What are 'program vehicles' for Dollar Rent A Car, as opposed to 'non-program vehicles'?

According to Dollar Rent A Car's 2025 Franchise Disclosure Document, the company categorizes its revenue-earning vehicles into two types: program vehicles and non-program vehicles. The distinction lies in how depreciation is handled. For program vehicles, Dollar Rent A Car has agreements with manufacturers that guarantee the depreciation rate during specific repurchase or auction periods. This means the manufacturer bears the risk of depreciation for these vehicles during the agreed-upon timeframe.

In contrast, non-program vehicles do not have this guaranteed depreciation. For these vehicles, Dollar Rent A Car estimates the period they will hold the vehicle as an asset and the residual value of the vehicle at the expected time of disposal. This estimation process involves more uncertainty and relies on management's judgment regarding market conditions and their impact on residual values. The company reviews depreciation rates quarterly, considering present and estimated future market conditions to determine the residual values at the expected time of disposal and the estimated holding period for revenue earning vehicles.

For a Dollar Rent A Car franchisee, understanding the mix of program and non-program vehicles is crucial for financial planning. Program vehicles offer more predictable depreciation costs, reducing the financial risk associated with fleet management. However, non-program vehicles may offer opportunities for higher returns if the company can accurately predict residual values and market conditions. Franchisees should inquire about the typical ratio of program to non-program vehicles in the Dollar Rent A Car fleet and the factors that influence this ratio.