Auto Leasing Market By Lease Type (Open-end, and Close-end), Application (Personal, and Commercial), Vehicle Type (Passenger, LCV, and Others), and Region - Market Perspective, Market Intelligence, Comprehensive Analysis, Historical Data, and Forecast for 2023 - 2032

Market Perspective

The global Auto Leasing Market has witnessed remarkable growth in recent years, with a value of approximately USD 88.35 billion in 2022. It is expected to continue to expand at an impressive CAGR of around 8.2% between 2023 and 2032, reaching a value of around USD 195.74 billion by 2032.

This growth is primarily attributed to the increased availability of low-cost rental or leased vehicles, offering consumers more convenient and affordable options than traditional automobile ownership. In response, there has been a noticeable shift in consumer preferences from purchasing vehicles to leasing or renting.  The trend towards auto leasing has been facilitated by the many benefits offered by leasing companies, such as tax advantages for commercial vehicles, on-demand vehicles, and reduced maintenance costs. Consequently, there has been a surge in demand for both personal and commercial vehicles.

Tourism-based countries have particularly benefited from this trend, with travelers increasingly opting for self-drive tours and trips. Regions such as North America and Asia Pacific are driving the majority of the market's revenues. Meanwhile, the Middle East and Africa have witnessed a boost in demand for rental vehicles due to the rising tourism industry in the region.

Key Insights

• Based on the lease type, the open-end segment held the largest market share
• Based on application, the commercial segment dominated the market
• On the basis of region, North America accounted for the largest market share

Smart Mobility Solutions to Provide Lucrative Opportunities for Market Growth

The smart mobility solutions market is poised for significant growth, as advancements in technology and increasing competition among key players drive the development of better services for consumers. Over recent years, we have witnessed remarkable improvements in technology, such as the widespread installation of GPS tracking in leased fleets or vehicles, as well as updated accidental insurance norms that provide vital support for companies. These cutting-edge facilities have been instrumental in attracting new investments and fostering mergers among existing players, resulting in improved opportunities for market growth.

As the market continues to mature, we can expect to see further innovation and investment in smart mobility solutions, including the integration of artificial intelligence and machine learning technologies. These advancements will enable companies to optimize their services and enhance customer experiences, driving continued market growth.

Stringent Government Regulations on Carbon Emissions May Restrain Market Movement to Some Extent

The growing concern over the impact of carbon emissions on the environment has led to the implementation of stringent regulations on vehicle carbon emissions in many countries. As a result, vehicles that emit higher levels of carbon emissions are being phased out, and companies are now compelled to maintain fleets that emit significantly lower levels of emissions compared to previous models. This has necessitated substantial investments in more efficient and environmentally-friendly vehicle fleets.

In response to these regulations, many companies are adopting innovative technologies and exploring alternative fuels to reduce their carbon footprint and comply with environmental regulations. This shift towards cleaner and more efficient vehicle fleets not only helps companies to comply with regulations but also enables them to reduce operating costs and improve their brand image as environmentally responsible organizations.

Fuel Price Volatility May Remain a Key Challenge

Constantly changing prices of fuels is one of the factors challenging the growth of the market. The rental charges implied by key players in the auto leasing market vary on the changing costs of fuels. The rise in the price of fuels impacts negatively as the prices are revised, it affects the consumer's demand directly. Rise or fall in prices depends upon various factors such as changing import or export policies, uncertain geopolitical issues, and other related factors.

Recent Developments

In February 2023: In February 2023, Mitsubishi HC Capital and ALD signed an agreement to launch a joint venture for fleet management and multi-brand mobility solutions catering to the corporate sector. This collaboration aims to leverage the strengths of both companies to provide innovative and customized mobility solutions to businesses globally.

In September 2022: Another noteworthy development in the industry is the acquisition of U-Save Car & Truck Rental by Green Motion This strategic acquisition has enabled Green Motion to expand its business line and reach, providing broader services to customers. With this acquisition, Green Motion has become one of the largest car rental companies, operating in 60 countries, and offering sustainable and affordable car rental solutions.

