Buy Back Leases and Car Rental

Oh! We've parked our rental car in Paris! What if someone scratches it?

If you’re planning a trip to France it’s quite likely you’ll think of renting a car. Renting a car is easy. You reserve a size you need while in the US or other country. Then you get off your plane, find the rental office and stand in line with all the other people on your flight and others who have done exactly the same thing you have. When you get to the front of the line you’re told the make and model of car you get. You’re then told the insurance options, which may exceed the daily rental price of the car they advertised in a huge font on the website. It may or may not fit in the category you ordered because they’ve given away all the cars in that category. If you want your sweet honey to share the driving with you, that is likely to cost extra, too. But it’s likely you’ll come away with a car of some sort and a credit card full of charges you might not have expected.

When you get to where they’ve hidden your car, you examine it in minute detail. You don’t want a scratch to go undocumented because for them to rub it out will cost you a fortune.

Ok, I’m not a fan of renting a car. So what is the alternative? It’s what’s called a French buy-back lease.

The French are a very clever people, you see. They have created a program for tourists taking vacations of three weeks or more that benefits everyone down the ownership chain.

It goes like this. While at home you look over a grid of French cars to choose the one you like—just as if you need a new car and are buying one—because, technically, you are.

So, of you want a diesel powered car with GPS that gets 59 miles to the gallon, you just look for it and reserve it. You get the exact model you ordered. It will be waiting for you when you get off the plane, sometimes at smaller airports it will be parked right outside the gate.

So let’s say you have an accident

So you’re driving your lease car on the Autoroute and suddenly you’re forced to brake like a maniac and you stop just in time to avoid hitting an overturned truck. There is quiet as everyone else seems to have stopped as well. Then, while you’re sitting in the car, you hear a suspicious noise, tires humming loudly on the pavement—and then: skreeeeeeeeeech!

A van suddenly appears to your left. But you were in the left lane! He tries valiantly to squeeze between your offending car and the guard rail, but the van is wide and the space is narrow. Glass rains upon you. This is the result:

Our Lease Buy Back Car, Wrecked

You will notice that the front suspension is no longer part of the automobile. Other random parts are missing as well.

So the $64,000 question is: What does this cost you, the innocent party?

Correct answer: Time.

Yes, you are unlikely to get to your next planned destination on time. But the insurance is inclusive. We didn’t pay a cent after the above disaster. We got free rental car (but we had to pay for insurance) while a new car delivered to us to complete our stint in Europe.

Whoa! Why do they do that?

I mentioned before that the French have been very clever to operate this program, the only country in Europe that does.

There is an enormous Value Added Tax (VAT) on new vehicles in Europe. So, they let you buy the car with a prearranged sales date that happens to coincide with the end of your vacation. It’s just like a rental, but you’ve payed the VAT and the rental car company who wants the car gets it cheap(er) because that high VAT doesn’t apply to used cars. So the company has an interest in providing the buyer with a great car—thus the good insurance—and everyone benefits.

So what’s the catch?

There are a couple of stipulations. You must be taking a rather long vacation (for Americans). The lease buy back car might be slightly more expensive than a rental. But if you’re a couple, either of you can drive the car at no extra cost. You don’t get a filled-up car but you don’t have to fill it up when you return it, a huge benefit in Europe because it’s not so easy to get gas at the airport in some instances.

You must also:

  • Reside outside of the European Union
  • Are at least 18 years of age with a driver’s license in good standing
  • Plan to hire a vehicle for a minimum duration of 21 days

You can get your car delivered to an airport in France—or sometimes at a train station. You can pick it up or drop it off in other European countries but there will be a delivery charge. Otherwise you will have paid all you need to pay before you set off for your vacation.

This is how we travel in Europe. We’ve been doing it a long time, and believe me, we’d never go back to renting unless there’s an AR15 pointed at us.

Check out the program we use to lease a Peugeot of our choice:

Peugeot Open Europe Lease