United Kingdom Car Rental Market, By Type (Self Driven, Chauffer Driven), By End Use (Local, Airport, Outstation), By Vehicle Type (Economy, Executive, Luxury), By Booking Mode (Online, Offline), By Region, Competition, Forecast & Opportunities, 2020-2030F

Market Overview

United Kingdom Car Rental market was valued at USD 7.15 billion in 2024 and is anticipated to grow USD 13.16 billion by 2030 with a CAGR of 10.75% during the forecast period. The United Kingdom car rental market is experiencing steady growth, driven by rising tourism, increasing demand for flexible mobility solutions, and a growing preference for short-term vehicle access over ownership. The market includes airport rentals, on-demand urban rentals, and long-term leasing services catering to both individuals and businesses. Technological advancements such as mobile booking apps, contactless services, and vehicle tracking systems are enhancing customer convenience and operational efficiency. In mid-2024, the British Vehicle Rental and Leasing Association (BVRLA) reported that the plug-in share of rental fleets (electric + hybrid) surged from approximately 3% in 2022 to 10% in 2024—an impressive 200% increase.

Additionally, the shift toward sustainable transportation is prompting rental companies to expand their fleets with electric and hybrid vehicles. The market is highly competitive, with both international and domestic players offering diverse services.

Key Market Drivers

Growth in Domestic and International Tourism

One of the most significant drivers of the UK car rental market is the steady rise in domestic and international tourism. The United Kingdom, with its rich cultural heritage, historic landmarks, and picturesque countryside, continues to attract millions of visitors each year. Tourists, particularly international travelers landing at major airports like Heathrow, Gatwick, and Manchester, often prefer car rentals to explore regions beyond the reach of public transport. From the Scottish Highlands to coastal areas in Cornwall, car rentals provide the flexibility and convenience that many travelers seek.

Post-pandemic recovery has also led to a surge in domestic tourism, with more UK residents opting for "staycations" rather than traveling abroad. This trend has boosted demand for short-term car rentals, especially in rural and leisure destinations. Car rental agencies located in tourist hotspots and near train stations and airports have benefitted significantly. Moreover, holidaymakers often seek out larger or premium vehicles for comfort, adding to the average revenue per rental transaction. An industry-wide trend in early 2025 shows rental prices in the UK stabilizing at around USD291 per booking, down from USD 347 in March 2023. Interestingly, while overall costs normalized, demand for premium (up 81%) and SUVs (up 51%) surging between March 2024–2025 indicates consumer preference for comfort over economy

Increasing Urbanization and Changing Mobility Preferences

Urbanization and evolving mobility trends are reshaping transportation choices in the UK. With growing congestion, limited parking, and increasing environmental consciousness, many individuals in urban centers are opting out of car ownership. Instead, they are turning to car rental services for short-term or occasional use, such as weekend trips, relocations, or business meetings.

This shift is especially prominent among younger demographics and millennials who prioritize convenience, flexibility, and cost-efficiency over the burdens of vehicle ownership. Car rental companies have responded by introducing innovative models such as hourly rentals, car-sharing services, and subscription-based programs. These offerings provide access to a vehicle when needed without long-term commitments, aligning with modern lifestyles.

Expansion of Digital Platforms and Contactless Services

Digital transformation is a key catalyst in the evolution of the UK car rental industry. Consumers increasingly prefer mobile apps and online platforms to book vehicles quickly and securely. This shift to digital channels has made car rentals more accessible and efficient, eliminating the need for lengthy paperwork and in-person interactions.

The COVID-19 pandemic accelerated the adoption of contactless rental services. Many companies now offer self-service kiosks, digital key access, and virtual vehicle inspections. These innovations enhance user experience while reducing operational costs for rental firms. Real-time vehicle availability, dynamic pricing, and customer reviews on apps and websites help consumers make informed choices, driving trust and satisfaction.

