Budget Rent A Car is a name widely known in the rental industry. It has been around since the early days of car rental and one of the first to target travelers on a budget (hence the name). The company has had a bumpy ride and seen many ups and downs but the name and company values have remained. Here is an overview of how this company has survived.
Budget Rent A Car was the brainchild of Morris Mirkin who established the business in Los Angeles in 1958. He started the business with just $10,000 and only his wife and himself as employees. He only had a fleet of 10 cars but with a 4 dollars a day and 4 cents per mile rate, his rentals were popular for their value.
Budget was doing good business but Mirkin wanted rapid expansion and knew that to be successful he needed to have a number of locations. Funding was provided a year later by his relative, Jules Lederer. This enabled the company to create a leasing company and increase its fleet. Lederer and Mirkin established Budget Rent A Car Corporation in 1960 in Chicago, Illinois. The company started to rapidly expand both nationally and internationally.
The 60s and 70s were a very successful time for Budget. Like many companies in the industry, they moved their location to the airport so it was more convenient for travelers. They maintained their low rates to attract the budget-minded customers and they gained about 20 percent of the leisure market every year. They also increased their market reach by attracting smaller businesses and medium size corporations.
The 80s and 90s were a rough time for Budget Rent A Car. The company changed hands a few time and profit rose and fell. A tax credit law was repealed in 1986 allowing rental car companies to exempt taxes on new car purchases. A management restructuring took place and many car rental companies felt the financial blow. Despite this upset, the company was taken public in 1987 and had an initial offering of 3.2 million shares.
Changes continued in the late 80s and 90s. Budget was bought out for 3.3 million by various corporations and taken private again in 1987. In 1997 it was bought by Team Rental Group and changed its name to Budget Group, Inc. and began trading on the New York Stock Exchange. Things seemed to be looking up with expansion worldwide but by 2002 sales of public stock dropped and the company was de-listed. Budget was forced to sell most of its assets.
Today Budget maintains its name and corporate identity but is now a subsidiary of Avis Budget Group. Budget Rent A Car has almost 2000 car rental locations such as the
alicante airport and is again listed on the NYSE.
