Vehicle Leasing Market In Europe size is set to grow by USD 10.1 billion from 2025-2029, cost-effective ways of obtaining vehicle boost the market- Technavio

NEW YORK, Jan. 28, 2025 /PRNewswire/ -- The global vehicle leasing market in europe size is estimated to grow by USD 10.1 billion from 2025-2029, according to Technavio. The market is estimated to grow at a CAGR of 3.7% during the forecast period. cost-effective ways of obtaining vehicle is driving market growth, with a trend towards rise in demand for leasing evs to optimize vehicle performance and reduce emissions globally However, challenge posed by on-demand taxi operators  poses a challenge.Key market players include ALD SA, Allane SE, Arval Service Lease, Bayerische Motoren Werke AG, Central Contracts Ltd, Central UK Vehicle Leasing Ltd., Deutsche Leasing AG, ExpatRide International Inc., Groupe BPCE, King and Mayr GmbH and Co. KG, LocautoRent S.p.A., Mercedes Benz Group AG, Millennium Leasing sp zoo, PKO Bank Polski, Porsche Automobil Holding SE, Citroen, Rivervale Cars Ltd, Sofina SA, and Stellantis NV.

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Market Driver

The European vehicle leasing market is experiencing significant trends, with electric vehicles gaining popularity. E-commerce platforms are transforming the way people lease cars, providing convenience and accessibility. Big data and IoT technology are revolutionizing leasing companies' operations, enabling real-time vehicle diagnostics and efficient transportation systems. Blockchain technology ensures secure and transparent lease contracts. The tourism industry and smart cities are major sectors driving leasing demand, with utility trailers, commuter cars, buses, and recreational vehicles in high demand. Automobile leasing companies offer finance leasing, long-term leases, and gap insurance for new and used cars, including electric and hybrid electric vehicles. Awareness among consumers about low maintenance, on-demand vehicles, and reducing travel time in busy lifestyles is increasing. Rapid urbanization and emission norms to combat air pollution are also influencing the market. Car equipment rental and lease contracts are becoming more flexible, with additional fees for carbon emissions and usage-based pricing. Mobility solutions, including car sharing and ride-hailing services, are becoming increasingly popular. Machine learning and AI are used to predict residual values and optimize leasing offers. The used car industry is also adopting these trends, with verified data and real-time diagnostic information available to buyers and sellers. The European vehicle leasing market is evolving, with a focus on sustainable, flexible, and convenient mobility solutions. Leasing companies are leveraging technology to provide better customer service and optimize their offerings. The market is expected to continue growing, driven by population demand and the need for efficient transportation systems in urban areas. 

The European vehicle leasing market is experiencing significant growth, particularly in the electric vehicle (EV) sector. EVs utilize an electric motor, featuring only one moving part, resulting in reduced maintenance costs compared to internal combustion engine (ICE) vehicles. The compact electric motor also contributes to weight reduction, enabling additional vehicle features. The efficient electric motor delivers instant torque and operates with high efficiency due to the absence of multiple moving parts. Regenerative braking further enhances the vehicle's range, making EVs an attractive option for businesses seeking cost savings and environmental consciousness in their fleets. Air pollution remains a pressing concern in political and economic arenas, making the adoption of cleaner transportation solutions, such as EVs, increasingly important. 