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Key Market Challenges

Rising Operational Costs and Fleet Maintenance

One of the most pressing challenges facing car rental companies in the UK is the increase in operational and fleet maintenance costs. The high cost of vehicle procurement, especially in the wake of global supply chain disruptions and semiconductor shortages, has significantly affected fleet expansion and renewal plans. The price of new vehicles has surged, making it difficult for rental companies to maintain a modern and diverse fleet.

In addition, ongoing maintenance, insurance, taxation, fuel expenses, and regulatory compliance contribute to the overall cost burden. The transition to electric vehicles (EVs), though necessary for meeting environmental standards, entails additional investments in EV infrastructure, such as charging stations and staff training. Smaller and mid-sized rental firms often struggle to keep up with these costs, affecting service quality and competitiveness.

Intense Competition and Price Sensitivity

The UK car rental market is highly competitive, with numerous international giants, national chains, and local players vying for market share. This intense competition often leads to price wars, aggressive discounting, and margin pressures. Online aggregators and third-party booking platforms further amplify this by allowing consumers to compare rental rates instantly, often opting for the lowest-cost provider.

While this benefits customers, it puts enormous pressure on rental companies to differentiate themselves beyond just pricing. Customer loyalty can be fleeting, and brand switching is common, especially when convenience and cost are top priorities. Smaller players face the risk of being overshadowed by global brands that have greater marketing budgets, technological infrastructure, and access to capital.

Key Market Trends

Shift Toward Electric and Sustainable Fleets

One of the most significant trends in the UK car rental market is the accelerated adoption of electric vehicles (EVs) and other low-emission alternatives. With the UK government’s commitment to phase out the sale of new petrol and diesel cars by 2035, rental companies are under increasing pressure to transition to more environmentally friendly fleets. This shift is also driven by consumer demand for sustainable travel options and the expansion of clean air zones (CAZ) in major cities like London and Birmingham.

Leading rental providers are investing heavily in electric and hybrid vehicles and forming partnerships with EV manufacturers to access newer models. Companies are also rolling out supporting infrastructure, such as on-site charging stations and mobile apps that help users locate nearby EV charging points. In addition, initiatives like carbon offset programs and sustainability certifications are being implemented to attract eco-conscious customers. This trend not only aligns with national climate goals but also serves as a competitive differentiator in the market.

Growth of Subscription and Flexible Rental Models

Another emerging trend in the UK car rental industry is the rising popularity of subscription-based and flexible rental models. Consumers—particularly younger generations—are increasingly favoring on-demand access over long-term ownership, and this mindset is fueling demand for vehicle subscription services. These models offer users the flexibility to rent a car for a month or more with the option to swap vehicles, cancel anytime, and access bundled services like insurance, maintenance, and roadside assistance. A 2024 YouGov UK survey found that more than 40% of individuals aged 25–44 prefer accessing vehicles through flexible rental or subscription services rather than owning them. This growing preference, driven by cost predictability and freedom from long-term commitments, is fueling demand and accelerating the shift toward flexible mobility solutions—driving growth in the UK car rental market

Subscription plans cater to a broad range of users, including remote workers, gig economy drivers, and frequent business travelers, who value convenience, flexibility, and fixed monthly costs. These services bridge the gap between short-term rentals and long-term leasing, providing an alternative to traditional car ownership without the burden of depreciation, taxes, or repair expenses.

Integration with Urban Mobility and Shared Transport Ecosystems

As urban centers in the UK continue to embrace smart mobility initiatives, car rentals are increasingly being integrated into wider transportation networks. This trend is particularly visible in cities like London, where car-sharing, ride-hailing, public transport, and micro-mobility (e.g., bikes and scooters) are being unified into single platforms to support seamless, multimodal journeys.

Car rental firms are partnering with city councils, public transit providers, and tech startups to offer interconnected transport solutions. For example, a commuter might use a train for part of their journey and rent a car for the final stretch via a single app. Such collaborations enhance the visibility of car rental services and align them with modern transportation trends. The operator survey revealed that the average rental car in the UK covers more than 11,000 miles annually. This high utilization rate highlights strong demand for rental services, driven by business travel, tourism, and flexible mobility needs further fueling market growth and fleet expansion.

