Australia Car Rental Market

Australia Car Rental Market Size and Share:

The Australia car rental market size was valued at USD 2,717.8 Million in 2024. Looking forward, IMARC Group estimates the market to reach USD 4,476.0 Million by 2033, exhibiting a CAGR of 5.7% from 2025-2033. The market is driven by a recovering tourism sector, increased business travel, digital adoption of booking platforms, growing demand for sustainable vehicle options, and a shift towards flexible mobility solutions.

Australia is a popular tourist destination that has been attracting millions of visitors every year. This influx of both international and domestic tourists significantly boosts the demand for car rentals. A total of 630,700 short-term trips were recorded in September 2024, which is an increase of 46,070 compared with the corresponding month of the previous year. Tourists who come to explore Australia’s vast landscapes often prefer renting cars due to the country's large size and the freedom it offers in terms of travel. In this regard, rental cars provide a flexible and convenient way to travel across long distances, especially in regions where public transport may be less frequent or efficient.

The modern consumer values flexibility more than ever before, and this has contributed to the popularity of car rentals in Australia. Renting a car provides a sense of independence, allowing individuals to choose their travel schedules without being reliant on public transport timetables or taxi availability. In an industry survey, it was found that almost one in four (23%) Aussies do not want to use their own car for road trips while one in five (19%) want to splurge on something different. This is especially true for people who need a vehicle for a short-term purpose, like business trips, vacations, or even just a day trip around the city.

Australia Car Rental Market Trends:

Rise of the Sharing Economy and Peer-to-Peer Rentals

A major factor affecting the growth of Australia’s car rental market is the rise of the sharing economy, where individuals rent out their personal vehicles to others through peer-to-peer rental platforms. Companies like Car Next Door, DriveMyCar, and Turo have revolutionized the way people think about car rentals, giving consumers the option to rent a car directly from an individual owner rather than a traditional rental agency. According to a recent report by the Australian Bureau of Statistics, 65% of Australian households own at least one car, which is widening the scope of car renting. Peer-to-peer rentals also cater to niche markets, such as renting electric vehicles (EVs), luxury cars, or specialty vehicles that are not always available at traditional rental services. This shift towards peer-to-peer rentals offers more variety and can be more cost-effective, further driving the car rental market in Australia.

Business Travel Demand

Business travel is a significant driver of the car rental market in Australia. As businesses continue to expand, more professionals are traveling for meetings, conferences, or site visits. In the ending June 2024, business travel accounted for 777,000 international trips to Australia, representing 78% of June 2019 levels, with expenditures reaching $2.3 billion, a 1% increase from June 2019. Renting a car provides a practical solution for professionals who need to travel between meetings, especially in cities with sprawling suburbs or locations that are not easily accessible via public transport. The flexibility of having a rental car at one’s disposal means that business travelers can adjust their schedules as needed without worrying about the limitations of taxis or buses. This demand has been further amplified as hybrid work models and global business expansion continue to grow. Car rental services cater to business needs by offering fleet options, premium vehicles, and even tailored corporate rental packages, which provide convenience and efficiency for companies and their employees.

Cost-Effectiveness Compared to Car Ownership

Owning a car in Australia can be expensive, especially when considering ongoing costs like insurance, registration, maintenance, and fuel. As per an industry study, 673,969 households in Australia do not own a car. For people who do not require a car on a daily basis or those living in urban areas where public transport options are plentiful, renting a car can be a more cost-effective solution. This factor is especially relevant for people who only need a vehicle for occasional use, such as weekend trips or short-term needs, rather than for daily commuting. In the year 2024, short-term arrivals accounted for 630,700 visits. Car rental provides access to vehicles without the long-term financial commitment associated with ownership, making it a popular choice for many Australians, particularly younger people, students, or those who are more environmentally conscious and prefer to avoid the costs and responsibilities of owning a vehicle.

Australia Car Rental Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the Australia car rental market, along with forecasts at the country and regional levels from 2025-2033. The market has been categorized based on booking type, rental length, vehicle type, application, and end user.

Analysis by Booking Type:

• Offline Booking
• Online Booking
   

A sizeable section of the Australian car rental industry continues to be served by the offline booking sector, particularly among clients who lack access to digital platforms or want individualized assistance. Many tourists, especially those in distant locations and elderly populations, rely on offline channels including travel agencies, rental shops, and phone bookings. As clients speak with employees directly to discuss to clarify terms, haggle over prices, or request certain services, offline reservations frequently provide a feeling of dependability and flexibility.

