Andres Munoz - Hola Car Rentals Editorial Team
While car rental rates have risen in recent years, driven in part by stronger leisure demand and fleet upgrades, some industry and public data indicate the near-term pricing outlook may be more stable for travellers.
The State of Play
The global car rental market is expected to reach $108 billion by 2029, with the U.S. leading the way and growing at a steady 7.5% annual rate. This expansion is driven largely by leisure travelers, who make up over half of all rentals worldwide.
Even with modest price adjustments forecasted in the U.S. (around 1.5%–1.9% in 2025), the market here remains far more stable than in other countries such as the U.K. or Australia, where increases could reach up to 7%. Encouragingly, recent data from the Bureau of Labor Statistics also shows that U.S. rental prices have actually dipped 4.8% year-over-year, a sign that competition and better supply are keeping costs balanced.
Compared to the dramatic price spikes seen during the pandemic, today’s rates are leveling off as supply chains recover and vehicle production stabilizes.
What’s Behind the Numbers?
Several factors have shaped the market’s evolution, many of which actually benefit renters in the long term:
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Higher-quality fleets: Companies have invested in newer, fuel-efficient, and tech-equipped vehicles that improve comfort and safety.
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Sustainable operations: Many providers are expanding eco-friendly options, from hybrid cars to electric models.
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Strong demand from adventure travelers: Over 70% of Millennials and Gen Xers rented a car last year, highlighting that road trips remain one of the top lifestyle travel trends, according to Grand View Research.
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Healthy competition: With more players entering the market, customers can choose from a wider range of models and price tiers.
Investigating the Broader Transport Sector
Car rental price trends become even more interesting when compared with data drawn from the rest of the transport market.
The Bureau of Transportation Statistics (BTS) provides an overview of cost changes seen in the past 12 months. Consumers could expect to pay 1.4% more for all transport-adjacent products and services in 2024 than in the previous year. This puts expenses at a record high, following a sharp increase in 2021-22.
Interestingly, there’s a divergence between private and public transport costs. While the former rose 1.5% YoY, the latter declined 1.8% in 2024. Again, this comes after steep post-pandemic increases in previous years.
In this context, the modest price increases for car rentals in the US align closely with the sector as a whole, even as the industry’s growth outstrips its counterparts.
The Cost Conundrum
Another thing that’s pushing people towards car rentals in greater numbers also becomes apparent in BTS data. Specifically, owning a personal vehicle is becoming significantly more expensive.
In 2024, car insurance costs increased by 17.8% YoY. Meanwhile, average costs for vehicle maintenance and repair grew by 6.1%.
People who only need a car occasionally therefore have less motivation to buy one, because the ongoing, unavoidable ownership costs make it far less viable. In this context, car rentals are clearly more appealing. This might even explain some of the rapid growth this market has seen, along with the factors behind the numbers we discussed earlier.
Smart Travel Choices & The Future of Car Rental
For travelers mindful of budget, a number of affordable rental options are available. Compact and economy cars, for example, make up over 30% of total rentals according to Grand View Research, offering impressive fuel efficiency and low daily rates. Regardless of car type, online booking discounts are also available to bargain hunters.
Some might assume that driving is falling out of favor with the wider population. However, Department of Transportation data shows that over 90% of people have a license across all demographics. This provides the flexibility to make smart, cost-efficient travel choices depending on their needs.
Growth of the car rental market at both a national and global level looks set to continue at least until 2030. Whether average prices will creep up more slowly over this period remains uncertain. The interplay of consumer demand and outside market forces, such as tariffs on vehicles and fuel costs, will determine this aspect of the industry.
Sources:
1) Global market size / structure / leisure share / US share
- Business Wire: “World Car Rental Market Report 2025…”
https://www.businesswire.com/news/home/20250722580861/en/World-Car-Rental-Market-Report-2025-US-Forecast-to-Maintain-the-Lead-Brazil-to-Emerge-Among-Top-3-Markets---ResearchAndMarkets.com
(Used for: global market value forecast to USD 108B by 2029; US share forecast; leisure share of market value)
2) U.S. car rental market CAGR + consumer survey / segment shares
- Grand View Research: “U.S. Car Rental Market Size & Share | Industry Report, 2030”
https://www.grandviewresearch.com/industry-analysis/us-car-rental-market-report
(Used for: U.S. market CAGR (2025–2030); economy segment share; survey figures for Gen X / Millennials renting)
3) Forecasted rental price changes by market (US vs UK; reference to Australia volatility)
- Amex GBT (official press release): “2025-26 Ground Monitor forecasts modest car rental price increases”
https://www.amexglobalbusinesstravel.com/press-releases/american-express-global-business-travels-2025-26-ground-monitor-forecasts-modest-car-rental-price-increases/
(Used for: US +1.5% to +1.9% forecast range; UK +5% to +7% forecast range)
- Amex GBT Ground Monitor 2025–26 (full report PDF)
https://explorer.amexglobalbusinesstravel.com/rs/346-POJ-129/images/Ground-Monitor-25-26.pdf?version=0
(Supporting detail for country-by-country ranges and commentary)
4) U.S. rental price index change (YoY) and other CPI context
- U.S. Bureau of Labor Statistics (BLS): CPI News Release archive (Aug 2025 results)
https://www.bls.gov/news.release/archives/cpi_09112025.htm
(Used for: “Car and truck rental” -4.8% 12-month change from Aug 2024 to Aug 2025)
- BLS CPI PDF
https://www.bls.gov/news.release/pdf/cpi.pdf
5) Transportation cost comparisons and vehicle ownership cost items
- U.S. DOT Bureau of Transportation Statistics (BTS): Transportation Economic Trends – Transportation Costs (Households)
https://data.bts.gov/stories/s/Transportation-Economic-Trends-Transportation-Cost/5h3f-jnbe/
(Used for: 2023–2024 “year-in-review” transport cost comparisons; private vs public transport index change; insurance and maintenance/repair increases)
6) Driver licensing (context for “licensed drivers” statement)
- FHWA Highway Statistics 2021 (Table DL-1C PDF): Licensed drivers and ratio relative to population
https://www.fhwa.dot.gov/policyinformation/statistics/2021/pdf/dl1c.pdf
- BTS “Licensed Drivers” (references FHWA DL-1C; dataset page)
https://www.bts.gov/content/licensed-drivers
Methodology / Notes
- This article is a synthesis of publicly available government data and third-party industry research.
- “Price” references may reflect indices (e.g., CPI) rather than average daily rental rates; indices measure changes over time, not absolute prices.
- The -4.8% figure refers to the BLS CPI item category “Car and truck rental” (12-month change: Aug 2024 to Aug 2025; not seasonally adjusted).
- Forecast ranges (e.g., +1.5% to +1.9%) are projections from Amex GBT’s Ground Monitor; actual outcomes may differ by city, season, vehicle class, and supply conditions.
- Global market totals/shares (e.g., USD 108B by 2029; US share; leisure share) are taken from a ResearchAndMarkets summary/press release that references an underlying paid report.
- Transportation sector comparisons (overall/“private”/“public” indices, plus insurance and maintenance/repair changes) are drawn from BTS Transportation Economic Trends and are based on CPI-derived indices.
- Driver licensing figures reference FHWA/BTS tables that report licensed-driver counts and ratios relative to driving-age population and/or population; if you claim “over 90%,” clarify it refers to driving-age ratios (16+) rather than the entire population.
- This content is informational only and does not constitute financial or travel advice.
Disclosure: Prepared by Hola Car Rentals using public sources; provided for informational purposes.
