How does Budget define 'Fair market value' for its vehicles?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
For purposes of this order:
- A. "Turnback" means any preset price, premium, bonus, or formula that could result in respondent receiving more than the vehicle's fair market value upon repurchase by the vehicle's original vender, financer, or their designee.
- B. "Fair market value" means the vehicle's price as listed in an industry-wide and generally accepted publication or directory of used car values, or the resale price received in a commercially reasonable sale.
- C. "LDW" means any option that respondent offers that limits or eliminates a renter's liability to respondent for loss of or damage to the respondent's vehicle during the pendency of the rental agreement.
- D. "Insurance" means the renter's own standard vehicle insurance, and any alternative, supplemental, or secondary coverage the renter possesses that provides coverage for rented vehicles including, but not limited to, the coverage currently furnished by many credit card companies.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, 'fair market value' is defined as the vehicle's price as listed in an industry-wide and generally accepted publication or directory of used car values, or the resale price received in a commercially reasonable sale. This definition is important in the context of potential charges to renters for loss or damage to a vehicle.
Specifically, if a renter declines the Loss Damage Waiver (LDW) and the rental car is damaged or stolen, Budget may charge the renter more than the cost of repairs or the fair market value of the vehicle. The disclosure regarding potential charges above the fair market value is required to be clear and prominent in Budget's rental contracts and at each rental location.
This definition and the related disclosures are mandated by an order from the Federal Trade Commission (FTC), indicating a regulatory focus on transparency in vehicle rental agreements and charges. Prospective franchisees should be aware of these requirements and ensure full compliance to avoid potential legal issues and maintain customer trust.