The UK car rental market is poised for substantial expansion, increasing from USD 3,797.4 million in 2025 to USD 6,425.3 million by 2035. The market is expected to grow at a CAGR of 5.4% from 2025 to 2035.
The car rental business welcomes multiple new developments such as technological progress and expanding online customer adoption of mobile applications. High competition exists throughout the entire automobile rental industry because companies enhance their technical innovation investments and continuously expand their internet reach.
Customers make bookings through these services because information technology has invaded the vehicle rental business providing easier and safer processes for automobile reservations.
The UK is experiencing growing tourist vehicle bookings online because Americans are travelling more frequently and using smartphones more often and the user base of 25 to 34-year-olds prefers this method of vehicle rental.
UK Car Rental Industry Assessment
| Metric | Value |
|---|---|
| Industry Size (2025E) | USD 3,797.4 Million |
| Industry Value (2035F) | USD 6,425.3 Million |
| CAGR (2025 to 2035) | 5.4% |
Car rental services continue to expand at a rapid pace in Europe with the UK functioning as a leading market among its peers. Multiple international students continue to enrol in UK educational programs as their educational interest in this region grows each year. Educational facilities in high numbers create opportunities for student use of rental cars which enables market growth.
The market support from regional government initiatives that focus on tourism growth has increased substantially. An ever-expanding range of attractions throughout the area triggers growing interest among travellers whose activities boost UK car rental market development. Such influential factors will generate positive market growth trends across the projection period.
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The below table presents the expected CAGR for the car rental industry over semi-annual periods spanning from 2025 to 2035.
| Particular | Value CAGR |
|---|---|
| H1 2024 | 6.3% (2024 to 2034) |
| H2 2024 | 4.8% (2024 to 2034) |
| H1 2025 | 6.1% (2025 to 2035) |
| H2 2025 | 4.7% (2025 to 2035) |
The CAGR exhibits a fluctuating trend, initially increasing by 63 BPS from H1 (2024 to 2034) to in H2 (2024 to 2034), indicating stronger growth momentum in the latter half. Further, a slight increase of 61 BPS in H1 (2025 to 2035) suggests temporary market stabilization or external growth.
Growth declines in H2 (2025 to 2035) with a 47 BPS decrease, reflecting renewed demand or industry expansion. This pattern suggests cyclical variations, with stronger growth in the second half of each period, possibly driven by evolving market conditions and strategic investments.
Rising On-Airport Car Usage Boosting the Demand
The Europe automobile rental market expands because tourism grows within the region, especially through travellers from business and leisure activities. The tourism growth sector brings increased automobile rental service requirements because driving a rented car remains a favoured mode of travel between business clients and leisure visitors.
Furthermore, because airports are typically located outside of cities, there is a greater need for automobile rental services to facilitate travel. Car rental services are frequently used by business travellers since they provide greater comfort and allow for speedier transportation and such factors are boosting the market for UK car rental market.
Surge in Number of Multi-National Players in the Market
The UK car rental market has large number of multinational companies with vast service offerings and strategized services according to the regional trends with efficient fulfilment ability towards better car rental services over most of the local players present in the area, thereby attracting large consumer base, which in turn will boost the market for car rental in the UK region.
Moreover, the perception of customers towards multi-national businesses has observed a positive growth trend and are opting for such established brands in the international market. The reputation plays an important role in the service industry and thus, the multi-national companies have gained a huge consumer base in the UK car rental market.
Increased Deployment of Electric Vehicles
Key players in the market are adding fleet of electric cars in their rental services as a result of regulations and policies related to sustainable mobility notified by government in various countries. This is mainly owing to the fact that UK governments are taking initiatives to introduce different policies and regulations, to encourage deployment of these vehicles in the company’s fleet.
Demand for car rental in the UK market grew at a 3.3% CAGR between 2020 and 2024. Through the years the transportation industry has established the car rental segment as a major component which brings benefits to customers and rental firms while supporting automobile manufacturers. Automobile manufacturers have developed attractive leasing programs which let small firms grow their vehicle fleets by avoiding big financial expenses.
The entire car rental market continues to expand because of economic expansion together with corporate bookings of luxury cars for business use and growing tourism trends. The increasing willingness of people to invest extra funds for family bonding will serve as the main driver of future market expansion.
The UK car rental service industry is estimated to be valued at USD 3,797.4 million in 2025 and witness a CAGR of 5.4% from 2025 to 2035 reaching a market valuation of USD 6,425.3 million in 2035.
Tier 1: Market Leaders (55-65% Market Share)
The main brands succeed by maintaining big vehicle fleets while establishing a solid reputation among consumers and establishing broad national reach. The largest share of the market belongs to Enterprise Rent-A-Car combined with Hertz and Avis Budget Group because of their worldwide outlets together with their premium service standards and customer loyalty structures.
The companies provide rental services to both business and leisure clients utilizing affordable and upscale vehicle solutions. Strategic technological innovations such as automated contactless rental systems and AI-assisted fleet control help the company maintain operational excellence while building superior customer belief.
Tier 2: Established Competitors (25-35% Market Share)
The top segment houses automobile brands which demonstrate strong regional operations together with fair yet competitive pricing models while offering specialized vehicle choices to customers. Both economy and high-end automobile options are available through the brands Europcar together with Sixt and Alamo which serve different groups of customers.
Both Europcar operates throughout Europe and Sixt gains advantage through its upscale vehicle selection. The budget-friendly services of Alamo allow international travellers and price-conscious clients to use its services. The companies prioritize digital advancement and travel agent collaborations with airport and city zone entry strategies.