Segmental Analysis

Based on lease type, the market is categorized into open-end and close-end leasing. In 2022, open-end leasing dominated the segmental share due to its popularity among small and medium-scale businesses and manufacturing units. Open-end leases are widely preferred for commercial purposes due to the benefits they offer to end-user companies. These leases generally have shorter durations compared to close-end leases, making them ideal for commercial purposes where vehicles are required for specific or shorter periods.

Based on application, the market can be categorized into personal and commercial sub-segments. In 2022, the commercial sub-segment dominated the segmental revenues owing to the growing demand for commercial vehicles. Large organizations prefer leasing commercial fleets for commuting purposes as the size of their fleet is considerably larger than those for personal use. Furthermore, significant developments in the e-commerce sector have accelerated the demand for leasing commercial vehicles for delivery and other purposes. The personal use segment has also observed significant growth in recent years and is anticipated to continue its momentum owing to increasing demand from the tourism sector. Consumers have been observed shifting towards renting vehicles for touring purposes, driving growth in this sub-segment.

North America Dominates Market Due to Strong Adoption of Smart Mobility

The auto leasing market in North America dominates the regional share, accounting for over 30% of the revenues from the region. The United States was the most prominent country in the region, contributing the majority of the revenues. Canada observed potential growth, particularly in commercial automobiles, owing to the development of the industrial sector in the country. In recent years, North America has progressed at a CAGR of 6.75%. One of the factors resulting in the increase in demand for rental or auto leasing is the increasing purchase and maintenance costs of cars, LMVs, and LCVs. Consumers are shifting towards utilizing their disposable incomes in the most efficient ways, which in turn will further drive the market through the forecast period.

In recent years, consumers in North America have preferred opting for leasing automobiles instead of purchasing, considering their use of the car. Smart mobility solutions, such as ease of leasing an auto, convenience of payment methods, and low maintenance costs, are a few of the factors that will augment the market through the forecast period.

Asia Pacific to Remain the Fastest Growing Region Owing to Rising Demand, Population, and Tourism

The Asia Pacific region is estimated to observe the fastest CAGR through the forecast period owing to changing trends of smart mobility solutions along with the growing working population. The Asia Pacific has the highest population as compared to any other region. Inflating prices for various types of automobiles and high demand for commutes are a few factors that are resulting in a surge in demand for rental or autos on lease. The presence of established competition in the region has resulted in key players offering more and more services to attract consumers. Rapid urbanization, industrial development, and the attraction of new business hubs in the region have accelerated the demand.

Leasing an auto has proven better convenient for consumers instead of purchasing a new car. The commercial or corporate utility has also increased significantly owing to the benefits offered by the key players in the market. New small and medium-sized businesses or manufacturers consider leasing a fleet of vehicles for commercial purposes instead of purchasing new fleets. Most of the consumer base for auto leasing is observed to be the people who often travel for work from city to city or region to region. People traveling for leisure often consider renting a self-drive car. China, India, and Japan are the most prominent countries in the region, attributing to the growth of the market.

Competitive Landscape

• ALD SA
• Arval Service Lease
• EASIRENT
• EUROPCAR
• LeasePlan
• Green Motion International
• ORIX
• SIXT
• The Hertz Corporation
• Zoomcar

The global auto leasing market is segmented as follows:

By Lease Type

• Open-end
• Close-end

By Application

• Personal
• Commercial

By Vehicle Type

• Passenger
• LCV
• Others

By Region

• North America
  • The U.S.
  • Canada
  • Mexico
• Europe
  • France
  • The UK
  • Spain
  • Germany
  • Italy
  • Nordic countries
    • Denmark
    • Finland
    • Iceland
    • Sweden
    • Norway
  • Benelux Reunion
    • Belgium
    • The Netherlands
    • Luxembourg
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • New Zealand
  • Australia
  • South Korea
  • Southeast Asia
    • Indonesia
    • Thailand
    • Malaysia
    • Singapore
    • Rest of Southeast Asia
  • Rest of Asia Pacific
• The Middle East & Africa
  • Saudi Arabia
  • UAE
  • Egypt
  • Kuwait
  • South Africa
  • Rest of the Middle East & Africa
• Latin America
  • Brazil
  • Argentina
  • Rest of Latin America