Drive Europe in a new Peugeot

If you are thinking about driving yourself around Europe, but are concerned about the cost of hire cars, one way to do it quite cheaply is to buy a brand new Peugeot, then sell it back to the dealer when you’ve finished with it.

To participate in the scheme you must buy and sell your new Peugeot in France, and you must own if for more than 17 days. Called the `Peugeot Buy Back Scheme’, it appears to be more of a leaseback scheme.  In other words, it doesn’t seem that you purchase the car outright, you simply lease it for a particular period.

Terms include unlimited mileage, 24-hour roadside assistance, fully comprehensive insurance, exemption from European Value Added Taxes, road taxes and airport charges, and a minimum age of 18.  This means that you do not attract the rigorous conditions that are normally imposed on rental cars.

So, if the deal is so good, what is the catch?  It seems that is has to do with Value Added Tax.  Europeans are hit with expensive VAT on new luxury car purchases, whereas non-Europeans aren’t.  The VAT is equivalent to 20% of the purchase price.  However, if a dealer send a slightly used car to a European then the owner does not have to pay the 20% VAT.  This means they are getting an almost-new car for 20% less than they would normally pay, and it increases the chance of the dealer getting a sale, so it works in both their favour.

Naturally, if you opt for this scheme it is in your best interest to look after the car.

At this stage, the scheme seems to be targeted at Americans, but I would imagine that is any other non-European nationals wish to go into the scheme, they should be able to.  If you are interested in the `Peugeot Buy Back Scheme’ read the fine print very carefully before making any commitment.

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