What is Budget required to disclose regarding renter liability for vehicle damage when LDW is declined?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
hrough any partnership, corporation, subsidiary, division, or other device, in connection with the promoting, offering for rental, or rental of any vehicle, in or for any rental location where it seeks loss of turnback or turnback value in any form for vehicles rented in that location, in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act, does forthwith cease and desist from:
- A. Failing to disclose, clearly and prominently, in connection with any representation relating to the renter's liability for loss of or damage to a rental vehicle, including any representation about LDW, that in the event of loss of or damage to a vehicle for which LDW was declined, respondent may charge the renter 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, that many insurance companies will not pay this charge, and that the renter will have to pay it. This paragraph applies specifically to, but is not limited to, Budget's rental contracts and to any representation relating to the price or terms of LDW made through respondent's inputs in the "company-specific location" part of third-party, computerized reservation systems, such as "Apollo", "PARS", "Sabre", or "System One".
Provided, however, that if respondent uses a "short-form" rental contract or other document or electronic form of agreement that makes it impractical to place the required disclosure within the document or form, respondent shall devise other means to ensure that each renter receives the substance of the disclosure before entering into the rental agreement. The other means could include, but are not limited to, a separate disclosure document to be signed or initialed by the renter.
B. Failing to post at each Budget rental location a sign or placard clearly and prominently containing the following language:
If you decline 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
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, Budget is subject to an order that dictates specific disclosures regarding renter liability for vehicle damage when the Loss Damage Waiver (LDW) is declined. Budget must clearly and prominently disclose that if a renter declines LDW and the rental car is damaged or stolen, Budget may charge the renter between $x and $y (a range of dollar amounts that Budget may seek) more than the cost of repairs or the fair market value of the vehicle.
This disclosure must also state that many insurance companies may not cover this additional charge, making the renter responsible for paying it. This requirement applies to Budget's rental contracts and representations made through computerized reservation systems. If Budget uses a short-form rental contract where including the full disclosure is impractical, they must use alternative methods, such as a separate signed disclosure document, to ensure renters receive this information before entering the rental agreement.
Furthermore, Budget must post a sign or placard at each rental location with the same disclosure language regarding potential charges exceeding repair costs or fair market value when LDW is declined and the renter's responsibility to pay if their insurance doesn't cover it. The sign must be of a size and placement that is reasonably likely to attract the attention of prospective renters.
Finally, in any communication seeking payment for vehicle damage, Budget must clearly disclose any portion of the charge attributable to "loss of turnback," including instances where the vehicle is totaled or stolen. This disclosure must explain what "loss of turnback" means and how it was calculated. These measures aim to ensure transparency and prevent misrepresentation of the renter's obligations and the value of damaged vehicles.