Saudi Arabia Automotive Leasing Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2025 - 2030)

Saudi Arabia Automotive Leasing Market Size

Saudi Arabia Automotive Leasing Market Trends and Growth Drivers

Car Subscription Services Are a Major Trend

Car subscription services are becoming rapidly popular among younger, tech-savvy consumers. They are an alternative to the conventional system of leasing and ownership, providing access to vehicles for short periods and enabling users to change models without long-term commitments.

Car subscription services appeal with their higher convenience and comfort compared to the rigid, multi-year leases. With subscriptions, a user can have a car for a month or a shorter period, as per requirement. For instance, a person who needs a family SUV sometimes, but a compact vehicle for daily usage would find subscription cost-efficient.

Moreover, these services appeal to avid users of smartphone apps. Most subscription services are available over online platforms, allowing users to browse vehicles, compare plans and sign agreements, manage subscriptions, and select delivery and pickup locations. This way, in contrast to leasing or buying from the traditional marketplace, this procedure is less complicated.

Government Initiatives under Vision 2030 Drive Market

Saudi Vision 2030 aims at the transformation of the economy by reducing the dependence on oil revenues and creating higher growth opportunities in other sectors. This initiative has created an environment conducive for the private sector's expansion, bringing in immigrants and encouraging office space development in new areas.

As part of the vision, transportation networks, buildings, roads, and other pieces of public infrastructure are being constructed, which has increased the demand for vehicles. Leasing is preferred by the associated businesses as it offers financial flexibility by giving them access to fleets without the need for the high capital incurred when purchasing vehicles. Most car rental firms also provide customers with updated models for a more-personalized experience.

SMEs are also addressed in Vision 2030 as an important part of the country’s economic landscape. The higher funding and favorable policies are helping SMEs carry out business operations more easily. Leasing is a wiser transportation solution for them as it saves them from hefty spending, gives access to newer technology-based vehicles, optimizes their operational expenses, and improves scalability.

More importantly, the vision promotes sustainability and technological progress, which increases the adoption of green and electric vehicles in rental fleets. The reforms executed by the Saudi Arabian Monetary Authority ensure transparency and consumer protection, thus enhancing the credibility of the leasing industry.

Additionally, under Saudi Vision 2030, the government has made efforts to include women in different sectors. This has resulted in more female professionals requiring convenient modes of transportation. Leasing caters to their needs with easy access to a vehicle, without necessitating long-term maintenance and eliminating the concerns over depreciation.

Expanding Popularity of EVs Provides Opportunity for Market Growth

This growth in EV adoption in Saudi Arabia aligns with the sustainability goals of the nation outlined Vision 2030. In an attempt to address the growing environmental concerns, the government is focusing on green energy and diminishing carbon release. This is making EVs favorable in the private and public sectors, thus presenting opportunities for market players. Clean Mobility Saudi Arabia has announced plans to have 30% EVs in its fleet in Riyadh by 2030, aligning with the government’s pledge to achieve carbon neutrality by 2060.

Leasing EVs mitigates the high upfront costs associated with purchasing, thus making electric mobility more accessible to consumers and businesses. This approach also offers a smooth transition to green, environment-friendly technologies to big corporations with large fleet requirements, without the burden of high purchase costs.

Moreover, to augment the infrastructure needed for EVs, public entities are setting up charging stations and offering incentives for green technology adoption. This opens opportunities for leasing companies to attract a new client base interested in environmentally responsible options, by enabling them to upgrade to newer vehicle models at a lower cost.

Saudi Arabia Automotive Leasing Market Analysis

Vehicle Type Analysis

• The passenger category holds the larger revenue share in 2024, and it is expected to maintain its position during the forecast period.
• The decision to allow women to drive in 2018 has expanded the customer base, and many of them prefer leasing over other options, for risk reduction.
• Leasing also provides the flexibility to expatriates and locals who require short-to-mid-term transportation solutions without long-term ownership commitments.
• The rise in passenger car leasing is also due to the increase in the adoption of ride-hailing and carsharing services, provided by companies such as Uber and Careem. People involved in these services often lease passenger vehicles as a means of generating income.
• Commercial is the faster-growing category, with a CAGR of 12.2% during the forecast period.
• As part of the initiatives to diversify the economy, investments in various non-oil sectors, such as logistics, infrastructure, and construction, propel the demand for commercial vehicles.
• The players also keep their fleet of vehicles upgraded as per the recent technological advancements and altering preferences.
• Several players offer value-added services, such as servicing & maintenance, thus taking this burden off the shoulders of businesses and also helping them save on expenses.

The vehicle types analyzed here are:

• Passenger (Larger Category)
• Commercial (Faster-Growing Category)

Leasing Type Analysis

• The operating category is expected to account for the higher revenue, of USD 670.2 million, in 2030.
• Operating leases attract lessees due to their flexibility, primarily because they entail no vehicle owning obligation.
• This model is feasible for business and personal use among the huge expatriate population and the large number of transient residents, who prefer arrangements for a fixed duration.
• Additionally, an operating lease usually includes maintenance, insurance, and servicing. Such multiple services in the package guarantee reliability for businesses that depend on a well-maintained fleet.
• The financial category is the faster-growing in the Saudi Arabian automotive leasing market.
• With financial leasing, the ownership of the vehicle is transferred to the user at the end of the lease term. This becomes appealing to companies willing to incur the cost to establish an asset base without a major investment of capital.
• Through financial leasing, a company can distribute the expenses associated with acquiring the vehicles over time, hence improving cash flow and avoiding ill-planned budgeting.

