Vehicle Leasing Market in Europe to Grow by USD 10.1 Billion (2025-2029), Cost-Effective Vehicle Acquisition Boosts Market, Report with Market Evolution Powered by AI - Technavio

NEW YORK, Feb. 5, 2025 /PRNewswire/ -- Report on how AI is driving market transformation - The 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 (EVs) gaining popularity due to increasing awareness among consumers and stricter emission norms. E-commerce platforms are transforming the way people lease cars, providing convenience and accessibility. Big data and IoT technology are revolutionizing the industry, enabling real-time vehicle diagnostics and predictive maintenance. Blockchain technology ensures secure and transparent lease contracts. The tourism industry and smart cities are adopting leasing for efficient transportation systems, reducing traffic congestion. Automobile leasing companies offer various options, including commuter cars, buses, recreational vehicles, and utility trailers. Lease contracts can be finance leases or long-term agreements. The used car industry is also benefiting from this trend, with low maintenance costs and high residual values. The mobility sector is evolving, offering on-demand vehicles for busy lifestyles. However, challenges such as air pollution and carbon emissions remain, with a focus on hybrid electric vehicles and eco-friendly solutions. Additional fees, gap insurance, and verified data are essential considerations for both sellers and buyers. The future of vehicle leasing lies in the integration of technology, sustainability, and customer service. 

The European vehicle leasing market is witnessing a significant shift towards Electric Vehicles (EVs) due to their cost-effective and eco-friendly advantages. An EV uses an electric motor, which has only one moving part compared to an Internal Combustion Engine (ICE) vehicle's multiple moving parts. This results in lower maintenance costs and increased efficiency. Additionally, the compact size of the electric motor contributes to reducing the vehicle's weight, allowing for more features. The absence of multiple moving parts in the engine delivers instant torque on demand and higher efficiency. Regenerative braking, another advantage of EVs, helps increase the vehicle's range. Air pollution is a pressing concern in political and economic forums, making the environmental benefits of EVs increasingly valuable. 

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Market Challenges

• The European vehicle leasing market faces several challenges in the current business landscape. Electric vehicles are gaining popularity, requiring leasing companies to adapt to new technologies and infrastructure. E-commerce platforms are disrupting traditional sales channels, necessitating effective digital strategies. Big data and IoT technology are essential for predictive maintenance and customer service, while blockchain ensures secure and transparent lease contracts. The tourism industry, smart cities, and utility trailers present new opportunities for leasing companies. Automobile leasing firms must cater to various segments like commuter cars, buses, recreational vehicles, and car equipment rental. Awareness among consumers about electric cars and hybrid electric vehicles is increasing due to concerns over air pollution and emission norms. Rapid urbanization and busy lifestyles lead to traffic congestion, necessitating efficient transportation systems. Leasing companies must offer long-term leasing options, competitive residual values, and additional fees for gap insurance. The used car industry is another significant market segment, requiring innovative solutions for verification of data and real-time diagnostic of vehicles. Leasing companies must stay updated on machine learning, carbon emissions, and climate change to remain competitive. Effective customer service, competitive pricing, and flexible lease terms are crucial to attract both buyers and sellers. The future of vehicle leasing lies in on-demand vehicles, without driver facilities, and real-time data analysis.
• 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 cities, making finding one a significant challenge. Traffic congestion further complicates driving in urban areas, making on-demand taxis an attractive alternative to personal car ownership through leasing. As a result, the increasing popularity of on-demand taxis is decreasing 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

• Type
• Passenger Cars
• Commercial Vehicles
• Mode Of Booking
• Online
• Offline
• Geography
• 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. Customers benefit from the option to purchase vehicles at lease end and upgrade to newer models. Manufacturers, including AB Volvo with Care by Volvo, offer subscription-based leasing programs to boost revenue and brand penetration. The demand for SUVs, hatchbacks, and sedans, along with the growing preference for convenience, safety, and electrification, is fueling the passenger car segment's growth. Advancements in the automotive industry, encouraging the adoption of modern technologies, further boost the market. These factors collectively contribute to the expansion of the vehicle leasing market in Europe.

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Research Analysis

The European vehicle leasing market is experiencing significant growth, driven by the shift towards electric vehicles (EVs) and the integration of technology trends such as e-commerce, big data, blockchain, and customer service. The tourism industry and smart cities are major sectors adopting vehicle leasing solutions for their fleets. Automobile leasing companies offer a range of vehicles, including commuter cars, buses, recreational vehicles, utility trailers, and hybrid electric vehicles, catering to both individuals and businesses. Lease contracts are customized to meet the specific needs of buyers, with residual values determined based on the vehicle's age, condition, and market trends. Sellers and leasing companies leverage e-commerce platforms for transactions, while car equipment rental and retail stores offer complementary services. Rapid urbanization and the increasing popularity of new vehicles further fuel the market's expansion.

Market Research Overview

The European vehicle leasing market is experiencing significant growth, driven by the shift towards electric vehicles (EVs) and the integration of technology trends such as e-commerce, big data, blockchain, and IoT. The tourism industry and smart cities are major contributors to this trend, as they seek efficient transportation systems to address rapid urbanization and traffic congestion. Leasing companies offer various types of vehicles, including commuter cars, buses, recreational vehicles, and utility trailers, catering to diverse customer needs. The retail sector and car equipment rental industries also leverage leasing to manage their fleets. Lease contracts can be finance leases or mobility solutions, providing flexibility for buyers with busy lifestyles. The used car industry is also impacted, as leased vehicles often enter the market after their lease term ends. Awareness among consumers about the benefits of leasing, such as low maintenance costs and without driver facilities, is on the rise. However, additional fees, carbon emissions, and emission norms are key considerations. Blockchain technology and machine learning are being explored to enhance transparency and accuracy in lease contracts, while IoT technology enables real-time data and diagnostic capabilities.

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

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