Own your own wheels in Europe

How to arrange for a short-term lease on a brand-new car in Europe—cheaper than a rental for longer periods of three weeks or more, and far better insured

A tractor parked in a town square in Ireland Leasing can be cost-cutter, especially for unusual vehicles like vans or SUVs (though not, sadly, tractors).The military policeman stopped my car just outside Trieste, and as I handed over my papers, I knew there was going to be some explaining to do.

The carabiniere officer, part of a routine anti-smuggling roadblock near the Italy-Slovenia border, became confused as he shuffled through the car's title (which, like the plates, was French), ownership papers (which stated I'd purchased it in Milan), and my driver's license (which said I lived in Pennsylvania).

"It's a

short-term lease,

" I tried to explain. He stared at me suspiciously.

"Sir, please step out of the vehicle and open the trunk."

That's the sum total of problems I've ever encountered when leasing a car in Europe—and since my trunk wasn't full of Slovenian cigarettes, I was back on my way shortly.

The Upsides

The benefits of a

lease—often called a buy-back, or purchase/repurchase, program

—are legion. It costs anywhere from 18 to 70 percent less than renting, you get

unlimited mileage

and

roadside assistance,

and a brand-new car of your choice direct from the factory.

Of course, "your choice" is limited primarily to a Renault or a Peugeot since leasing is offered only by French car manufacturers (it's complicated, but bascially these programs take advantage of a loophole put into place 50 years ago as an attempt to lure French émigrés back home after World War II).

Lease agreements are packed with perks no rental outfit offers.

Rates are guaranteed in U.S. dollars,

and

no VAT or local taxes

will materialize when you return the car—a chronic problem with rentals. There are

no airport surcharges

"extra driver" fees,

and the

minimum age is 18

(with most rentals, you have to be 25).

The big bonus is the

free insurance.

A lease gives you full coverage—none of that rental agency nickel-and-diming with

CDW, theft, and liability

each costing $7 to $24 per day.

There's also

no deductible.

This is key. Once I turned in a regular rental with a scratch on the door (it got sideswiped while parked in Palermo), and the rental company charged me the full $300 of deductible to fix it.

On the other hand, I once returned a leased car missing its entire back windshield (wouldn't ya know it, the car got broken into the night before I was to turn it in). The backseat was still glittering with shatterglass when I drove it up to the leasing agent at the airpoirt, but since teh lease came with full insurance and no deductible, I just handed over the keys with a sheepish grin and an apology.

The Downsides

OK, you know there's got to be a downside, and there is: the

17-day minimum.

Leasing won’t work for your two-week vacation. Also, leased vehicles can only be retrieved or returned at a few dozen locations, including 18 (Renault) to 28 (Peugeot) cities within France, plus major airports throughout Europe—with

outside-France pick-up and drop-off fees

ranging from $49 to $275 (priciest in Spain, Portugal, and Rome—and Peugeot's out-of-France fees are roughly half those charged by Renault).

The Price Point

At what point does leasing become more cost-effective than renting? "In France, it's closer to 17 days," said Alexander Roy, president of leasing specialist Europe By Car. "In Italy or Germany, closer to 30 days," though "for people who always buy all the insurances, the breaking point will be closer to 17."

I ran my own numbers pitting the three leasing agencies against both Hertz and Avis. I won’t bore you with the details (except to say that Hertz was priciest by a long shot every time), but the practical upshot was that, if you’re the type to refuse the CDW and other insurances (an unrealistic scenario in countries where it's required, including Italy and Spain),

rentals can be cheaper

over a 17-day period (by 30–36%) and even a 30-day period (15%), but a lease clocks in at 10% cheaper on a six-week period.

However, once you compare apples to apples and tack the insurances and airport surcharges to the rental costs,

leasing always comes out on top

: 28% cheaper on the 17-day option, 45 percent cheaper for a month, and 70% cheaper over six weeks.

Leasing is also a great option for

specialty vehicles.

"A four-wheel-drive or coupe convertible is very hard to get, or very expensive, with a rental," said Guy Geslin, vice president of Renault USA (which offers a greater selection of speciality and larger vehicles than Peugeot). "But with a lease, we can get it very easily, and for a very fair price."

The figures bear him out: The leasers undercut renters by 11% on a seven-passenger van, and rental outfits couldn't rustle up a convertible in all of Paris, while Europe By Car charged only 8% more for a 1.6-liter coupe than for a midsize.

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