About one in four US vehicle transactions are leases. The country’s car fleet leasing market is projected to be worth $149 million by 2025, growing at 1% CAGR from 2021, market research from Technavio reveals.
The spoils of this industry growth rate are being shared widely with Technavio’s analysis also shining a spotlight on a fragmented – and still fragmenting – market. Vehicle leasing removes much hassle from vehicle ownership.
Road tax, breakdown cover and servicing are included for the full length of the contract, while organizations are also spared the downsides of fleet management, such as unpredictable repair and maintenance costs.
Automotive leasing offers lower prices for the latest models too. The fact that the vehicle must be returned at the end of the contract is not a problem either, as new vehicles rapidly shed value.
Franchise industry trends
Automotive franchisees benefit from training, support, bespoke computer systems and the buying power of major national or global brands.
They often take up their role with little to no prior experience in the automotive sector, although a sales or financial services background often strengthens applications.
BusinessesForSale.com is not aware of any pure play vehicle leasing companies selling franchises within the US.
However, two franchised giants of the auto hire world, Hertz and Sixt, offer a ‘car subscription’ service that is like leasing, insofar as a monthly payment gets them a vehicle of their choice with everything they need included.
However, customers can switch model or exit the arrangement at the end of each month, whereas a lease generally commits them to contracts lasting 2-4 years.
Another leasing-adjacent franchise is Fleet Services International (FSI), an on-site fleet maintenance and repair business which, says the franchisor, potentially generates franchisees first-year earnings of $100,000.