Canada Car Rental Market Overview:
As per MRFR analysis, the Canada Car Rental Market Size was estimated at 4.65 (USD Billion) in 2023. The Canada Car Rental Market Industry is expected to grow from 5.33(USD Billion) in 2024 to 12.55 (USD Billion) by 2035. The Canada Car Rental Market CAGR (growth rate) is expected to be around 8.104% during the forecast period (2025 - 2035).
Key Canada Car Rental Market Trends Highlighted
The Canada car rental market is experiencing some notable trends influenced by various factors. One key market driver has been the increasing demand for mobility solutions in urban areas, leading to a rise in short-term rentals, particularly in major cities like Toronto, Vancouver, and Montreal. The growing trend toward sustainable travel has prompted car rental companies in Canada to expand their fleets to include electric and hybrid vehicles, catering to environmentally-conscious consumers.
Additionally, the strong recovery in tourism post-pandemic has spurred demand, with travelers seeking flexible transportation options during their visits to Canada’s diverse attractions, from the Rocky Mountains to national parks. Some business partnership opportunities to examine are between car rental businesses and ride-sharing services, as well as the use of mobile technology in scheduling and customer service. The increase in remote work has also created new possibilities for rental programs directed toward business executives with short-term travel or work assignments. Observations suggest that consumers in Canada are switching from renting cars the old-fashioned way to subscription-based rentals which offer much more convenience and no long-term commitment. In recent times, changes have been made in this industry as many rental businesses have gone digital and now offer online ordering along with contactless pick-up and drop-off, which is very appealing in today's safety-oriented environment.
Moreover, the growth of car-sharing services aligns with changing consumer preferences, especially among younger, tech-savvy demographics. As urban areas continue to expand and consumer behaviors shift, these trends are shaping the future landscape of the car rental market in Canada.

Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Canada Car Rental Market Drivers
Increasing Tourism and Travel Demand
The Canada Car Rental Market Industry is significantly driven by the increase in tourism and travel demand. The Tourism Industry Association of Canada reports that in 2019, Canada welcomed over 22 million international visitors, contributing approximately 105 billion Canadian dollars to the economy. Post-pandemic recovery strategies have also shown that the Canadian government aims to bolster its tourism sector, which is expected to grow further with the projected increase in travel following the easing of travel restrictions. As travelers seek convenient transportation options, car rental services will be in high demand. This growing influx of tourists not only stimulates the economy but also enhances the need for the Canada Car Rental Market Industry, which is poised to leverage this upward trend as travel resumes and expands.
Business Growth and Corporate Travel
With the resurgence of business activities in Canada, the demand for corporate travel is on the rise. A report from the Canadian Chamber of Commerce highlighted that 52% of businesses have resumed travel plans, reflecting a notable recovery in corporate activities. The need for convenient transportation for business professionals is driving the Canada Car Rental Market Industry growth as companies prefer renting vehicles to optimize travel budgets while ensuring flexibility. Furthermore, as remote work policies shift towards hybrid models, the demand for short-term rental options is increasing, spurring the growth of car rental services for corporate employees traveling for client meetings and conferences.
Sustainable Transportation and Environmental Initiatives
Environmental consciousness is a growing trend among Canadians, driving the Canada Car Rental Market Industry towards more sustainable practices. The Government of Canada has committed to reducing greenhouse gas emissions, setting a target to attain net-zero emissions by 2050. This has led the car rental industry to adopt eco-friendly vehicle fleets, with organizations like the Canadian Rental Vehicle Association promoting hybrid and electric vehicles. Statistics indicate that more than 25% of new vehicles sold in 2021 were environmentally friendly, showcasing a shift in consumer preferences towards sustainability. The growing demand for green transportation options is essential for the future of the Canada Car Rental Market Industry, aligning with national environmental goals.
