There are a number of players in the game and the contractual relationships are probably somewhat variable - original supplier/dealer, main dealer network, manufacturer, finance company.

But the value of an asset worth (say) £7-15k plummets if just left in a field. The field also may need security, insurance, rental, ties up money etc. So stockpiling 2-4 year old cars in a field generally won't make good business sense.

Exceptions may be made if they want to drip feed them into the market to maintain used prices over a few months. Cars that are three years old on return will almost certainly not be current spec or even superceded by a new model and the field treatment would be a complete waste of effort.

Therefore there are just a few options for returned cars:

1. good condition, full service history, no damage etc will be fed rapidly into main dealer network as used stock
2. the balance of (1) not required by main dealers + generally good vehicles requiring little more than a valet will likely go in volume to car supermarkets which can take 10-100 similar spec vehicles in one go.
3. The remainder, many of which may need some remedial work or lack good history will go to auction - bought by smaller dealers in small numbers + general public
4. The clearly below par will also go to auction with most bought by the public at a perceived large discount to a full price.

This is of course just guesswork but I suspect not far adrift from what actually happens!

2nd hand cars re leased!

The initial Lease / PCP often has discounts on list prices for the lease companies & subsidised interest rates to make the deal feasible..

About 4 years ago a neighbour leased a new 320d Msport / Xdrive / auto

IIRC it was £400 /£420 for 48 months with £12K balloon at the end - the total cost was some £4K under the then list price.

Same garage & same car BUT 6 months, 3,000 miles on clock was more expensive - no subsidy on Interest rate

Even ex day rent cars (6 - 9 mths old with say 10/12K on the clock were £460 / mth - the screen price was well down BUT the Interest rate of say 10% (& the odd cleaning, admin charge etc) was a lot more than the 1.9% rate my neighbour paid on the new car.

IIRC it was £400 /£420 for 48 months with £12K balloon at the end - the total cost was some £4K under the then list price.

Even ex day rent cars (6 - 9 mths old with say 10/12K on the clock were £460 / mth

This PCP business seems an astonishingly expensive way to run cars. I have kept accurate motoring records since Jan 1980 and in those 234 months have spent a total of £55,100 on eight cars - one new, the others mostly nearly new (Fiesta Ghia, two plush Passats and a Focus for SWMBO; a TR7 and three big Audis for me) - and we still have three of them (Focus, TR7, A8). That's less than £100 per car pcm, falling as the months roll by.

I would be ashamed to be read comparing costs over 38 years without adjusting for inflation as it is just so meaningless.

Prestige "pre-owned" cars certainly be leased.