Despite a travel market wobbling under global uncertainty, car rental is holding the line—and, in some cases, charging ahead on electric wheels. That’s the headline from CarTrawler’s just-released Q2 2025 Car Rental Market Monitor, a deep dive into what’s moving (and stalling) in the vehicle hire landscape. And suppose anyone thought car rental was simply about wheels and keys. In that case, they haven’t met the new-age traveller, who demands mobility, flexibility, electrification, and tap-to-pay simplicity.
The Dublin-based B2B mobility powerhouse has crunched the numbers and surfaced a truth as old as the open road: travellers may zig or zag, but the car remains king.
Americans Hit the Brakes While Europe Gears Up
According to CarTrawler’s Q2 analysis, inbound travel to the U.S. is down by a worrying 10% as Americans pull back on overseas summer spending and opt for the humble (but ever-reliable) road trip. Deloitte data confirms that budgets are tightening—and when the purse strings pull taut, the RV and rental sedan are there to save the day.
Contrast this with Europe, where sunshine holidays drive demand for car hire, particularly in the Med, where winding coastlines and countryside châteaux remain perennial favourites.
What is the average price for a five-day July rental booked between January and June 2025? In the U.S., it’s slid to US$531—a decline of 8% year-on-year. Meanwhile, European markets have held steady, even nudging up 1% to €264.
“Car rental holds steady despite macroeconomic uncertainty,” said CarTrawler’s Chief Revenue Officer Gavin Sweeney. “Domestic road trips in the U.S. and strong demand for sun destinations across Europe are maintaining the global car rental market’s momentum.”
Sweeney’s optimism isn’t just bluster—it’s backed by hard figures and fleet activity that suggest the car hire sector may be more resilient than many of its travel counterparts.
Electric Vehicles Cruise Into the Mainstream
One area where the pedal is well and truly to the metal is the adoption of electric vehicles (EVS). In North America, EVs now account for 5% of all rentals—modest, yes, but growing. Tesla continues to dominate this space, cornering 59% of all EV and hybrid rentals across the U.S. and Canada. Elon, it seems, still owns the carpark.
Europe and the UK, meanwhile, are singing from a more diversified hymn sheet. Brands like Toyota, Kia, Renault, Polestar, and Cupra are muscling into the EV hire fleet, each holding a respectable double-digit share of the pie. And with Chinese titans like BYD and XPENG quietly flooding the global market, we can expect rental counters from Lisbon to Ljubljana to increasingly whisper sweet electric nothings into the ears of eco-conscious drivers.
But it’s not just the wheels changing— how we pay to rent them.
Digital Wallets Take the Wheel
While Americans still cling to their credit cards like lifejackets on a sinking ship, Europe is embracing payment innovation with the gusto of a backpacker discovering contactless for the first time. The Monitor reveals Apple Pay is responsible for 4.5% of all EU transactions, with Klarna’s BNPL model clocking in at 2% and Google Pay squeaking in at 0.4%. In the UK, Apple Pay surged ahead to capture over 10% of all June bookings—proof positive that mobile wallets are no longer just for café lattes.
These shifts aren’t cosmetic. They reflect deeper consumer preferences for immediacy, choice, and tech-enabled simplicity. As Sweeney put it, “Traveller behaviours are evolving—toward electric vehicles and flexible payment options. Car rental continues to offer both adaptability and opportunity for travel brands looking to stay relevant and drive ancillary growth.”
Loyalty Drives Repeat Rentals
Beyond the glamour of electric Teslas and tap-to-go payments, loyalty programs continue to make their mark. CarTrawler’s data shows a rise in rentals linked to frequent flyer and rewards schemes—a quiet revolution in a corner of travel once dominated by impulse bookings and anonymous counters.
These programs don’t just boost bookings—they deepen customer stickiness. Integrating car rental into loyalty ecosystems is proving a shrewd play for OTAs, airlines, and travel brands. The summer traveller wants convenience, and nothing screams seamless like booking your car hire while chasing your Platinum status.
Sun-Soaked Spots and Strategic Stops
Among the most in-demand destinations? The usual suspects shine—think Spain’s coastal resorts, Italy’s vineyard-laced backroads, and the islands of Greece. These regions see strong intra-European travel, with locals and visitors alike hiring wheels to seek sun, serenity, or simply the thrill of overtaking a tractor on a country lane.
And while the U.S. battles its inbound tourism blues, domestic travel keeps the lights on. Americans are proving that Pismo Beach is excellent, while Paris may be postponed.
Final Word: Steering Through Uncertainty
The CarTrawler Q2 Car Rental Market Monitor paints a picture of resilience in motion. While the broader travel industry grapples with inflation, geopolitical tensions, and post-pandemic recalibrations, car rental is showing how a sector steeped in tradition can still innovate and adapt. EVs, digital wallets, loyalty hooks—all signs of an industry unafraid to get its hands dirty, change its tyres, and keep motoring forward.
For more details, visit the official CarTrawler website: www.cartrawler.com.
By Christine Nguyen