Technological Advancements in Renting Processes
Technological advancements are revolutionizing the Canada Car Rental Market Industry, enhancing the customer experience and operational efficiency. With a report by Automotive News indicating that around 50% of consumers prefer to book vehicles through mobile apps or online platforms, car rental companies in Canada are investing heavily in technology. The development of user-friendly apps, enhanced online booking systems, and contactless rental procedures due to the COVID-19 pandemic have become critical in meeting consumer demands. Additionally, the integration of GPS tracking and vehicle-sharing platforms is making rentals more accessible, catering to diverse consumer needs, ultimately driving growth in the Canada Car Rental Market Industry.
Canada Car Rental Market Segment Insights:
Car Rental Market Booking Type Insights
The Booking Type segment of the Canada Car Rental Market reflects a crucial aspect of consumer behavior and market dynamics in the country. With an increasing trend towards digitalization, online booking has emerged as a particularly significant method for consumers to arrange their car rentals, owing to its convenience and efficiency. Customers now prefer the ability to browse available vehicles, compare prices, and secure reservations from the comfort of their homes or on the go, leading to a substantial shift towards this method.
Meanwhile, offline booking remains relevant, catering to demographic segments that favor traditional methods of renting cars, such as business travelers and older adults who may not be as comfortable with online transactions.This not only showcases the diverse preferences among Canadian consumers but also points to the importance of providing multiple booking options to meet varying needs. The ongoing improvements in internet infrastructure and smartphone penetration in Canada have reinforced the online booking trend, making it easier for customers to navigate the car rental process.
Aspects such as secure payment processing and enhanced user experience further contribute to the dominance of online bookings. Nonetheless, businesses that ignore the offline segment risk alienating certain customer bases.In summary, the Canada Car Rental Market's segmentation through Booking Type emphasizes the transition toward digital solutions while simultaneously acknowledging the enduring value of traditional booking methods, reflecting a diverse range of consumer preferences that drive the industry forward. The evolution of these channels is powered by technological advancements, changing consumer expectations, and the growing importance of flexibility in rental options, ultimately shaping the growth of the overall market.

Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Car Rental Market Duration Insights
The Canada Car Rental Market is increasingly characterized by its Duration segment, encompassing both Short Term and Long Term rental options. Short Term rentals are highly favored for their convenience and flexibility, catering to tourists and business travelers who often require vehicles for brief periods. This sector is particularly significant, as Canada is a prime destination for international visitors, leading to a robust demand for easily accessible transportation.
In contrast, Long Term rentals appeal to local residents and businesses looking for cost-effective solutions, especially amid urban areas with fluctuating vehicle ownership trends.The significance of Long Term rentals lies in their adaptability to meet the needs of customers seeking reliable vehicle options without the commitment of purchasing a car. As urban populations grow and travel infrastructure expands, both segments are expected to contribute to the evolving dynamics within the Canada Car Rental Market. The market growth in both areas reflects the changing preferences and needs of consumers, supported by economic trends that influence car usage across different demographics.
Car Rental Market Vehicle Type Insights
The Vehicle Type segment within the Canada Car Rental Market plays a crucial role in meeting diverse consumer needs. This market encompasses a variety of vehicle classes, including Luxury, Executive, Economy, SUVs, and Others, each catering to specific preferences and occasions. The Luxury segment is particularly significant, attracting affluent customers seeking premium experiences, while the Executive category appeals to business travelers requiring style and comfort.
Economy vehicles dominate due to their affordability, making them popular among budget-conscious renters. SUVs have gained traction for their versatility and spaciousness, accommodating families and outdoor enthusiasts alike. Other vehicles include specialized options that serve niche markets. Overall, the Canada Car Rental Market segmentation reflects broader consumer trends towards flexibility, convenience, and a growing preference for personalized travel experiences. With an increase in domestic travel and tourism within Canada, this diverse vehicle portfolio positions the market to capitalize on evolving lifestyle needs. Factors driving growth in this segment include advancements in technology, enhanced online booking options, and a focus on superior customer service.
