Ministers are concerned about the authorities’ ability to stop vehicle attacks like those seen in Spain this week and recently in Britain, France and Germany.
One option could see rental companies share drivers’ data with the Government so it could be checked against a terror watch list before a vehicle is released for hire.
Toby Poston, director of external relations at the British Vehicle Rental and Leasing Association (BVRLA), told the Sunday Telegraph: “The industry is looking at ways to share data with the authorities in as real time as possible so it can be cross-referenced with counter-terrorism watch lists.”
A Government spokeswoman confirmed that the Department for Transport is working with the police and the vehicle rental industry to look at tightening up regulations.
“The threat from terrorism is changing and so must our response,” she said.
“That is why we are reviewing our counter-terrorism strategy and powers and why we have ploughed extra resources into counter-terrorism.
“The Department for Transport is also working with the police and the vehicle rental industry to explore what more can be done to prevent the malicious use of hire vehicles.
“This includes looking at what more rental companies could do before an individual can hire a vehicle.”
The potential for large vehicles to inflict mass casualties was laid bare in horrifying fashion in July last year when a lorry drove through crowds gathered to celebrate Bastille Day in Nice, killing 86 people and injuring scores of others.
Then in December 2016, an attacker drove a lorry into a crowded Christmas market in central Berlin, killing 12 people.
This year in the UK, vehicles have been at the centre of attacks on Westminster, London Bridge and Finsbury Park.
The incidents sparked suggestions van rental could be subject to more stringent checks, while officers appealed for vehicle hire and haulage firms with suspicions about rental attempts to come forward.
Khuram Butt, the ringleader of the London Bridge terror gang, had attempted to hire a 7.5-tonne lorry hours before the attack.
However, his payment method failed so he resorted to “plan B” and rented a white van which ploughed into pedestrians as the perpetrators launched their deadly rampage in June.
UK authorities have also been looking closely at physical security measures.
Earlier this year, police announced plans to step up the use of the National Barrier Asset - a collection of temporary equipment including security fences and gates - to protect crowded events.
Scotland Yard reviewed the security of 33 bridges around the capital and a number were fitted with barriers designed for “hostile vehicle mitigation”.
Guidance for armed police has also been tweaked.
Previously, firearms officers had the option of shooting at a moving vehicle, but this was discouraged as it was felt it could increase the risk to the public.
But the guidance has been revised so that firing at a car, van or lorry when it is on the move is an accepted tactic for incidents such as those seen in Nice and Westminster.
Containing the threat posed by “low-tech” attack methods such as the use of knives or vehicles is one of the major challenges for security services as they attempt to stop.