Automotive Leasing Market - Size, Share, Industry Trends, and Forecasts (2025-2032)

By Lease Type:

Based on lease type, the market is segmented into open-end lease, closed end lease, single payment lease, and others.

Trends in the lease type:

• Increasing preference of consumers for open-end lease options due to no set parameters around vehicle damage.
• Factors like the flexibility of returning the vehicle after the lease period and no restrictions on mileage allowance are driving the open-end lease segment.

Open-end lease accounted for the largest revenue share of 52.28% in the year 2024, and it is anticipated to register the fastest CAGR during the forecast period. 

• Open-end lease is ideal for consumers who prefer using a vehicle before purchasing if they are unsure about buying.
• Many car and financing companies allow the consumer to buy out their vehicle at the end of the lease period at flexible residual values.
• Additionally, the inclusion of General Asset Protection (GAP) insurance offers protection to customers in the event the customer owes more than the vehicle’s actual cash value.
• For instance, GM Financial offers many features for open-end leases, like flexible residuals at the end of the lease and GAP coverage to offer security in the event something happens to the vehicle or if the vehicle depreciates.
• According to the market analysis, the rising adoption of open-end leases as a result of the flexibility of buying the vehicle at the end of tenure and GAP insurance coverage is driving the automotive lease market.

By Vehicle Type:

Based on vehicle type, the market is segmented into passenger vehicles and commercial vehicles.

Trends in the vehicle type:

• Rising demand for commercial vehicle leasing is due to growth in large, medium, and small-sized fleet owners.
• Factors including lower monthly payments and flexible lease options are driving the passenger vehicles segment.

Passenger vehicles accounted for the largest revenue share in the year 2024.

• Passenger vehicle sales have experienced growth due to rising income levels, affordable pricing options, and growth in leasing services offered by car companies.
• Many financial institutions offer attractive interest rates and monthly payments on car leases compared to car loans, making car leasing popular.
• For instance,Ford offers a Red Carpet Lease option to customers looking to lease Ford cars. With Red Carpet Lease, the customers can customize mileage options and pay lower monthly payments, owing to the fact that the payments cover a portion of the vehicle instead of the entire vehicle.
• According to the analysis, increasing adoption of passenger vehicle leasing due to attractive interest rates and pricing options is driving the automotive leasing market trends.

Commercial vehicles are anticipated to register the fastest CAGR during the forecast period.

• Commercial vehicles are used by businesses, fleet management services, and governments for the purpose of transporting goods or services.
• Commercial vehicle leasing comes with many advantages, including tax deductions, as the monthly payments are counted as business expenses.
• Moreover, leasing providers offer features including leases on trucks that are customized to the business’s needs with specific add-ons.
• For instance, Penske Truck Leasing offers leasing on heavy-duty trucks with customizable tandem-axle sleeper tractors, suitable for truck drivers who want the comfort of a sleeper berth for long journeys.
• According to the automotive leasing market analysis, the increasing advancements related to commercial vehicle leasing are anticipated to boost the automotive leasing market trends during the forecast period.

By Fuel Source:

Based on the fuel source, the market is segmented into internal combustion engine (ICE) vehicles and electric vehicles (EVs).

Trends in the fuel source:

• Increasing adoption of leasing for ICE vehicles with customized options like high mileage payment plans, GAP coverage, and various end-of-lease plans is driving the automotive leasing market share.
• Growing investments in electric vehicle infrastructure to support growing electric car demand are driving the market.

Internal combustion engine (ICE) vehicles accounted for the largest revenue share in the year 2024.

• ICE vehicle leasing is driven primarily by the dominant portion of ICE cars with petrol and diesel-based engines.
• ICE vehicle leasing is popular due to the relatively cheaper price of the vehicles compared to electric vehicles, resulting in the automotive leasing market expansion.
• Moreover, many companies today offer additional insurance coverage on top of GAP to protect car owners from unexpected expenses in the form of wear and tear.
• For instance, Ford, a major manufacturer of ICE vehicles, offers WearCare to protect vehicle owners from wear and tear for vehicles that weigh up to 16,000 lbs.
• Therefore, the increasing adoption of auto leasing solutions in ICE vehicles due to additional insurance coverage options is driving the automotive leasing market size.

Electric vehicles (EVs) are anticipated to register the fastest CAGR during the forecast period.

• The fuel efficiency of Electric Vehicles makes them a popular choice among consumers who prefer the affordability that comes from reduced fuel costs.
• Moreover, governments have started introducing tax incentives for businesses or individuals leasing electric cars due to their reduced CO2 emissions.
• For instance, according to KIA, when a company leases an electric car in the UK, it can claim 50% of the Value Added Tax (VAT) charged on the monthly leasing payments.
• Thus, the rising number of electric vehicles leasing due to tax incentives is propelling the overall market during the forecast period.

By End User:

Based on the end user, the market is segmented into individuals and enterprises.

Trends in the end user:

• Increasing adoption of auto leasing for individuals through mobile apps and websites, driving the automotive leasing market share.
• There is a rising trend towards the utilization of auto leasing by enterprises for various business purposes, like online taxi services, among others.

Individuals accounted for the largest revenue share in the market in 2024.

• The dominance of individual customers is attributed to the rising adoption of auto leasing services offering customized and tailored leasing plans to individuals.
• Many online platforms today offer leasing solutions for electric vehicles through the internet, offering vehicle selection, lease plans, document verification, and vehicle delivery.
• For instance, Alt Mobility offers electric vehicle leases in just 3 steps. The steps involve selecting vehicle make, model, and lease tenure on their website. The user then has to submit documents and pay the deposit amount. Once approved, the vehicles are delivered to the nearest authorised dealer in the user’s location.
• Therefore, the increasing development of auto leasing solutions through online platforms is driving the automotive leasing market.

Enterprises are anticipated to register the fastest CAGR during the forecast period.

• Automotive leases are increasingly being used by enterprises for fleet management and handling due to reduced maintenance expenses and streamlined operations.
• Moreover, the utilization of auto leasing for corporate car leases for employee mobility has driven the industry.
• For instance, Orix India offers corporate car lease solutions for companies looking to lease cars for employees and other business mobility-related requirements.
• Hence, the growing demand for enterprise due to an increase in the utilization of leasing for fleets has resulted in the automotive leasing market expansion during the forecast period.