India Car Leasing Market

India Car Leasing Market Overview:

The India car leasing market size reached USD 20.50 Billion in 2024. Looking forward, IMARC Group expects the market to reach USD 32.55 Billion by 2033, exhibiting a growth rate (CAGR) of 5.27% during 2025-2033. India’s car leasing market is expanding due to rising corporate adoption, rental fleet growth, and tax incentives. Businesses prefer leasing for cost-effective mobility, while employer-sponsored tax benefits drive demand. Increasing flexibility, reduced ownership costs, and enhanced vehicle availability are shaping the market’s long-term growth.

India Car Leasing Market Trends:

Expansion of Corporate and Rental Fleets

The growing demand for mobility solutions is driving the expansion of corporate and rental fleets in India’s car leasing sector. Companies are increasingly opting for leased vehicles to ensure operational efficiency, cost savings, and convenience for employees and business travelers. Leasing offers businesses the advantage of fleet upgrades without high upfront costs, making it an attractive alternative to ownership. The demand for corporate and rental fleets has risen due to the increasing preference for hassle-free transportation solutions. In February 2023, MG Motor India contributed to this trend by delivering 108 Hector SUVs to Orix India for its Rent-a-Car division. This large-scale fleet expansion strengthened leasing services, improving vehicle availability for corporate travelers and boosting India’s rental market. Orix India, as one of the largest leasing and rental service providers, enhanced its offerings, catering to business professionals and frequent travelers. As more corporations and mobility service providers expand their leased fleets, leasing is emerging as a viable alternative to vehicle ownership. The availability of modern, well-maintained vehicles encourages businesses to invest in rental solutions rather than purchasing large fleets. This trend will continue shaping the Indian car leasing market, driving its growth and positioning leasing as a preferred mobility option across industries.

Tax Incentives Promoting Commercial Leasing

The introduction of favorable tax policies has significantly influenced the growth of India’s car leasing market. With businesses seeking cost-effective mobility solutions, employer-sponsored car leasing is gaining traction due to financial advantages and tax benefits. Moreover, companies and employees can reduce their taxable income, by structuring lease payments as pre-tax deductions, thereby making leasing a financially attractive option. This approach helps organizations offer vehicle benefits without additional financial strain, encouraging widespread adoption. In June 2024, India introduced income tax benefits for employer-sponsored car leases, further strengthening this market trend. The policy allows companies to deduct lease rental amounts from employees’ pre-tax salaries, reducing overall taxable income. This incentive not only benefits employees by lowering their tax liability but also makes leasing more affordable compared to traditional vehicle financing. As a result, corporate leasing has become a preferred option for both employers and employees. With leasing becoming a more financially viable alternative, companies are incorporating car lease policies into their employee benefits programs. The affordability and convenience of leasing, combined with tax advantages, are encouraging businesses to shift from car ownership to flexible leasing models.

India Car Leasing Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the region/country level for 2025-2033. Our report has categorized the market based on type, lease type, service provider type, and tenure.

Type Insights:

• Private Lease
• Business Lease

The report has provided a detailed breakup and analysis of the market based on the type. This includes private lease, business lease.

Lease Type Insights:

• Close Ended Lease
• Option to Buy Lease
• Sub-Vented Lease
• Others

The report has provided a detailed breakup and analysis of the market based on the lease type. This includes close ended lease, option to buy lease, sub-vented lease, and others.

Service Provider Type Insights:

• Original Equipment Manufacturer (OEM)
• Bank Affiliated
• Nonbank Financial Companies (NBFCs)

A detailed breakup and analysis of the market based on the service provider type have also been provided in the report. This includes original equipment manufacturer (OEM), bank affiliated, and nonbank financial companies (NBFCs).

Tenure Insights:

• Short-Term
• Long-Term

A detailed breakup and analysis of the market based on the tenure have also been provided in the report. This includes short-term and long-term.

Region Insights:

• North India
• South India
• East India
• West India

The report has also provided a comprehensive analysis of all the major regional markets, which include North India, South India, East India, and West India.

Competitive Landscape:

The market research report has also provided a comprehensive analysis of the competitive landscape. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided.

India Car Leasing Market News:

• January 2025: Maruti Suzuki introduced a short-term leasing program for petrol and hybrid cars, easing EV adoption concerns. This initiative supports flexible mobility, enhances customer confidence in EVs, and strengthens India’s car leasing sector by integrating hybrid and conventional vehicle options into leasing services.
• May 2024: Kia India partnered with Orix to launch Kia Lease, offering flexible leasing options across six cities for Sonet, Seltos, and Carens. This initiative enhances accessibility, with monthly payments starting at INR 21, 990, thereby fueling India’s growing car leasing industry, projected to double in 4-5 years.

India Car Leasing Market Report Coverage:

Key Questions Answered in This Report:

• How has the India car leasing market performed so far and how will it perform in the coming years?
• What is the breakup of the India car leasing market on the basis of type?
• What is the breakup of the India car leasing market on the basis of lease type?
• What is the breakup of the India car leasing market on the basis of service provider type?
• What is the breakup of the India car leasing market on the basis of tenure?
• What are the various stages in the value chain of the India car leasing market? 
• What are the key driving factors and challenges in the India car leasing market?
• What is the structure of the India car leasing market and who are the key players?
• What is the degree of competition in the India car leasing market? 

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the India car leasing market from 2019-2033.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the India car leasing market.
• Porter's five forces analysis assist 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 India car leasing 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.