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
Jan 21, 2025 - Car Rental Revenue Drops
- Revenue in the US car rental industry declined in 2024 after three straight years of solid year-over-year gains, according to Auto Rental News’ (ARN) annual Fact Book for 2025. ARN estimates that US auto rental revenue reached $37.9 billion in 2024, down from $38.4 billion in 2023. Flatter revenue growth stemmed from weaker demand, excess fleet numbers, lower rental rates, and higher vehicle depreciation costs. Monthly revenue per unit (RPU) – a measure of a fleet’s revenue generation – fell to $1,387 in 2024 from $1,412 in 2023. Industry insiders suggest that while the industry has moderated from the record sales and profits during the pandemic, the outlook is still solid. Leisure travel has surpassed pre-pandemic levels and is expected to continue growing for the next three years, according to US Travel Association forecasting. However, business travel will not likely return to 2019 levels until 2026.
- US automotive fleet sales – which includes rental, commercial, and government fleets – decreased by 2.5% in 2024 compared to 2023, according to marketing and data firm Bobit. Sales fell as fleet owners recovered their fleet sizes after pandemic-related supply disruptions slowed the production of new vehicles. While overall fleet sales dropped in 2024, rental fleet sales rose 1.7% in 2024 to 1,036,830 vehicles from 1,019,225 in 2023. Rental cars accounted for half of all fleet sales in 2024. However, rental fleet sales in December 2024 were down 16.2% compared to the same month in 2023.
- On his first day in office, President Donald Trump signed an executive order to roll back several Biden-era climate initiatives, which could include repealing the $7,500 consumer tax credit for EV purchases, according to The New York Times. If the tax credits are removed, 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.
- 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.
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