Under what circumstances will a Receiving City/Custodial City or Renting City be required to purchase a vehicle from the Owning City at its book value, according to the Budget FDD?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
- C. If a Vehicle is damaged beyond repair due to improper service or storage, or converted, or otherwise due to a violation of any Intercity procedures,
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- The Receiving City/Custodial City or Renting City, as applicable, will purchase that Vehicle, at the Owning City's book value as of the date of the damage.
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- If a Vehicle is converted due to improper qualification of a renter, the Renting City, as applicable, will purchase the Vehicle for the Owning City's Book Value as of the date of commencement of the rental after a sixty (60) day waiting period and has not been recovered.
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- D. An Operator's liability for a Non-Owned Vehicle will be limited to the Owning City's book value. Net of any recovery monies such as salvage, LDW collection, insurance, or subrogation.
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- Book Value will be based on the Owning City's actual cost of a vehicle including rebates, if any, and tax, less 2.083% depreciation per month from date of purchase
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Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, a Receiving City, Custodial City, or Renting City may be required to purchase a vehicle from the Owning City at its book value under specific circumstances related to damage, conversion, or theft. The book value is calculated based on the Owning City's actual cost of the vehicle, including any rebates and taxes, less a depreciation of 2.083% per month from the date of purchase.
If a vehicle is damaged beyond repair due to improper service or storage, or is converted or otherwise affected due to a violation of intercity procedures, the Receiving City, Custodial City, or Renting City, depending on the situation, will be required to purchase the vehicle from the Owning City at its book value as of the date of the damage. Additionally, if a vehicle is converted because of the improper qualification of a renter, the Renting City will be responsible for purchasing the vehicle at the Owning City's book value as of the rental commencement date, provided the vehicle is not recovered after a 60-day waiting period.
Furthermore, the Custodial City is responsible for paying the Owning City the current book value of a vehicle that is stolen from the Custodial City's lot and not recovered within 60 days. In cases where a converted vehicle results from renting to an unqualified renter, the Renting City's liability for damages to the Owning City will be capped at the vehicle's book value. These stipulations ensure that Budget maintains financial responsibility and accountability among its various city operators regarding vehicle management and renter qualification.