Is Budget allowed to seek compensation based on any turnback amount when a vehicle is totaled or stolen?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
cline LDW and the rental car is damaged or stolen, we may charge you between $x and $y (specify range of dollar amounts Budget may seek) more than the cost of repairs or the fair market value of the vehicle. Many insurance companies will not pay this. If yours does not, you will have to pay it. The sign or placard shall be of a size, and posted in a manner, reasonably calculated to elicit prospective renters' attention.
C. Failing to disclose in a clear and prominent manner in any communication seeking payment of any charge for loss of or damage to a rental vehicle, any part of the charge that is attributable to loss of turnback including, but not limited to, instances where the vehicle is totaled or stolen and respondent is seeking compensation based in whole or part on any turnback amount. This disclosure shall include an explanation of what loss of turnback means and how it was calculated.
II.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, Budget is permitted to seek compensation based on turnback amounts, even when a vehicle is totaled or stolen. However, Budget must adhere to specific disclosure requirements.
Budget is required to disclose clearly and prominently in any communication seeking payment for loss or damage to a rental vehicle any part of the charge that is attributable to loss of turnback. This includes instances where the vehicle is totaled or stolen and Budget is seeking compensation based in whole or part on any turnback amount. The disclosure must include an explanation of what loss of turnback means and how it was calculated.
Furthermore, Budget must post a sign at each rental location with specific language. The sign must state that if a renter declines the Loss Damage Waiver (LDW) and the rental car is damaged or stolen, Budget may charge the renter between $x and $y more than the cost of repairs or the fair market value of the vehicle. The sign must also state that many insurance companies will not pay this charge, and the renter will be responsible for it.
These regulations and disclosures aim to ensure that renters are fully aware of their potential liabilities and the charges they may incur if they decline LDW and the rental vehicle is damaged or stolen. Franchisees should be aware of these requirements and ensure full compliance to avoid potential penalties.