yet new partnerships with utilities and charge-point operators are reducing station downtime near major airports. Federal and state incentives covering vehicle purchase and charging hardware offset initial costs, smoothing the path to profitability. Firms that master residual-value risk through data-driven asset management stand to gain early-mover brand equity.

Note: Segment shares of all individual segments available upon report purchase
By Service Model: Peer-to-Peer Platforms Challenge Incumbents
Traditional corporate fleets continued to hold 89.35% of 2024 receipts, but peer-to-peer operators are scaling at a 17.63% CAGR. Marketplace hosts supply 360,000 vehicles nationwide, expanding choice beyond what capital-intensive incumbents can finance. Many hosts list specialty cars—vintage, performance, or luxury trims-that attract premium rates and younger demographics.
The Uber–Turo partnership scheduled for 2025 will inject shared-fleet inventory into a mass-market ride-hailing app, potentially accelerating customer adoption. Incumbents counter by integrating tele-operations and on-demand delivery, offering hotel guests or urban residents a vehicle at their doorstep without a physical branch. Whichever model better synchronizes supply with hyper-local demand will capture incremental wallet share.
Geography Analysis
The South accounted for 31.52% of 2024 revenue, making it the largest regional US car rental market contributor. Robust in-migration, year-round tourism, and major convention hubs in Florida and Texas sustain high fleet turnover. New consolidated rental car centers at Orlando International and Dallas/Fort Worth airports streamline operations, cutting shuttle times and elevating customer satisfaction. Leisure visitors gravitate toward coastal routes and theme parks, while corporate relocations amplify weekday demand, balancing utilization curves across the calendar.
The West is the fastest-growing territory with a projected 7.32% CAGR through 2030. Technology corridors in California and Washington, combined with an influx of international tourists, drive double-digit gains in airport rentals. Stringent emission norms and a strong EV culture tilt fleet composition toward electrified models, supported by aggressive state-funded charging infrastructure rollouts. High urban parking costs in San Francisco and Los Angeles make on-demand rentals a practical alternative to ownership, boosting traditional and peer-to-peer contracts. Airports like LAX are finalizing multibillion-dollar automated people-mover links that funnel customers directly to consolidated rental centers, raising throughput and lowering per-customer operating costs.[2]“LAX Automated People Mover Reaches 75% Completion,” Los Angeles World Airports, lawa.org
The Northeast and Midwest provide steady, diversified revenue streams despite more modest growth. Dense metropolitan clusters like New York, Boston, and Chicago generate consistent corporate traffic, while extensive highway networks enable regional leisure drives to coastal or rural retreats. Seasonal fluctuations-winter storms that depress bookings-are mitigated by insurance-replacement demand resulting from weather-related accidents. Airports such as Gerald R. Ford International opened new rental facilities in 2024, demonstrating ongoing investment in traveler convenience.[3]Gerald R. Ford International Airport Authority, “Airport Opens New Rental Car Facility,” grr.orgMidwestern manufacturing hubs also sustain corporate rentals linked to supplier visits and supply-chain site audits, anchoring weekday utilization rates.
Competitive Landscape
The US car rental market is highly concentrated, creating significant economies of scale in fleet purchasing and back-office technology. Enterprise Holdings leverages a multi-brand portfolio-Enterprise, National, and Alamo—to serve leisure and corporate segments with differentiated value propositions. Avis Budget Group maintains brand recognition among price-sensitive consumers, while Hertz emphasizes premium segments and technology-forward initiatives such as AI-powered damage detection, rolled out nationwide in 2025.
Scale advantages translate into favorable OEM procurement terms, priority access to new-model allocations, and lower per-unit financing costs. Leading firms also secure long-term airport concessions, locking in high-traffic locations that smaller entrants struggle to access. Despite size, incumbents face strategic risk from asset-light disruptors that sidestep fleet ownership.
Technology deployment is emerging as the main competitive lever. Incumbents invest in predictive analytics to allocate vehicles to micro-markets, telematics to monitor driving behavior, and subscription platforms that smooth revenue volatility. Partnerships with charging-infrastructure specialists seek to fast-track EV readiness, mitigating range-anxiety barriers and reinforcing sustainability credentials. In parallel, tele-operation pilots aim to reposition vehicles autonomously, potentially slashing labor costs and improving urban availability.
US Car Rental Industry Leaders
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Enterprise Holdings Inc.
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Hertz Global Holdings Inc.
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Avis Budget Group Inc.
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Sixt SE
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Fox Rent A Car
- *Disclaimer: Major Players sorted in no particular order

Recent Industry Developments
- April 2025: Hertz partnered with UVeye to install AI vehicle-inspection kiosks nationwide, shortening return times and improving loss-damage detection.
- January 2025: XCharge agreed with a major rental group to build Level-3 chargers at multiple US airports.
- June 2024: Europcar opened its first US branches at Atlanta and Dallas airports, offering premium EV-heavy fleets. This strategic expansion marks a significant milestone for Europcar in officially expanding its presence into key travel hubs within the United States.
US Car Rental Market Report Scope
The United States vehicle rental market is segmented by application type (Leisure/Tourism, and Business), by vehicle (Luxury/Premium Cars, and Economy/Budget Cars), and by booking (Online Access, and Offline Access)
By Application | Leisure and Tourism |
Business and Corporate | |
By Vehicle Type | Economy and Budget Cars |
Luxury and Premium Cars | |
SUVs and Crossovers | |
By Booking Channel | Online (Web & App) |
Offline (Counter & Phone) | |
By Rental Duration | Short-Term (less than 30 days) |
Long-Term and Subscription (more than 30 days) | |
By Propulsion | ICE Vehicles |
Hybrid-Electric Vehicles | |
Battery-Electric Vehicles | |
By Service Model | Traditional Corporate Fleets |
Peer-to-Peer Platforms | |
By Geography | Northeast |
Midwest | |
South | |
West |
Leisure and Tourism |
Business and Corporate |
Economy and Budget Cars |
Luxury and Premium Cars |
SUVs and Crossovers |
Online (Web & App) |
Offline (Counter & Phone) |
Short-Term (less than 30 days) |
Long-Term and Subscription (more than 30 days) |
ICE Vehicles |
Hybrid-Electric Vehicles |
Battery-Electric Vehicles |
Traditional Corporate Fleets |
Peer-to-Peer Platforms |
Northeast |
Midwest |
South |
West |
Key Questions Answered in the Report
What is the current US car rental market size and its growth outlook?
The US car rental market size stands at USD 38.90 billion in 2025 and is forecast to reach USD 49.13 billion by 2030 at a 4.78% CAGR.
Which region leads the US car rental market?
The South region leads with 31.52% revenue share, supported by consistent tourism flows and rising corporate relocations.
How fast are electric vehicles growing within US rental fleets?
Battery-electric rentals are expanding at a 24.55% CAGR thanks to OEM partnerships and expanding airport charging infrastructure.
Why are long-term and subscription rentals gaining popularity?
Hybrid work schedules and a preference for flexible access over ownership are pushing long-term and subscription formats to grow at a 10.6% CAGR, offering predictable costs for customers and recurring revenue for operators.
What share do online channels hold in car rental bookings?
Online platforms account for 72.23% of bookings and are projected to grow at an 8.77% CAGR through 2030.