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Are Buy Back Car Leases better than Car Rental in Europe?

Buy Back Leases and Traditional Car Rental Compared

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peugeot 206, buy back, lease, car

Peugeot 206 Buy Back Car with Luggage for Four

James Martin
Updated June 16, 2014

You know the car rental drill. You check around for the best price, then you start to book a rental for your European vacation. Then comes the bad news. You want your spouse to drive the car? That'll be 5 Euros a day extra. You want insurance with that? Oh, boy, that's extra too! On long duration rentals, all this adds up fast.

It's not just the cost up front. Will your credit card company really pay your CDW (Collision/Damage Waiver)? Will the rental company try to charge you for that ding you noticed after you drove the car off the lot? Maybe you think there should be a better way.

French Buy Back Lease to the Rescue--Maybe

If all of the above conditions apply to your car rental search--or you're just tired of the hassle and worry of renting a car in Europe, you might want to look into the French Buyback Lease program. It's the way I choose for my car travel in Europe. You'll have to need the car at least 17 days, but you'll get a new car, all insurance with zero deductible, family members can drive the car, and you probably won't stand in line to pick it up.

Buy Back Leases -- The Motivation

So what makes the buy back program work? Here's the deal. There's this little consumption tax called Value Added Tax in Europe, except everybody is ashamed to call it that, so you'll see it written as VAT. In France, the VAT on a new car purchase is about 20%. Ouch.

So why not sell the car as barely used, saving the new owner some of that tax burden? To do that, why not let a tourist from outside the EU--someone who's not usually subject to VAT--buy the car, drive it on vacation, and turn it in to be transfered to a new owner or a rental car company? Yes, the government of France allows their car companies to supply cars to tourists tax free.

Pretty slick way to get around VAT, eh? It's not that the French are thumbing their colective Gallic noses at the EU; let's not forget that VAT was invented by French economist Maurice Lauré in 1954. (VAT)

In any case, everyone benefits with the buyback program. You get a car that is brand new, the new French owner gets a slightly used car for much less than the cost of a new one, and the outfit leasing the car has is strongly motivated to make sure nothing happens to the car before it gets passed on--so they offer full, zero deductable insurance coverage and a 24 hour hotline for service.

Pros and Cons of Buy Back Leases

Buy Back Pros:
  • You get a new car
  • The car is fully insured (Zero deductible)
  • You have 24/7 breakdown coverage in case anything goes wrong
  • You get the exact vehicle you order
  • You only have to be 18 to participate in the buy back program
  • You can pick up and drop off the car in different cities (free within France)
  • You don't have to struggle to find a service station near the airport, you can return the car empty
Buy Back Cons:
  • The car will usually come with very little fuel in it
  • You'll be charged extra for pick-up or drop-off outside of France
  • You need to lease for at least 17 days

Price: Buy Back Lease vs. Rental

On long term leases, say a month or more, chances are you'll save money over a rental. You'll definately save some hassle. In a short 17-21 day lease, you are likely to find better prices for rental, especially if you're sure your credit card will cover CDW and you don't have a second driver.

What kind of Cars can I expect in the Buy Back Program?

Generally, you'll get to pick from the entire line of either Peugeot or Renault, depending on the company you choose. You can usually pick up cars at airports or in towns.

Ready to look into a buy back program? We have our favorites listed here: Buy Back Lease Programs

Want to hear about my latest buy back experience? Read on.

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