What must Budget disclose in any communication seeking payment for vehicle damage related to loss of turnback?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, in any communication seeking payment for charges related to loss or damage to a rental vehicle, Budget must clearly and prominently disclose any portion of the charge that is due to loss of turnback. This includes situations where the vehicle is totaled or stolen and Budget is seeking compensation based on any turnback amount. The disclosure must explain what "loss of turnback" means and how it was calculated. Turnback is defined as any preset price, premium, bonus, or formula that could result in Budget receiving more than the vehicle's fair market value upon repurchase by the vehicle's original vendor, financer, or their designee. Fair market value is 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 requirement ensures that renters are fully informed about the charges they are being asked to pay, particularly regarding the often misunderstood concept of "loss of turnback." By providing a clear explanation and calculation, Budget aims to avoid misrepresenting the renter's obligation or the value of the damaged vehicle. This disclosure helps renters understand why they are being charged a particular amount and allows them to assess the fairness of the charge.
For a prospective Budget franchisee, this means implementing procedures to accurately calculate and clearly communicate loss of turnback charges to customers. Failure to comply with this disclosure requirement could lead to legal issues and damage the franchisee's reputation. Franchisees should ensure that their staff is properly trained to explain loss of turnback and its calculation to customers in a transparent and understandable manner. Franchisees should also be aware that certain states have customer responsibility laws that limit the amount for which a car rental customer can be held liable for damage to, or loss or theft of, a rented car.