Tier 3: Niche and Emerging Players (5-15% Market Share)
The specialized and budget-focused brands are part of this category. Green Motion holds leadership in eco-friendly car rental by letting sustainability-minded clients choose hybrid and electric vehicles.
International budget travellers who need affordable transportation options choose the rental services of Firefly and Thrifty which belong to bigger rental companies. The businesses centre their operations towards low prices as well as serving unique customer requirements across select UK locations while focusing on operational efficiency.
The UK will continue growing in its car rental industry through all segments because of increasing travel patterns combined with enhanced sustainability principles and advancements in AI-directed fleet control systems.
| Year | Population (millions) |
|---|---|
| 2020 | 67.9 |
| 2021 | 68.3 |
| 2022 | 68.6 |
| 2023 | 69 |
| 2024 | 69.3 |
| Year | Per Capita Spending (USD) |
|---|---|
| 2020 | 18.82 |
| 2021 | 20.03 |
| 2022 | 22.68 |
| 2023 | 25.58 |
| 2024 | 29.03 |
Growing Market Demand
The UK car rental market will progressively grow its annual per capita spending at a predicted rate from USD 18.82 in 2020 to USD 29.03 in 2024. Throughout this period the market expanded through more than USD 10 per person annually.
Per capita spending in the UK car rental market keeps increasing because of rising business and tourism sectors together with the adoption of flexible mobility options through changing customer needs.
Post-Pandemic Recovery and Urban Mobility
The car rental market made a slow recovery after its major decline during the COVID-19 pandemic because travel restrictions started being lifted. The growing preference for domestic travel combined with staycations stimulates the market demand for rental vehicles.
Urban residents increasingly prefer quick vehicle rentals to vehicle ownership since London together with other metropolitan areas impose elevated parking costs and congestion surcharges.
Impact of Tourism and Business Travel
The UK recovery from pandemic economic effects brings back increasing numbers of international tourists who prefer rental vehicles for getting around. Business travel has started to return to major cities since organizations developed new methods for post-pandemic work operations.
Car rental services play a vital role in developing tourism infrastructure because they provide tourists with independent driving possibilities along with improved flexibility in travel choices.
Technology Adoption and Consumer Convenience
Mobile-based apps and digital platforms which enable car rental bookings drive changes across the entire sector. More consumers use online booking systems to lease vehicles for both short-term periods and extended durations because these platforms offer quick services at their convenience.
The integration of technology features contactless check-in services as well as vehicle tracking measures which leads to better customer satisfaction and extended service possibilities.
Eco-Friendly and Sustainable Trends
Eco-friendly vehicles have increased in demand within the UK car rental market. People are growing aware of environmental issues which drives them to choose electric or hybrid vehicles from rental fleets.
Eco-contributions made by customers who choose electric vehicles result in higher rental company revenues due to the expanding EV availability which meets market demand.
| Segment (Car Type) | CAGR (2025 to 2035) |
|---|---|
| Economy Car | 4.7% |
UK car rental customers choose economy cars as their preferred choice when hiring vehicles. The low rates provided by economy car rental operations allow average price points accessible to main market clientele. Economy vehicles combine compact dimensions with fuel-efficient standards resulting in vehicles that users find easy to operate and easy to steer. Economy cars work best as urban commuting and limited-distance overland vehicles. The projection period estimates a CAGR of 4.7% growth for the economy car category.
The majority of travellers choose economy rental cars instead of luxurious or premium options but business professionals select such services for work purposes.
The sharing and pooling concept attracts customers preferring affordable rides. More people are becoming aware of health and environmental issues, which encourages them to use eco-friendly options like shared cabs or car rentals. These services help reduce air pollution, improving their demand.
| Segment (End-Use) | CAGR (2025 to 2035) |
|---|---|
| On-Airport | 5.2% |
Based on end use, on-airport type UK car rental is estimated as the leading segment amongst end-use. This might be due to the high number of tourist arrivals in the regions as well as the greater use of the local population for travelling purposes by aeroplane as the highly preferred mode of transport.
Additionally, the on-airport segment is anticipated to rise at a CAGR of ~5.2% during the forecast years.
UK competitors in the car rental market are investing heavily in R&D every day to broaden their product lines. They are expanding their production facilities through mergers and acquisitions to get ahead. For example:
Recent Industry Developments
In November 2024, London-based private hire and taxi company Addison Lee was bought by Singapore’s ComfortDelGro for £269.1m. ComfortDelGro operates in 12 countries and plans to expand Addison Lee’s services beyond London. Addison Lee’s 7,500 drivers and 5,000 vehicles will add to ComfortDelGro’s existing services in the UK.
The UK car rental market has seen significant growth in electric vehicles. 10% of the UK car rental fleet is now plug-in (fully electric or hybrid) versus 5% of the overall UK car fleet. The battery electric share of the car rental fleet has grown 200% since 2022 and now stands at 4%. This is in line with environmental goals and the industry’s commitment to sustainable transport.
The market is expected to grow at ~5.4% CAGR between 2025 and 2035.
The industry stood at USD 3,797.4 million in 2025.
The market is projected to reach USD 6,425.3 million by 2035.
Major players Enterprise Rent-A-Car, Hertz, Avis Budget Group, Europcar, and Sixt among others.
Economy Cars and Others are the key segments driving market growth.
The end-use segment is segregated into On-Airport and Others.
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United Kingdom Car Rental Market
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