The following leasing types have been evaluated:

• Operating (Larger Category)
• Financial (Faster-Growing Category)

Lease Duration Analysis

• The short-term bifurcation dominates the market in 2024.
• The large expatriate population living in Saudi Arabia for trade and business for a limited period prefers short-time leasing, which offers flexibility without the complications of owning a vehicle.
• As per an article in Argaam, the number of expatriates employed in Saudi Arabia reached 10.9 million, accounting for 75% of the total workers in the country in the third quarter of 2022.
• The long-term category is the faster-growing in the market, with an expected CAGR of 11.9% over this decade.
• Long-term leases are preferred by many companies as they allow them to maintain a consistent and reliable lineup of vehicles without purchasing them. This model is predominantly relevant in industries such as logistics, construction, and services, where employees need to be constantly or continuously on the move.
• Long-term leases are more beneficial and have better prices compared to short-term permits. These contracts also often feature predictable monthly payments and lower maintenance costs.

The lease durations analyzed here are as follows:

• Short-Term (Larger Category)
• Long-Term (Faster-Growing Category)

End User Analysis

• The individual category has the higher value in the market, of USD 361.4 million, in 2024.
• The surge in the population of Saudi Arabia, especially in urban centers, such as Riyadh, Jeddah, and Dammam, is leading to an increasing demand for personal mobility.
• People prefer leasing nowadays because they wish to have vehicles without being bothered about their depreciation or purchase cost.
• Citizens are also drawn to rental firms that have new models in their fleets to utilize evolving technologies.
• The corporate category is the faster-growing in the market.
• Corporations are leasing automobiles for cost-effective transportation without paying high prices for purchasing the vehicles.
• Automotive rental companies also provide insurance and maintenance benefits, which ensure operational smoothness.
• Companies are increasingly adopting greener practices; leasing allows them access to newer, environment-friendly vehicles without long-term commitments.

The end users analyzed here are:

• Corporate (Faster-Growing Category)
• Individual (Larger Category)

Service Provider Analysis

• Car rental companies lead the market owing to their established brand recognition and strong presence.
• Over the years, they have built familiarity and credibility by facilitating reliable and convenient services. They also have vast networks across key cities, which makes them more accessible for locals and tourists.
• Dedicated leasing firms are the faster-growing category, at a CAGR of 11.4% during the forecast period.
• Major sectors, including logistics, oil & gas, and construction, seek cost-effective substitutes over buying vehicles.
• Dedicated leasing firms help them avert the heavy initial expenditures and cover the maintenance expenses as well.

The service providers evaluated here are:

• Car Rental Companies (Larger Category)
• Dedicated Leasing Firms (Faster-Growing Category)

Regional Analysis

Al-Riyadh dominates the Saudi Arabian automotive leasing market, and it is also the fastest-growing market for rented vehicles in the kingdom. It is the capital and largest city in Saudi Arabia and serves as an economic hub, accommodating most of the multinational companies and government ministries. This high concentration of users drives the demand for corporate vehicle leasing as they need efficient transportation for employees.

Most firms opt for leasing to enjoy fleet flexibility, upgrade their vehicles often, and minimize capital spending. Al-Riyadh boasts a high urbanization rate, which heightens the demand for personal transport. Many individuals, both expatriates and locals, prefer renting cars because it is flexible when viewed from a financial perspective.

The growth of residential and commercial areas within and around Riyadh continues to fuel the demand for personal mobility, in turn, driving the growth of the automotive leasing market.

These provinces have been studied in the report

• Al-Riyadh (Larger and Faster-Growing Province)
• Makkah
• Al-Madinah
• Al-Qaseem
• Eastern Region
• Aseer
• Tabouk
• Hayel
• Northern Border
• Jazan
• Najran
• Al-Baha
• Al-Jouf

Saudi Arabia Automotive Leasing Market Share

The automotive leasing market in Saudi Arabia is fragmented in nature. It is home to diverse players, such as dedicated leasing firms, car rental companies, and financial institutions. Each of them offers different leasing packages for long and short durations, depending on the requirement.

Customers are also diverse and consist of corporate clients, residents, and expatriates. Further, the lower barriers to entry allow new entrants into the market, further diversifying the landscape. Government initiatives and regulatory policies further contribute to the competitive landscape.

Saudi Arabia Automotive Leasing Market News

• In June 2024, Theeb opened its new branch in Abha City in the Al-Masif neighborhood, to strengthen its presence and cater to more customers with short- and long-term vehicle leases.
• In April 2024, Theeb Rent a Car Co. announced the inauguration of its new branch in Al-Aarid, Riyadh.
• In April 2024, Budget Saudi renewed its Budget & Payless Franchise agreement for 10 years until 2033.
• In October 2023, Budget Saudi entered into a strategic agreement with Electromin to build EV charging infrastructure at its facilities.