The popularity of smartphones and internet penetration are the main drivers of the online booking market. Because digital platforms make it easier for customers to compare costs, peruse car selections, and make fast reservations, they are becoming increasingly popular. The rise of mobile apps and user-friendly websites, integrated with features like real-time availability, discount codes, and loyalty programs, is enhancing the appeal of this segment.

Analysis by Rental Length:

• Short Term
• Long Term
   

Tourists, business travelers, and locals who want cars for a few hours to a few days are all served by short-term rentals. This market niche flourishes in places where convenience and adaptability are valued, such as cities, airports, and popular tourist destinations. Short-term rentals are preferred by customers for last-minute mobility requirements, business meetings, and weekend vacations. Businesses in this market category concentrate on offering a wide range of car alternatives at low prices, frequently with supplementary services like insurance plans and GPS systems.

Due to the rising demand from temporary workers, overseas residents, and businesses needing cars for lengthy periods of time, long-term rentals are becoming a growing trend in Australia. Businesses wishing to offer dependable staff transportation without the expense and commitment of fleet ownership are drawn to this market. Long-term rentals typically range from a few weeks to several months and often come with attractive pricing models, including discounted rates and flexible terms.

Analysis by Vehicle Type:

• Luxury
• Executive
• Economy
• SUVs
• Others
   

The luxury car rental industry in Australia serves visitors looking for first-rate experiences, high-income individuals, and business professionals. This market is also popular for events where comfort and luxury are important, such as weddings, business gatherings, and vacations. High-end amenities like chauffeur services, leather interiors, and cutting-edge safety systems are frequently included with luxury rentals.

Professionals and businesses needing mid-range cars for work are the target audience for executive rentals. Sedans and crossovers in this market sector combine cost, performance, and comfort. These cars are frequently utilized for client meetings, airport transfers, and business travel. For continuous and dependable staff mobility, businesses often reserve executive cars on long-term rental contracts.

Economy vehicles form the backbone of Australia’s car rental market, catering to budget-conscious customers, including tourists, students, and small business owners. Compact cars dominate this segment, offering fuel efficiency, affordability, and practicality for city and short-distance travel. The economy segment thrives due to its accessibility and widespread availability, making it the go-to choice for most domestic travelers. Discounts, promotional deals, and the rising trend of online booking further bolster demand, ensuring this segment remains the largest by volume.

The SUV segment is increasingly popular in Australia, driven by its versatility and suitability for family trips, off-road adventures, and regional travel. They offer ample space, safety features, and powerful performance. This segment is especially attractive to tourists exploring Australia’s diverse terrain, from coastal roads to the rugged outback. The growing preference for SUVs among locals for group travel and road trips further boosts this segment.

Analysis by Application:

• Leisure/Tourism
• Business
   

The nation's appeal as a tourist destination propels the leisure and tourism sector. Both domestic and foreign visitors commonly rent cars to tour Australia's beautiful highways, national parks, and historical sites. This market is defined by short-term rentals, and clients frequently choose SUVs or economical cars to meet their travel requirements. As rental firms provide package offers and discounts catered to leisure tourists, partnerships with hotels, airlines, and travel agents further increase the demand.

The business category serves professionals and corporate clients that need dependable transportation for work-related events including conferences, meetings, and site visits. Executive and long-term rentals are in high demand in this segment as businesses value their workers' comfort and productivity. With the rise in business travel following the easing of pandemic restrictions, the segment has witnessed steady growth.

Analysis by End User:

• Self-Driven
• Chauffeur-Driven
   

Self-driven rentals constitute the majority of the car rental market in Australia, which attracts customers preferring independence and flexibility in traveling. Tourists, business travelers, and locals usually use self-driven rentals to visit places at their own pace without having to depend on others. This segment is driven by the wide range of vehicle choices, from economy cars to SUVs, catering to various travel needs and budgets. This convenience is further enhanced with features of real-time availability, with GPS-enabled vehicles.

Chauffeur-driven rentals are a niche segment and mainly cater to the clients consisting of business executives, luxury travelers, and event organizers. Mostly, these services are used for convenience and luxury so that the client is allowed time either to work or sleep while a professional deals with the transportation issues. This category comprises luxury sedans and SUVs, which are often associated with meet-and-greet services and multilingual drivers. Chauffeur-driven rentals are especially popular for airport transfers, weddings, and corporate events. Rental companies offer packages tailored to specific client requirements.

