Australia Car Rental Market Size Analysis - Market Share, Forecast Trends and Outlook Report (2025-2034)

Australia Car Rental Market Trends

The Australia car rental market has expanded, supporting tourism by providing convenient and affordable travel options with a wide selection of vehicles. It enables tourists to explore remote regions without the cost or commitment of owning a car. In August 2024, Uber launched a new car rental feature within its Australian app, partnering with CarTrawler to offer rentals from nearly 30 providers, with over 1,700 pick-up locations nationwide.

Business travellers also benefit from flexible rental options for both short-term and long-term needs, driving demand for the Australia car rental market. The availability of the latest vehicle models ensures fuel efficiency, advanced features, and greater overall convenience.

Australia Car Rental Market Growth

The industry stimulates the local economy by creating jobs and boosting related sectors, thereby impacting the Australia car rental market revenue. It also provides practical advantages, such as easier airport access, reducing wear on personal vehicles, and alleviating maintenance concerns for renters. In October 2022, Evee became the first car rental platform in Australia to offer the Tesla Model Y. The electric vehicle quickly gained popularity, making up 40% of all hires. Evee now provides over 30 Model Ys across the country, offering tailored EV hire experiences.

Car rentals offer a viable alternative to public transport, particularly in rural areas, driving the growth of the Australia car rental market. Basic insurance is often included, and digital booking systems streamline the process. Eco-conscious travellers can opt for electric or hybrid vehicles, supporting sustainable transport initiatives.

Australia Car Rental Market Insights

• Electric cars accounted for 3.1% of sales in 2022, as reported by the FCAI. EVs provide long-term cost savings, reduced environmental impact, and government incentives, making them an attractive option for environmentally-conscious drivers. The increasing adoption of EVs indicates a growing shift towards cleaner, sustainable transportation in Australia.
• As per industry reports, the average Australian household owned 1.8 vehicles in 2022. This reflects a strong reliance on personal vehicles for commuting and family needs. Multiple car ownership is particularly common in suburban and rural areas, where public transport options may not be as accessible or convenient.
• According to BITRE, there were 21.2 million registered motor vehicles in Australia as of January 31, 2023, marking a 2.3% increase from January 2022. This growth highlights the steady demand for personal vehicles across the country, emphasising the importance of the car rental market in providing mobility solutions for Australians.

Australia Car Rental Market Drivers

Rising Demand for Tourism

The growth in Australia’s tourism sector has notably enhanced opportunities in the Australia car rental market. As both international and domestic tourists increasingly seek flexible travel options, car rentals are becoming more popular, giving visitors the freedom to explore at their own pace and improving their travel experiences. Turo, a US-based car-sharing service, expanded to Australia in November 2022, offering a more personalised and convenient alternative to traditional car rentals. With over 175,000 active hosts, Turo provides access to electric vehicles, promoting EV adoption while supporting tourism and local economies.

Growing Preference for Eco-friendly Vehicles

Environmental consciousness is leading to a noticeable shift towards renting eco-friendly vehicles, shaping the Australia car rental market dynamics and trends. More consumers are choosing electric and hybrid cars to reduce their carbon footprints, prompting rental companies to broaden their fleets with sustainable options. The Australian Renewable Energy Agency (ARENA) has granted USD 4.76 million to Europcar Mobility Group for the ‘Electric Rental Vehicle and Charging Infrastructure Rollout’ project, which will establish 256 chargers across 41 sites and introduce 3,100 electric rental cars over the next three years.

Opportunities in the Australia Car Rental Market

Technological progress represented a key trend in the Australia car rental market. Innovations such as digital platforms, mobile applications, and contactless check-ins enhanced convenience for customers. Meanwhile, vehicle tracking and telematics improved fleet management, boosting operational efficiency and service quality. In June 2022, Avis Australia introduced Avis Prestige, a luxury rental brand offering premium models like Ferraris and Lamborghinis. In partnership with Prestige Rentals, the brand catered to special occasions and extended its presence across major Australian cities, complementing the existing Avis Signature Series.

Market Restraints

The Australia car rental market faces various constraints, including high operating costs, such as maintenance and fuel, and the need for fleet updates. Stricter regulatory compliance and technological adaptation add further pressure. Economic fluctuations, fraud risks, and competition from alternative transport, like ridesharing, challenge profitability.

Additionally, managing fleet maintenance and booking systems is complex, while data privacy concerns affect online services. Limited availability in remote areas restricts market growth. Addressing these requires strategic planning, technological investment, and adapting to regulations.

Australia Car Rental Market Share

Market Analysis by Booking Type

According to the Australia car rental market analysis, online booking dominates the market by providing customers with convenience and flexibility. It enables users to compare prices, check availability, and make reservations anytime, anywhere, reducing waiting times and improving the user experience. Additionally, it often offers access to exclusive deals and discounts. Hertz presents a variety of car hire deals and locations across Australia, with perks like 15% discounts for RAC, RACT, RACV, RACQ, RAA, and AANT members. The company also provides flexible rental options, exclusive Gold Plus Rewards, and a diverse selection of vehicles, including luxury sedans, SUVs, and EVs.

Offline booking caters to a more personalised experience, driving demand for the Australia car rental market. It allows customers to communicate directly with rental agents, ask questions, and receive tailored recommendations. This approach is ideal for those who prefer face-to-face interactions or lack internet access, offering a more secure and reassuring experience for customers looking for specific vehicles or long-term rentals.

