Leasing a car in the U.K.

How to arrange for a short-term lease on a brand-new car—cheaper than a rental for longer periods, and far better insured

Short-term car leases—often called a buy-back, or purchase/repurchase, program—were once the best-kept secret of long-term travelers—way cheaper than a rental for three or more weeks.

The good news is that rental rates have since come way down.

The bad news is that lease rates have not come down (instead, they've crept up). So leases are no longer such a phenomenal deal—though for certain kinds of long-term trips, they can make great sense (especially if your time in the U.K. is part of a longer European vacation and you can arrange to pick up the vehicle in France, which would save several hundred dollars)   

The benefits to leasing a car in the U.K.

• For long periods (two months or so), it can cost anywhere from 18 to 30 percent less than renting.
• You get unlimited mileage and 24/7 roadside assistance.
• You get a brand-new car of your choice (exact make and model) direct from the factory.
• Rates are guaranteed in US dollars.
• There are no additional driver fees.
• The minimum age to lease 18 (not 25 as with most rentals).
• There no maximum age for leasing.
• Since it's technically a buy-back program, there are no taxes. There are none when you first agree to the deal, and no VAT, airport fees, or road taxes will suddenly materialize when you go to hand in the keys (a chronic problem with rentals).
• There are no airport pick-up fees (as with rentals). In fact, airports are pretty much the only places you can pick up a lease.
• It's a cheap way to get specialty vehicles: Vans, 4WD, convertibles. "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 specialty and larger vehicles than Peugeot). "But with a lease, we can get it very easily, and for a very fair price."
• There are no one-way fees to pick up in one city and drop off in another.
• You car comes with a factory warranty and FULL INSURANCE coverage. There's no fiddling around with separate CDW, theft protection, and liability, each of which, on a rental, adds an extra $7 to $24 per day. What's more, with absolutely 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 airport, but since the lease came with full insurance and no deductible, I just handed over the keys with a sheepish grin and an apology. I was not charged a single cent.
• You get something no rental can give you: That new car smell.

The downsides to leasing a car

OK, you know there's got to be a downside, and there is: the 17– or 21-day minimum (it varies company to company). Leasing won’t work for your two-week vacation—though even then, the math sometimes still works out in your favor to do a minimum 17-day lease and simply turn in in car three days early.

There are other cons (or at least considerations):

• You must be non-EU citizen (or at least live outside the E.U.)
• You must arrange the lease at least a month in advance (though you can do it up to two weeks or so ahead by paying an expedite fee).
• Leased vehicles can only be retrieved or returned at only a few dozen locations in Europe, most of which are in France. Other pickup locations elsewhere Europe include major airports—which means, for the U.K., just London Heathrow.
• Note that outside-France pick-up and drop-off fees range from $49 to $285 each way (priciest in Spain, Portugal, and Italy). The fees for London range from $270 to $400.
• You can only pick up and drop off vehicles at airports; there are no downtown offices.
• For periods of less than six weeks, rentals can often be cheaper—but only if you forgo all rental insurances. Once you start actually comparing apples to apples and pile on all the insurance rates to a classic rental, the break-even point comes out closer to six weeks (see "The price point," below).
• In addition to that minimum lease period of 17-21 days, there's a maximum rental period of 170–175 days. (Though some allow you to extend that to 355 days.)
• Yes, you get a make and model of your choice, but "your choice" is limited to a Renault, Peugeot, or Citroën since leasing is offered only by French car manufacturers (it's complicated, but basically these programs take advantage of a loophole put into place 60 years ago as an attempt to lure French émigrés back home after World War II).