What specific disclosure regarding renter liability for loss or damage must Budget include in its rental contracts and representations about Loss Damage Waiver (LDW)?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
through 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 must clearly and prominently disclose specific information regarding a renter's liability for loss or damage to a rental vehicle, especially concerning the Loss Damage Waiver (LDW). This disclosure is required in Budget's rental contracts and any representations about LDW. Specifically, if a renter declines LDW and the vehicle is damaged or stolen, Budget may charge the renter an amount between $x and $y, which must be a specified range of dollar amounts that Budget may seek, exceeding the cost of repairs or the vehicle's fair market value. The disclosure must also state that many insurance companies may not cover this charge, making the renter responsible for the payment. This requirement extends to Budget's rental contracts and representations made through computerized reservation systems like Apollo, PARS, Sabre, or System One. If Budget uses a short-form rental contract that makes it impractical to include the full disclosure, Budget must use alternative methods to ensure renters receive the information before entering the rental agreement, such as a separate disclosure document to be signed or initialed by the renter.
In addition to disclosures in rental contracts and representations, Budget must post a sign or placard at each rental location with specific language. This sign must state that if a renter declines LDW and the rental car is damaged or stolen, Budget may charge them between $x and $y (again, specifying the dollar range) more than the cost of repairs or the fair market value of the vehicle. The sign must also inform renters that many insurance companies may not cover this charge, leaving the renter responsible for payment. The sign or placard must be of a size and posted in a manner that is reasonably calculated to attract the attention of prospective renters.
Furthermore, Budget must disclose clearly and prominently in any communication seeking payment for loss or damage to a rental vehicle any charge attributable to loss of turnback. This includes instances where the vehicle is totaled or stolen, and Budget seeks compensation based on any turnback amount. The disclosure must explain what loss of turnback means and how it was calculated. These measures aim to ensure renters are fully aware of their potential financial responsibilities in case of damage or loss to the rental vehicle and to prevent any misrepresentation regarding the renter's obligations or the value of the damaged vehicle.