# I want to know how many car rentals are booked in the US each year and what % of them are refundable/changeable reservations.

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## I want to know how many car rentals are booked in the US each year and what % of them are refundable/changeable reservations.

The short version is that there's no pre-compiled data answering your request. However, various industry data, statistics, and case study result provided the information necessary to estimate the yearly car rentals in the US and what percentage of them are refundable/changeable reservations. Below you will find a deep dive of my research along with the necessary details and assumptions as to how I came to this answer.

### Methodology/Calculations

The first port of call was to know the number of car rentals per year. This figure wasn't readily available. To provide you an estimate, I had to examine how many cars are in the rental fleet as well as how many days each car is rented for on the average. This, of course, is premised on the assumptions that cars are rented out on a continuous basis without any breaks in between either for maintenance or for lack of hire.

### Total car rentals per year

The number of cars available for rentals in the US is 2,313,027 found pre-compiled. To estimate the total number of rentals per year, I had to gauge how often these cars are rented in a year. In the US, each car rental lasts for approximately 11.5 days on the average. Going by the aforementioned stat, one can calculate the number of times a car can be rented in a year. To do this, I divided the number of days in a year by the number of days each rental lasts for.

### 365/11.5 = 32 days

This means each vehicle in the US can be rented 32 times. If each car can be rented 32 times in a year, then the potential number of rentals in a year can be calculated by multiplying the available cars by the number of times they can be rented.

### 32 * 2,313,027 = 74,016,864 POTENTIAL CAR Rentals RESERVATIONS per year

Approximately 74 million potential rentals per year. For this number to stand, then it would mean that asides the first assumption of continuous car rentals, that every one who books also shows up for their booking. However, a quick search shows that in the US, 30% of all bookings are a no-show. So, if there are a possible 74 million rentals per year and 30% don't show up, then the eventual rental reservation estimation is 74 million less 30% of 74 million.

### Percentage of reservations changeable/refundable

After calculating by estimation the number of car rentals reservation per year, the next line of action was to calculate what percentage of this figure is changeable/refundable. Again this data is not readily available. However, different pointers can help us estimate a similar figure, how many cars are prepaid versus postpaid. The biggest assumption here is that post-paid rental services are usual liable for refunds. That said the first thing here was to identify what percentage of the total fleet in the US were eligible for prepaid services. Findings show that four major car agencies don't offer prepaid services at all; these are Alamo, Dollar, Enterprise, and National car rental agencies. The number of cars in their fleet all together is 1,293,027. This translates to 56% of all US car rental fleet ineligible for prepaid services at all as calculated below:

### (1,293,027/2,313,027)*100 = 56%

If 56% are ineligible for prepaid services, then 44% are eligible for prepaid services (100% - 56%). The total number of prepaid car rentals per year is then 44% of 51.8 million car rentals per year (0.44 * 51.8 = 22.8). This gives us 22.8 million cars are eligible to be rented with prepaid services.

The next thing is to identify the percentage of this figure that ends up as actual bookings. Although there are no industry-wide data on this, I used the result of a case study as a benchmark. This study reported that prepaid services were 6% of total bookings. Using this figure, we can estimate the number of the available prepaid rental services eventually got booked as shown below:

### Percentage of bookings that are prepaid * number of cars eligible for prepaid services = 6% * 22.8 = 1.37 million prepaid rentals per year

This means of the 51.8 million car rentals per year, only 1.37 million cars are prepaid. This means the number of postpaid rentals is:
51.8 million - 1.37 million = 50.43 million cars.

### (50.43/51.8)*100 = 97.4%

This means to an extent 97% of all car rentals in the US are somewhat refundable or changeable, based on the above triangulations. While this isn't a perfect measure, it was the best available after thorough deep-dive research and triangulation using back of the envelope calculations.

Finally, the number of car rentals per year in the US and the percentage refundable has been calculated as shown above using available industry data.

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