Car Rental Market Application Insights
The Canada Car Rental Market revenue encompasses various applications, primarily focusing on Leisure/Tourism and Business. With Canada being a popular destination for global tourists, the leisure sector significantly contributes to the overall market growth. This segment sees a high demand during peak travel seasons, as tourists often prefer rental vehicles to explore Canada's vast landscapes and urban attractions, enhancing their travel experience. Additionally, the business segment plays a crucial role as well, driven by the increasing number of corporate travelers and the necessity for temporary transportation solutions during business trips.
The rise of remote work and hybrid models is propelling the demand for rental cars in this segment as companies seek flexibility to accommodate employee travel needs. Overall, the Canada Car Rental Market segmentation reflects a balanced interplay between leisure and business applications, each offering unique growth opportunities and presenting different challenges, such as balancing fleet availability and pricing strategies to cater to diverse customer requirements. Market growth in leisure and business-oriented applications is amplified by the growing trend of on-demand mobility solutions and partnerships with travel service providers.
Car Rental Market End User Insights
The End User segment of the Canada Car Rental Market is pivotal, given the diverse preferences among consumers and businesses. This segmentation primarily includes customer needs such as Self-Driven and Chauffeur-Driven services, each catering to different market demands and travel preferences. The Self-Driven service attracts individuals seeking independence and flexibility during their journeys, often favored by tourists and those exploring urban areas or rural landscapes in Canada.
In contrast, the Chauffeur-Driven service appeals to corporate clients and those requiring convenience, positioning itself as a preferred option for business travel and special occasions.The growing trend of urbanization and an increasing focus on convenience drive the demand for these services, as consumers gravitate towards options that enhance their travel experience. Additionally, the rise of ride-hailing apps and shifting consumer behavior have influenced the dynamics in the Car Rental Market, prompting companies to adapt and innovate within these segments. Overall, both segments represent significant opportunities for operators aiming to capture fresh consumer demographics in the evolving landscape of car rentals in Canada.
Canada Car Rental Market Key Players and Competitive Insights:
The Canada Car Rental Market is a dynamic and competitive landscape characterized by a diverse range of service offerings provided by various players. Companies operating in this sector continually innovate to meet the increasing demands of consumers who seek convenience, affordability, and enhanced mobility options. The market landscape is influenced by various factors, including changing travel patterns, an evolving customer base that prioritizes sustainability, and technological advancements that enhance the customer experience. Moreover, the competition between local and international players shapes the market, resulting in competitive pricing models, improved fleet management practices, and personalized customer services designed to attract and retain consumers across different demographics.
Green Motion stands out in the Canada Car Rental Market with its commitment to sustainability and eco-friendly practices. The company focuses on providing low-emission and hybrid vehicles, appealing to environmentally conscious consumers who are increasingly seeking alternatives to traditional car rental options. Green Motion has strategically positioned itself in key urban centers and popular travel destinations, catering to both leisure and business travelers. Its strengths lie in a comprehensive service offering that includes flexible rental terms, competitive pricing, and exceptional customer service, which enhance its brand reputation. The company also actively participates in local community initiatives that promote sustainability, thereby reinforcing its image as a socially responsible business in the Canadian car rental arena.
Thrifty Car Rental maintains a significant presence in the Canada Car Rental Market as part of a larger global network known for its diverse fleet and value-driven service offerings. Thrifty is particularly well-regarded for its affordability and wide selection of vehicles that cater to different customer needs, including economy cars and larger vehicles suitable for families and groups. The company emphasizes customer satisfaction and ease of reservation through its user-friendly online platform and mobile applications. In recent years, Thrifty has engaged in strategic partnerships and potential mergers that enhance its market presence while broadening its service capabilities. This adaptability allows Thrifty to thrive in a competitive environment, offering competitive rates and special promotions to attract both short-term and long-term renters, contributing to its robust standing within the Canadian car rental sector.