Market Analysis by Vehicle Type

Growth of the Australia car rental market has been driven by demand for luxury and premium vehicles, which appeal to customers prioritising comfort, performance, and prestige. These cars are especially suited to business trips and special events, offering refined interiors and advanced features. In response to rising interest, Porsche Cars Australia expanded its Porsche Drive rental service to four additional cities in November 2024. Since its launch in 2022, over 400,000km have been driven, with 67% of users enjoying their first Porsche experience through the service.

Economy and budget vehicles remain highly popular in the Australian rental market due to their low cost and excellent fuel efficiency. They are particularly suitable for individuals and small families, providing practical and affordable transport for city travel or short journeys. Their small size makes them easy to handle and park, making them ideal for navigating urban environments and daily commuting.

SUVs present strong growth potential in the Australian rental market thanks to their spacious design, comfort, and ability to handle varied terrain. Favoured by families and adventure travellers, they offer generous boot space and a raised driving position for improved visibility. In March 2025, Rentalscar introduced a premium rental service in Perth, including SUVs, hatchbacks, and sedans, as well as a no-cost accident replacement option for qualifying customers.

MUVs are highly valued in the Australian car hire sector for their capacity and versatility. Designed to seat larger groups or families, they provide ample space for passengers and luggage, making them an excellent choice for road trips and touring holidays. These vehicles are especially popular among domestic holidaymakers and tourists looking for a comfortable and convenient travel option for long distances.

Market Analysis by Application

According to the Australia car rental market report, leisure and tourism travellers benefit greatly from the freedom of self-driving, allowing them to discover destinations at their own pace. Hiring a car offers easy access to remote locations, scenic routes, and key tourist sites. In February 2025, Australia recorded a total of 1,870,730 arrivals, reflecting a 4.7% rise compared to the same month in the previous year. Departures reached 1,517,920, marking a 1.8% increase year-on-year, according to the ABS.

For business travellers in Australia, car hire provides a practical and efficient transport solution, supporting attendance at meetings, conferences, and on-site visits, impacting the Australia car rental market revenue. The sector offers both short- and long-term hire options, with vehicle choices tailored to business needs, from premium cars for client meetings to larger vehicles for team travel. Additional benefits include corporate rates and loyalty rewards.

Australia Car Rental Market Regional Insights

New South Wales Car Rental Market Overview

The New South Wales car rental market offers flexibility, catering to both tourists and business travellers, with diverse vehicle options and competitive pricing. It supports seamless travel across urban and rural areas. In May 2024, Eco Autos launched a rent-to-own program in Sydney for eco-friendly vehicles, offering flexible terms starting at USD 189/week. This initiative aimed to make sustainable driving more accessible for individuals and businesses.

Queensland Car Rental Market Trends

Queensland’s car rental market sees increasing demand from tourists, particularly for flexible, self-drive options. Growth in eco-friendly vehicle rentals and partnerships with tourism operators reflects the evolving consumer preference for sustainability. The 10-year strategy committed to Queensland’s zero net emissions goal by 2050, with targets including 50% zero-emission passenger vehicles by 2030, a 100% government fleet by 2026, and zero-emission buses from 2025.

Western Australia Car Rental Market Dynamics

Western Australia’s car rental market benefits from high demand for remote and adventure travel. With vast landscapes, it offers diverse rental choices, providing tourists and locals with convenient transport options across the state. The WA Government is investing USD 200 million in a State Electric Vehicle Strategy to electrify cars and buses, offering rebates, infrastructure, and initiatives to support the adoption of Zero-tailpipe Emission Vehicles.

Competitive Landscape

The Australia car rental market key players offer cost-effective car rental services globally, serving both leisure and business travellers. They provide a varied fleet for short- and long-term rentals and offer a range of mobility solutions for customers across both business and leisure sectors, catering to diverse rental needs.

Key Industry Players

Budget Rent a Car System Inc.: Founded in 1958, Budget Rent a Car System Inc. is headquartered in Florida, United States. It provides affordable car rental services worldwide, catering to both leisure and business travellers. As a subsidiary of Avis Budget Group, it operates a fleet of vehicles across numerous global locations.

Avis Rent a Car System LLC: Established in 1946, Avis Rent a Car System LLC is based in New Jersey, United States. Offering a wide range of vehicles for rent, Avis serves business and leisure customers globally. The company operates in over 165 countries and is part of the Avis Budget Group, known for quality and reliability.

The Hertz Corporation: The Hertz Corporation, founded in 1918 and headquartered in Florida, United States, is a global leader in car rental services. Operating in over 150 countries, Hertz provides a diverse fleet for both short- and long-term rentals, and it offers various mobility solutions for customers across business and leisure segments.

Europcar International S.A.S.U.: Founded in 1949 and headquartered in Paris, France, Europcar International S.A.S.U. is a prominent car rental company operating in over 140 countries. The company offers a broad range of vehicles for hire, catering to business, leisure, and long-term rentals, and is a leader in the European car rental market.

Other key players in the Australia car rental market are Alpha Car Hire Trading Pty Ltd., Acorn Rentals, Enterprise Holdings, Inc., Sixt SE, East Coast Car Rentals, and Jucy Group Limited among others.

Recent Developments

December 2024

Drive Mate launched a car-share hub near Sydney Airport, offering vehicles starting at USD 40 a day with no wait times. Customers can book cars directly through the Drive Mate app. The service guarantees the vehicle booked is the one received, providing a seamless and affordable rental experience.

July 2024

Uber launched Uber Rent in Australia, allowing users to rent cars directly through the Uber app. This feature, available in the US, Canada, and Europe, offers a seamless car rental experience, enabling customers to choose from a variety of vehicles at over 1700 locations. Uber partnered with Car Trawler, including rental giants like Avis and Hertz.