Auto Rental & Leasing
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 2,400 auto rental and leasing companies in the US provide vehicles for short-term or long-term use. Rentals and leases typically involve passenger cars or trucks. Companies may also provide the use of vans, sport utility vehicles, luxury cars, limousines, or hearses. Some companies lease used vehicles. While large rental companies own thousands of individual locations worldwide, they also license brand names to independent operators.
Dependence on the Travel Industry
Air travel is a key driver for car rental volume.
Resale Risk
Companies bear the risk of decreases in residual value for vehicles reaching the end of their rental or lease life.
Industry size & Structure
A typical auto rental company employs 50 workers and generates around $17-18 million annually, while a typical auto leasing company operates a single location and generates about $34 million annually.
- The auto rental and leasing industry consists of 2,400 companies that employ 129,500 workers and generate $55.1 billion annually.
- The auto rental and leasing industry is concentrated at the top, and fragmented at the bottom; the top eight firms account for 86% of total revenue. Most small companies operate out of a single location.
- While large rental companies own thousands of individual locations worldwide, they also license brand names to independent operators.
- Large auto rental companies include Enterprise Holdings (Alamo, Enterprise, National), Hertz, and Avis. Major companies that provide auto leasing services include Element Fleet Management, and Holman (formerly ARI Global Fleet Management).
Industry Forecast
Auto Rental & Leasing Industry Growth
Recent Developments
Nov 21, 2024 - Trump Plans to Revoke EV Tax Credit
- President-elect Donald Trump aims to dismantle a $7,500 consumer tax credit for EV purchases, according to Reuters. If the move is successful, it would also make leasing an EV more expensive, according to Bloomberg. The tax credits are offered through the Inflation Reduction Act (IRA), which requires qualified vehicles to be assembled in the US, and have a defined percentage of battery parts and other components originating in the US. However, fleet owners – including car makers’ finance arms – are exempt from the IRA rule. Automakers can claim the $7,500 credit then pass the savings on to lease customers. The tax credit has made EV leases competitive with gasoline-powered vehicles. In October, 79% of EV sales in dealerships were leases, according to Edmunds.com.
- Middle-class Asians are increasingly influential travel consumers, according to a recent survey by Expedia and Atomik Research. The survey - which questioned 4,000 mass-affluent travelers in China, India, Indonesia, Singapore, and Vietnam – showed that 81% of respondents prioritize travel despite economic challenges. On average, those surveyed said they set aside 23% of their income for travel over the next year. Nearly a third of respondents said they would choose travel over dining out, and 39% said they would prioritize travel over purchasing electronics or a new car. Those surveyed listed Australia, Canada, France, Germany, South Korea, and the US as their top destinations.
- US automotive fleet sales – which includes rental, commercial, and government fleets – decreased by 1.3% in the first 10 months of 2024 compared to the same period in 2023, according to marketing and data firm Bobit. However, rental fleet sales for January through October were up 4.2% compared to the same period in 2023. In October, rental fleets purchased 72,407 vehicles, up 52.5% compared to the same month in 2023. Industry observers suggest auto manufacturers may be leaning on fleet sales to offset weaker demand for retail auto sales.
- The average length of rental (LOR) for a collision-related car rental in the third quarter of 2024 was 16.3 days, down 1.2 days compared to the same period in 2023, according to a report released in August by Enterprise Rent-A-Car. LOR is the period a consumer rents a vehicle while their personal vehicle is in the shop after an accident. The Q2 2024 drop in LOR is due to a reduced backlog of vehicles awaiting repair. Industry observers suggest LOR and backlogs dropped as collision repair parts supply chains have recovered from pandemic-related disruptions and a 2023 UAW strike. Repair shops have also made gains in hiring more workers, which has also helped reduce backlogs.
Get A Demo
Vertical IQ’s Industry Intelligence Platform
See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.
Build valuable, lasting relationships by having smarter conversations -
check out Vertical IQ today.