Crams has put together for you the most important points around the leasing and the car purchase with credit (car loan). We tried to look at the topic in terms of an overview of all relevant aspects.
Legal classification when buying a car in Switzerland
When buying a vehicle with a loan, the legal situation is clear, since a loan and a sales contract are concluded. The legal classification of leasing in Swiss law is controversial – the legal practice is based on a leasing agreement.
The car purchase with a credit establishes ownership of the vehicle by the buyer. The car belongs to the buyer and he can fully enjoy it. The lease passes the ownership, but the property remains with the seller. This means that the lessee has no power of disposition and can not legally sell the car, for example.
When car loan is the free choice of insurance. This can be interesting, especially for second-hand cars, since it is not necessary to take out a fully comprehensive insurance during the entire term. In the case of leasing, there is an obligation to provide fully comprehensive insurance during the entire term, which is reflected in higher insurance premiums over the entire term.
One of the biggest advantages of car loans over leasing is the right to sell the vehicle at any time. In contrast to leasing, there is no entry 178 in the vehicle card (holder change prohibited), since the purchase passes through the property fully. Thus, it is possible for you to sell the car at any time in changing the circumstances and to pay back the loan with no additional cost with the proceeds.
When leasing a sale is generally not possible.
Deposit / monthly payments
When buying a car via credit no down payment is necessary, but the rates are at best somewhat higher. For leasing a deposit may be required. Together with the surrender value, therefore, lower monthly installments may result. The car loan will be repaid over time until the car is completely paid off at the end of the term. There is a purchase option for leasing, which usually corresponds approximately to the residual value.
Premature detachment / dissolution
With the car loan a premature replacement is possible at any time and without additional costs. If you want to exit as a lessee from a loan agreement, usually high exit costs. Depending on the situation, these sometimes high payments can lead to a debt beyond the ownership of the car. The financial risk of a premature leasing exit is fully borne by the borrower.
When buying a car and the associated property through a loan, you can complete an unlimited number of kilometers. This does not affect your financing costs. When leasing the annual number of kilometers is contractually determined. Exceeding this may lead to an adjustment of the residual value and thus significant additional costs at the end of the term.
With car loan, a full deduction of the loan interest from your income tax is possible. Since leasing is a kind of rent, this is not possible.
What is cheaper: leasing or credit?
We have calculated a cost comparison between leasing and car loan for you.
Assumptions: New cars for a purchase price of 30,000 francs with a residual value of 12,000 francs after 48 months. The financing amount for the lease therefore amounts to CHF 18,000.
Due to the repurchase value with a fixed agreed number of km, an increased use can be very expensive. In addition, if the leasing contract is prematurely terminated, the lessors require a replacement for early repayment (prepayment penalty). With the loan, the constant monthly rate can be clearly calculated right from the beginning and the amount is repayable at any time. There is no risk of additional costs.
Although car loan enjoys significant advantages over car leasing, the individual situation is crucial. The Crams team believes that the benefits of loan finance outweigh. With Crams’ low interest rates, leasing pays off financially in a few cases, and the flexibility associated with leasing is great.
Here you can apply for your car loan directly online. We are happy to help you with questions about your loan application.