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 2,300 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

The average auto rental and leasing company employs 55 workers and generates $20 million in annual revenue.

    • A typical auto rental company employs 227 workers and generates around $17-18 million annually.
    • A typical auto leasing company operates a single location and generates about $34 million annually.
    • The auto rental and leasing industry consists of 2,300 companies that employ 191,300 workers and generate $47 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.
    • Auto rentals account for about 72% of industry revenue, while auto leasing accounts for 28%.
    • Large auto rental companies include Enterprise Holdings (Alamo, Enterprise, National), Hertz, and Avis. Major companies that provide auto leasing services include Element (formerly GE Capital Fleet Services and PHH Arval), and ARI Global Fleet Management.
                                    Industry Forecast
                                    Auto Rental & Leasing Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Oct 30, 2022 - Rising Rental Fees Dim Customer Satisfaction
                                    • A 14% rise in rental car fees this year is suppressing overall customer satisfaction and driving a decline in rental car company brand image, a newly-released JD Power study found. Power’s 2022 North American Rental Car Satisfaction Study – which measures customer satisfaction with the entire airport rental car experience, from reservation to vehicle return – found rental car price is the biggest factor impacting customer satisfaction, which has not improved in 2022 despite the North American airport-based rental car companies having largely solved the vehicle supply shortage that significantly drove down customer satisfaction in 2021. In this year’s survey, Enterprise ranked highest in overall customer satisfaction for a second consecutive year, followed by National, and Alamo. Thrifty ranked lowest. Overall customer satisfaction for the industry is down from 2021 and 2020.
                                    • Rental car customers are all too familiar with expensive rental insurance and prepaid fuel fees. However, renters are being caught off guard by new extra charges from Hertz, Avis, and other car rental companies, The Wall Street Journal reported in October 2022. “Sneaky” fuel service fees are popping up on rental car receipts (despite cars being returned with full tanks) customers told WSJ, and Hertz has levied hefty cancellation fees for prepaid reservations canceled more than 24 hours before pickup ($100), and $200 if the cancellation is within 24 hours, WSJ reported. No-show travelers who prepay can lose all their money. Daily “convenience fees” for paying tolls electronically – in addition to toll charges – are being tacked on to bills as well.
                                    • Global business travel, a key demand driver for auto rental, is expected to face a slow recovery to the 2019 spending level of $1.4 trillion. While pandemic-related conditions have improved, macroeconomic conditions have worsened. The Global Business Travel Association (GBTA) recently revised its forecast for business travel’s full return to 2026 from 2024, according to the 2022 GBTA Business Travel Index (BTI) Outlook. The GBTA BTI is an annual study covering growth in 73 countries and 44 industries. The primary obstacles to business travel’s full return to pre-pandemic levels include inflation, high energy prices, continued supply chain disruptions, and labor shortages.
                                    • Automotive fleet sales were mixed in August, according to Cox Automotive. Overall, fleet sales rose 14.6% in August on a year-over-year basis. Growth was led by a 36.9% rise in commercial fleet sales; government fleet sales increased by 28%. Rental car fleet sales declined 18.1% in August compared to the same month in 2021.
                                    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.

                                    Request A Demo