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Alternative to Renting a Car in Europe

Cristina Pekarik

After weighing our options about access to vehicles while we are in Europe, we discovered an alternative to renting a vehicle.

Background Information

First, let me share a little information about us. We are a Canadian family in the process of finalizing our plans for spending 10 months in Europe. We are mid-career professionals with two young children, and we are indeed going slow. We have deferred salary and foregone winter vacations for many years, as well as foregoing other amenities & luxuries so that we can travel slowly enough to learn a new language, give the gift of unhurried time to one another, truly immerse ourselves in the culture(s), reflect on some of our future goals and reset our compasses in those directions. We have arranged to rent out our house, are selling our two Toyotas (why have them sitting in the driveway losing value for the better part of the year), and are buying sturdy luggage at the moment!

At the beginning of our planning, we were thinking about ourselves as extended tourists. Our transportation, we thought, would be a few car rentals here and there and use of the train system, getting away from the car culture. We worked with a travel consultant who helped us reset our perspective to acknowledge that most of our time was to be spent in the countryside, staying put for a month or several months at a time, and taking lots of weekend excursions. A long-term lease was highly recommended.

Leasing Options

I went on to investigate leasing options, which are capped at 165 or 175 days, taking the approach of leasing and then adding on an occasional 3-week rental here and there. I realized we would be spending upwards of $8000 to do this. This was when I cast my thinking a little more broadly. There is the 17-day threshold where leasing makes more sense than renting; and there seems to be a threshold of 5-6 months, where buying seems to make more sense.

Option: Purchase a Volvo

I happened upon the Volvo site, and this is what I found: I can buy a new Volvo, made to Canadian specifications (Americans can get them to American specs), and take delivery at any number of points in Europe. At the end of my stay, they will ship the car, free of charge to my closest Volvo dealership in Canada.

The costs

I do not pay European taxes, but pay Canadian duty (6.1%; I believe it is more like 3% for Americans) on the residual value of the car. If you stay 12 months, Canada Customs allows a deduction of $10,000 on the purchase price, plus GST. If I were buying a Volvo in Canada, I would be paying this on the upfront (new) value of the car. You essentially get to reduce duty payable by “depreciating” the car by using it in Europe. Oh yes, and under one of the programs (European Delivery), they will give you free tickets for two from North America to Goteburg, Sweden, to pick up your car, give you a factory tour and put you up for one night. The sale prices are considerably lower than if you were to buy a Volvo at your local dealership (reflecting these various savings & deferred charges).

For Americans

At the moment I checked the prices, the prices were considerably better for Americans than for Canadians, given parity between the dollars. I’ve made some grumpy noises about that to Volvo (I’m not your average, polite Canadian). You have to do your own financing, though (there is no financing available from Volvo). You can get registration and insurance — for Canadians in Italy, we have been told that 12 months is fine. Americans must find out what applies to them. There is one page on the site that says Americans have to ship back within 6 months—investigate carefully, as not all Volvo sales people will tell you the same thing. We almost walked away from this option because it looked like we could only have the vehicle in Europe for 6 months. Anyway, currently Volvo salespeople are not singing from the same songbook on this. I’ve made some noises to Volvo on this account as well. At the time I was looking at the site, they were also offering Americans additional discounts of $750-$1500 under these programs.

Why does Volvo do this?

My understanding is that this program (Expat, Diplomat & Military Sales & European Delivery) is an integral part of their marketing to attract new customers. You see, Volvo marketing agents think that if you are a Volvo owner once, you are a Volvo owner for life.

Now, being mid-career, parent of two young children who would rather take time off to spend with my kids than work longer and drive a high-priced vehicle, I had never though of myself as a Volvo owner. But, the bottom line? I have taken the $8-10,000 that would have been spent on rentals and leasing, and put it into the purchase of a quality vehicle that will be delivered back home to me at no charge. Even if I sell the vehicle back home (and revert to my basic Toyota), the net cost of this strategy will be closer to $4-6,000, and I get to drive a Volvo while we are in Europe!

Other manufacturers?

BMW has a similar program, but not anywhere near as attractive - they add 20% to the cost to cover shipping, etc. Also, their cars are more expensive. There is an informative discussion thread about European delivery of a BMW. Read that discussion here The last entry on this discussion tells about their flawless experience with BMW.

I also checked with VW, but they discontinued their program about 20 years ago.

Saab will also be offering a European delivery program, but will be available for their 2009 vehicles. See www.saabusa.com/ or www.saabusa.com/saabjsp/europeandelivery/ for more information.

More information about Volvo's program

To find out more about Volvo's programs, click on the following web site: http://www.volvocars.com, then click on the "Diplomat, Military and Expat Sales" link. To find the "European Delivery" information, you have to go to the Volvo site of your country, then to the site of your local dealer where you can find the information there.

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