In assessing the reasonableness of Budget's estimated residual values of risk vehicles, what data sources were used to develop an independent expectation of residual values?

According to Budget's 2025 Franchise Disclosure Document, the audit procedures to assess the reasonableness of estimated residual values for risk vehicles involved developing an independent expectation of these values. This independent expectation was calculated using professional judgment with reference to third-party data, information produced by Budget, subsequent vehicle sales, and inquiries of management.

This indicates that the auditors did not solely rely on Budget's internal data or assumptions. Instead, they cross-referenced these with external sources to form their own opinion on the residual values. For a prospective franchisee, this suggests that Budget's financial statements have been rigorously vetted using industry benchmarks and external data.

The use of third-party data is a common practice in auditing to ensure objectivity and reliability. The fact that the auditors also considered subsequent vehicle sales provides a real-world check on the estimated residual values. Inquiries of management allow the auditors to understand the assumptions and judgments made by Budget in determining these values.

Overall, this process aims to provide a more accurate and reliable assessment of Budget's financial position, particularly concerning the value of its vehicle fleet. Franchisees can take comfort in knowing that these values are not simply based on internal estimates but are also supported by external data and expert judgment.