What cost is incurred when a rental becomes a conversion?

The correct answer is based on the understanding that when a rental vehicle is converted—meaning it is not returned and is treated as stolen or unreturned—the rental company typically seeks compensation based on the vehicle's fair market value. Using the Kelly Blue Book as a reference provides a widely recognized valuation that takes into account the current market conditions, mileage, condition, and year of the vehicle. This allows for a standardized approach to determining the vehicle’s worth at the time of the conversion.

The full retail value based on dealer price would likely reflect a higher value than what the vehicle might actually fetch in the open market, which doesn't realistically represent the compensation the rental company can expect if they were to sell the vehicle. Costs tied solely to rental fees do not account for the actual value loss incurred at the time of conversion. A percentage of the vehicle's value could be an arbitrary figure without the specificity that the Kelly Blue Book offers, making it less of an industry standard for valuing vehicles. Thus, relying on the Kelly Blue Book for full retail value is not only accurate but also aligns with standard industry practices for determining compensation after a rental conversion.