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Market Challenges

• The European vehicle leasing market faces several challenges in the current business landscape. Electric vehicles are gaining popularity, necessitating infrastructure upgrades and higher costs for leasing companies. E-commerce platforms are disrupting traditional sales channels, requiring adaptability from leasing firms. Big data, IoT technology, and machine learning are essential for efficient operations, but their implementation can be costly. The tourism industry and smart cities present opportunities for leasing companies, particularly in the rental of commuter cars and utility trailers. However, challenges persist in sectors like buses, recreational vehicles, and car equipment rental due to competition from big companies offering long-term leases and low maintenance vehicles. Awareness among consumers about electric cars and emission norms is increasing, leading to demand for hybrid electric vehicles. Rapid urbanization, busy lifestyles, and population demand call for efficient transportation systems, reducing traffic congestion. Lease contracts, finance leasing, and mobility solutions are key offerings for leasing companies. Gap insurance, additional fees, and carbon emissions are concerns for both sellers and buyers. Blockchain technology and real-time data verification can address transparency issues. Leasing companies must adapt to these challenges while ensuring residual value and competitive pricing.
• In Europe, urban areas witness high demand for on-demand taxi services due to the convenience they offer in terms of time and cost. Parking spaces are scarce in congested urban areas, making finding a parking spot a challenge. Traffic congestion further complicates driving in cities, making on-demand taxis an attractive alternative to car leasing. As a result, the popularity of on-demand taxis is reducing the demand for car leasing, particularly in urban regions where both services are readily available.

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Segment Overview 

This vehicle leasing market in Europe report extensively covers market segmentation by  

1. Type 
• 1.1 Passenger cars
• 1.2 Commercial vehicles
2. Mode Of Booking
• 2.1 Online
• 2.2 Offline
3. Geography 
• 3.1 Europe

1.1 Passenger cars- The European vehicle leasing market is experiencing significant growth due to the cost-effective nature of leasing cars compared to buying them. Factors such as urbanization and increased Internet penetration are driving awareness about car leasing. Leasing offers customers the flexibility to upgrade to new models and buy the vehicle at lease end. Subscription-based car leasing programs, like AB Volvo's Care by Volvo, are also gaining popularity, providing affordable access to premium vehicles. Market enablers include the growing demand for SUVs, hatchbacks, and sedans, as well as the need for convenience, safety, and advanced technologies in passenger cars. Rapid electrification and advancements in the automotive industry are encouraging customers to lease new vehicles with modern features. These factors will continue to drive growth in the passenger car segment of the European vehicle leasing market.

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Research Analysis

The European vehicle leasing market is experiencing significant growth, driven by various factors including the rise of electric vehicles (EVs), e-commerce, and the integration of big data and blockchain technology. The tourism industry and smart cities are major sectors adopting vehicle leasing for commuting and utility purposes. Leasing companies offer a wide range of vehicles, from commuter cars and buses to recreational vehicles, utility trailers, and even hybrid electric vehicles. The market is also influenced by the retail sector, with car equipment rental companies offering flexible leasing contracts. Buyers and sellers engage in lease transactions, with the leasing company acting as a facilitator. Rapid urbanization and the increasing popularity of new vehicles further fuel market growth. The residual value of leased vehicles is a crucial factor for both lessors and lessees, making customer service a top priority for leasing companies.

Market Research Overview

The European vehicle leasing market is experiencing significant growth, driven by various factors including the rise of electric vehicles, e-commerce, and the increasing importance of big data and IoT technology. Electric cars and hybrid electric vehicles are becoming increasingly popular due to awareness among consumers about air pollution and emission norms. The tourism industry and smart cities are also adopting leasing solutions for efficient transportation systems and reducing traffic congestion. Leasing companies offer finance leasing and long-term contracts for new vehicles, including commuter cars, buses, recreational vehicles, and utility trailers. The retail sector and car equipment rental industries are also major consumers of leasing services. Blockchain technology and machine learning are being integrated into lease contracts for verified data and real-time diagnostic of vehicles. The used car industry is also benefiting from the leasing market, with on-demand vehicles and car sharing services gaining popularity. Rapid urbanization and busy lifestyles are driving the demand for mobility solutions, leading to the growth of mobility as a service (MaaS) offerings. Additional fees for gap insurance and carbon emissions are also factors to consider in the leasing market.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Type
• Passenger Cars
• Commercial Vehicles
• Mode Of Booking
• Online
• Offline
• Geography
• Europe

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

About Technavio

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SOURCE Technavio