Regional Analysis:

• Australia Capital Territory & New South Wales
• Victoria & Tasmania 
• Queensland 
• Northern Territory & Southern Australia 
• Western Australia 
   

One of the most significant regions for car rental in Australia is the Australian Capital Territory (ACT) & New South Wales (NSW). This region is a prominent tourist and business hub with iconic landmarks such as the Sydney Opera House and Blue Mountains that attract a large number of both local and international tourists who use rented cars for convenience. Business travel is also an important factor, as Canberra, the national capital, hosts government-related activities. This region has well-developed road infrastructure and is close to popular destinations, making it a critical market for rental companies, offering diverse options from economy cars to luxury vehicles.

Victoria and Tasmania provide a strong car rental market given the tourism appeal of Melbourne and Tasmania's scenic landscapes. Melbourne is known as an arts and cultural hub. It is also a gateway destination for the Great Ocean Road and the Yarra Valley, ensuring constant car rental demand. Tasmania ensues a strong demand for road trips, national parks, and wilderness, making car rental a must for visitors around the island. SUV and self-driven options are in higher demand among tourists.

Due to its status as a top leisure destination with attractions including the Great Barrier Reef, Gold Coast, and Daintree Rainforest, Queensland has a thriving car rental industry. Both local and foreign vacationers have a strong demand for rentals in the area, especially during the busiest travel seasons. SUVs and other family-friendly cars are well-liked for traveling through national parks and along the coast. Brisbane is a major city in the region that attracts more business travelers. Car rentals are essential for efficient travel due to the state's vast geographic area and dispersed attractions, which guarantees the region's continued expansion.

Due to its untamed landscapes and distinctive cultural attractions, the Northern Territory and South Australia serve a minor but important portion of the car rental industry. In the Northern Territory, adventurous travelers frequently choose 4WD cars for off-road driving to places like Uluru, Kakadu National Park, and Alice Springs. The coastline and wine areas of South Australia create demand for luxury and leisure rentals. Because of the distances and terrain involved, long-term rentals and SUVs are very common in these areas, and rental firms provide customized vehicles to satisfy these needs.

Western Australia's enormous expanse and varied attractions, including the Pinnacles, Ningaloo Reef, and Margaret River, have contributed to the state's booming car rental industry. For both business and pleasure tourists, the capital of the area is a crucial starting place. Strong demand for SUVs and long-term rentals is driven by the state's isolated and off-the-beaten-path locations, especially among adventure seekers and foreign visitors. Rental providers often include specialized services like additional luggage racks and off-road capabilities to cater to the unique travel needs of this expansive region.

Competitive Landscape:

In order to stay competitive, major players in the market are concentrating on sustainability, technological innovation, and customer-centric services. Numerous businesses are adding electric and hybrid vehicles to their fleets in response to the growing demand from consumers for eco-friendly options. They are also using sophisticated digital platforms to ease the booking process, which allows customers to compare prices, choose vehicles, and complete transactions with ease. Moreover, companies have modified mobile applications with features like real-time tracking and personalized recommendations. Partnerships with travel and tourism platforms are also being reinforced in order to draw in both domestic and foreign tourists and efforts are also being focused on flexible rental options, such as car-sharing models and subscription plans to meet the varied needs and preferences of customers.

The report provides a comprehensive analysis of the competitive landscape in the Australia car rental market with detailed profiles of all major companies.

Latest News and Developments:

• In September 2024, the CARWIZ brand announced that they have brought their rental business to the online realm. CARWIZ's Australian website promises to transform the way Aussies approach car rentals by offering a fresh and streamlined experience. The website's allows customers to browse through available vehicles, choose rental periods, and make reservations with a few clicks.
• In June 2024, VroomVroomVroom unveiled that it has incorporated its market-leading car rental reservation website into the official site of Sydney Airport. Under this agreement, which officially came into effect on May 1, 2024, Sydney airport customers will be able to more easily search, compare and book competitively-priced rentals from a vast selection through the airport's website available both for Sydney Airport customers and for international locations.

Australia Car Rental Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the Australia car rental market from 2019-2033.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the Australia car rental market.
• Porter's Five Forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the Australia car rental industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.