How is the book value of a vehicle determined for Budget, including depreciation?

According to Budget's 2025 Franchise Disclosure Document, the book value of a vehicle is based on the Owning City's actual cost, which includes any rebates and taxes. From this cost, Budget deducts 2.083% depreciation per month from the date of purchase to determine the book value.

This calculation is important in several scenarios outlined in the FDD. For example, if a vehicle is damaged beyond repair due to a violation of Intercity procedures, the Receiving City, Custodial City, or Renting City will purchase the vehicle from the Owning City at its book value as of the date of the damage. Similarly, if a vehicle is converted due to improper renter qualification and not recovered after 60 days, the Renting City will purchase the vehicle from the Owning City at its book value as of the rental commencement date.

Furthermore, an operator's liability for a non-owned vehicle is limited to the Owning City's book value, net of any recovery monies from salvage, LDW collection, insurance, or subrogation. This ensures that the liability is capped at the depreciated value of the vehicle, taking into account any recovered funds. The Custodial City is also responsible for paying the Owning City the book value of a vehicle stolen from the Custodial City's lot if it is not recovered within 60 days.

Understanding how Budget calculates book value is crucial for franchisees, as it directly impacts financial responsibilities in cases of damage, theft, or conversion of vehicles. Franchisees should ensure they understand these procedures and maintain accurate records to reconcile vehicle costs and depreciation.