Key Companies in the Canada Car Rental Market Include:
- Green Motion
- Thrifty Car Rental
- Dollar Rent A Car
- Alamo Rent A Car
- RAC Canada
- UHaul
- Trafalgar Rentals
- Avis Budget Group
- Budget Rent A Car
- Sixt Rent A Car
- Enterprise Holdings
- Rentals.ca
- National Car Rental
- Hertz Global Holdings
Canada Car Rental Industry Developments
The Canada Car Rental Market has seen notable developments recently, particularly with key players like Enterprise Holdings, Avis Budget Group, and Hertz Global Holdings actively adapting to changing consumer trends and preferences. Growth in this sector has been stimulated by an increasing demand for eco-friendly vehicles, prompting companies such as Green Motion to expand their electric and hybrid options. The market is also witnessing changes in rental pricing structures as companies aim to remain competitive amid fluctuating travel patterns post-pandemic.
In June 2023, Alamo Rent A Car, and National Car Rental strengthened their offerings in Canada, enhancing customer experiences through technology-driven solutions, including mobile app reservations and digital check-ins. Notably, the car rental sector continues to evolve with more emphasis on sustainability, with fleets increasingly incorporating electric vehicles. Notable incidents from the last couple of years include U-Haul’s significant expansion in March 2022, where it opened multiple new locations across Canada, further solidifying its market presence. The overall market valuation has surged, reflecting the sector’s resilience and adaptability in an ever-changing economic landscape.
Canada Car Rental Market Segmentation Insights
- Car Rental MarketBooking TypeOutlook
- Online Booking
- Offline Booking
Car Rental MarketDurationOutlook
Car Rental MarketVehicle TypeOutlook
- Luxury
- Executive
- Economy
- SUV's
- Others
Car Rental MarketApplicationOutlook
Car Rental MarketEnd UserOutlook
- Self- Driven
- Chauffeur-Driven
Report Attribute/Metric Source: |
Details |
MARKET SIZE 2018 |
4.65 (USD Billion) |
MARKET SIZE 2024 |
5.33 (USD Billion) |
MARKET SIZE 2035 |
12.55 (USD Billion) |
COMPOUND ANNUAL GROWTH RATE (CAGR) |
8.104% (2025 - 2035) |
REPORT COVERAGE |
Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
BASE YEAR |
2024 |
MARKET FORECAST PERIOD |
2025 - 2035 |
HISTORICAL DATA |
2019 - 2024 |
MARKET FORECAST UNITS |
USD Billion |
KEY COMPANIES PROFILED |
Green Motion, Thrifty Car Rental, Dollar Rent A Car, Alamo Rent A Car, RAC Canada, UHaul, Trafalgar Rentals, Avis Budget Group, Budget Rent A Car, Sixt Rent A Car, Enterprise Holdings, Rentals.ca, National Car Rental, Hertz Global Holdings |
SEGMENTS COVERED |
Booking Type, Duration, Vehicle Type, Application, End User |
KEY MARKET OPPORTUNITIES |
Sustainable vehicle rentals, Urban mobility solutions, Technology integration in rentals, Expansion in leisure travel, Partnerships with local businesses |
KEY MARKET DYNAMICS |
growing tourism sector, increasing urbanization, rise of e-commerce, technological advancements, sustainability initiatives |
COUNTRIES COVERED |
Canada |
Frequently Asked Questions (FAQ) :
The Canada Car Rental Market is expected to be valued at 5.33 USD Billion in 2024.
By 2035, the market is projected to reach a valuation of 12.55 USD Billion.
The expected CAGR for the market during this period is 8.104%.
Major players in the market include Green Motion, Thrifty Car Rental, Dollar Rent A Car, and Avis Budget Group.
The online booking segment is valued at 3.19 USD Billion in 2024.
The offline booking segment is expected to reach 5.18 USD Billion by 2035.
The online booking segment is projected to be valued at 7.37 USD Billion in 2035.
Emerging trends and evolving consumer preferences present significant growth opportunities in the market.
Increased travel demand and a growing preference for car rentals over ownership are key growth drivers.
Regional factors, including urbanization and tourism, significantly influence the market's growth trajectory.