History of Budget Rent A Car
Budget Rent-A-Car History - 1958 - 1970s
Budget Rent-A-Car was founded in Los Angeles by Morris Mirkin in 1958 with an initial investment of USD 10,000.
Mirkin chose the name of the company based on targeting the "budget-minded" or “value-conscious” renters.
With his wife, Mirkin managed a fleet of ten cars, originally available at the rate of four dollars a day and four cents a mile.
The following year, 1959, Mirkin's relative, Jules Lederer (husband of Ann Landers), at the time president of a Chicago-based manufacturer of writing instruments, came onboard in an effort to grow the business with additional financing and to help in creating a leasing company to help Mirkin increase his fleet and grow the business.
In 1960, Lederer and Mirkin establish the final form of Budget Rent a Car Corporation in Chicago, and the company starts on an rapid growth and expansion program, both nationally and internationally.
During the 1960s and 1970s, Budget maintained a focus on value-oriented leisure travelers and grew by more than 20 percent every year in the leisure market during these first two decades.
However, Budget also began to develop policies and programs designed for smaller businesses and medium-sized corporate accounts during this time.
As was the case with most rental agencies, much of Budget's rental business started to revolve around national and international airport locations during this time.
Budget Rent-A-Car History - 1980s - present
The early and mid 1980s were hard for many car rental companies financially, and Budget was among the companies whose ownership base kept fluctuating.
Part of that hardship has been credited to the repeal of the federal investment tax credit in 1986, which also signaled the restructuring of Budget's management.
Repeal of the tax credit law meant that owners of the rental-car companies were no longer the recipients of tax exemptions for new car purchases.
Also in 1986, Gibbons, Green and van Amerongen Ltd., along with management and selected investors, bought Budget from Transamerica Corp. in a leveraged buyout transaction worth over $200 million.
Following the purchase, the company was taken public in 1987, with an initial public offering of 3.2 million shares.
The turbulence continued in early 1989, as Beech Holdings Corp, a holding company comprised of Budget management, Ford Motor Co., and Gibbons, Green, Van Amerongen, upped their ownership to 100 percent of Budget stock for $333 million and took the company private again.
During the 1980s and 1990s, Budget started a new strategy of gaining direct control of the rental locations rather than franchising them out.
This strategy change culminated in late 1990 when Budget gained corporate control over its largest licensee, Diversified Services of Fort Lauderdale, Florida.
The buyout gave the company direct access to seven high-traffic airport sites, including locations in Los Angeles and Florida, the two largest rental markets in the United States.
Budget's acquisitions in domestic markets were paralleled by a similar expansion in foreign car rental markets during 1990 and 1991.
In fact, early 1990s saw the company acquiring many locations in Europe, including the U.K., Belgium, France, Spain, where Budget did own the outlets outright rather than franchising them.
In 1992, Budget Rent A Car decided to move its long-time downtown Chicago headquarters to a new location in Lisle, Illinois.
Another ownership change occurred in 1997, when Budget was bought by Team Rental Group, the company's largest U.S. franchisee, and changed its name to Budget Group, Inc.
The same year, Budget Group began trading on the NYSE.
However, as of 2002, Budget Group was de-listed from the NYSE and the company was forced to sell its Budget Rent A Car assets in the U.S., Canada, Latin America, the Caribbean, Australia and New Zealand to Cendant Corporation, which is a diversified provider of business and consumer services primarily within the travel and real estate sectors.
Other worldwide assets of the company were sold to Avis Europe, Plc.
The same year, Cendant moved Budget's headquarters from Lisle, IL to Parsippany, NJ.
Cendant restructured the company in 2006 into four independent companies: Realogy, Wyndham Worldwide, Travelport, and Avis Budget Group, Inc.
Through this restructuring, Budget Rent A Car System, Inc. became a subsidiary of Avis Budget Group. The company is currently listed in the New York Stock Exchange under the ticker symbol CAR.
Today Budget Rent A Car has over 1,900 rental locations worldwide.
From History of Budget Rent A Car page to Car Rental Directory index