Segmental Insights

Type Insights

The self-driven segment dominated the United Kingdom car rental market due to increasing consumer preference for privacy, flexibility, and independence while traveling. This segment appeals to both leisure and business travelers who value convenience and control over their schedules. Technological advancements, such as user-friendly mobile booking apps, GPS navigation, and contactless keyless access, have made self-drive options more accessible and attractive. Additionally, the rise in domestic tourism and urban mobility needs has further boosted demand for self-driven rentals. The availability of diverse vehicle options, including electric and hybrid cars, also contributes to the growing popularity of this segment across the UK.

End Use Insights

The local segment dominated the United Kingdom car rental market, driven by rising demand for short-distance and intra-city travel. With increasing urbanization, many individuals prefer renting vehicles for local use over owning a car, especially in cities where parking and maintenance can be costly. Local rentals are commonly used for daily errands, commuting, leisure trips, and temporary mobility during vehicle repairs. The growth of digital booking platforms and flexible rental durations has made it easier for customers to access vehicles for local travel. Additionally, the trend toward sustainable transport and availability of eco-friendly vehicles further supports the dominance of this segment.

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Regional Insights

England was the dominating segment in the United Kingdom car rental market, driven by its high population density, extensive transportation infrastructure, and thriving tourism and business sectors. Major cities like London, Manchester, and Birmingham generate significant demand for both leisure and corporate rentals. England's status as a key destination for international tourists and its numerous airports and transit hubs further support rental activity. Additionally, the presence of leading rental companies, availability of a wide vehicle range, and growing interest in domestic travel contribute to the segment's dominance. The region also benefits from strong digital adoption, enabling seamless access to rental services.

Recent Developments

• In July 2024, Northgate Vehicle Hire launched Northgate Cars, offering flexible seven-day-plus rental of passenger vehicles ranging from city cars to SUVs to complement its van rental services. Available nationally across 68 branches, this corporate-focused service addresses fleet gaps during delivery delays or seasonal demand spikes.

• In June 2023, London-based startup Imperium Drive launched Fetch, the UK’s first remote‑driven car rental service. Operating in Milton Keynes, users summon electric vehicles via an app, drive them locally, and remote operators then take over offering cost-effective, door‑to‑door, quasi-autonomous mobility.

• In April 2025, SelfDrive Mobility introduced its Zero‑Deposit rental option in the UK, allowing customers to rent cars daily, weekly, or monthly without upfront security deposits. The fully digital service, available on their app and website, enhances flexibility and affordability for urban and long-term users.

• In June 2024, Exeter-based Scot Group launched Switch, a new vehicle rental brand operating across 90 UK locations alongside Thrifty. Dual-branded vehicles and branches emphasize agility, targeting SMEs and hybrid-working clients with flexible, short- and long-term mobility solutions.

Key Market Players

• Lex Autolease Ltd.
• Alphabet (GB) Ltd
• Enterprise Rent-A-Car UK Ltd.
• LeasePlan UK Ltd.
• Europcar Mobility Group
• Avis Budget Group Inc.
• Hertz UK Ltd.
• SIXT SE
• Dollar Rent A Car, Inc.
• Green Motion International

Report Scope:

In this report, the United Kingdom Car Rental Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• United Kingdom Car Rental Market, By Type:

o   Self Driven

o   Chauffer Driven

• United Kingdom Car Rental Market, By End Use:

o   Local

o   Airport

o   Outstation

• United Kingdom Car Rental Market, By Vehicle Type:

o   Economy

o   Executive

o   Luxury

• United Kingdom Car Rental Market, By Booking Mode:

o   Online

o   Offline

• United Kingdom Car Rental Market, By Region:

o   England

o   Scotland

o   Wales

o   Northern Ireland

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the United Kingdom Car Rental Market.

Available Customizations:

United Kingdom Car Rental Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).