Why a ‘Buy-Back’ Program May be a Cheaper Way to Rent a Car in Europe

Why a ‘Buy-Back’ Program May be a Cheaper Way to Rent a Car in Europe
Photo: iPics, Shutterstock

Back in 2020, many car rental companies got rid of large parts of their rental fleets. Now, with surging demand and less supply, car rental prices are often astronomical (not to mention what you’ll spend on gas to fill up the tank). When you travel to Europe, though, you have another option: auto rental buy-back programs.

A buy-back lease, which you’re doing through these programs, is a customs and tax provision that allows non-EU residents to “buy” a new car during a European stay without paying customs duties and value-added tax (VAT). The car can then be later sold as a lightly used car to an EU resident and they won’t have to pay VAT either (which is around 20% in France, for example).

Exact details of your lease will vary, but as a general rule you can expect the following:

  • Minimum day requirement (typically around three weeks)
  • Brand new
  • Lease price guaranteed in U.S. dollars or Euros
  • Unlimited mileage
  • Insurance with no deductible and fewer limitations on additional drivers
  • Roadside assistance

Depending on where in Europe you are picking up and dropping off your car, there may be additional fees. Renault, Pugeot, and Citroen are two of the leading manufacturers offering this option. In addition to getting a brand new car and not having to pay extra for insurance, extra driver fees, or under age 25 fees, these buy-back programs can be even less expensive than renting from traditional car rental companies.

For example, an economy car (Renault Clio or similar) rental from Hertz from Sept. 15 to Oct. 15 with pickup and return at Paris CDG airport would cost around 900 EUR (not including insurance or extra driver fees). Instead, if you book a buy-back lease for a Renault DACIA Duster, you’ll pay 1,470 EUR for the same dates, including insurance and the ability for other people to drive your car. In this case, renting with Hertz is likely to be less expensive even with the additional fees, if you’re fine with an economy car; however, if you’re already paying some additional fees for insurance or an extra diver, the cost difference to rent a brand new mid-size SUV may not be much.

Keep in mind that like with traditional car rental companies, availability for cars though buy-back programs is limited, so if you are interested in this option for your European trip, you should consider your options right away. Finding a car at the last minute will be nearly impossible, and even unlikely within the few weeks leading up to your trip.

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