Auto Subscription or Leasing? How to Choose the Best Mobility Solution for Your Business

A vehicle fleet represents one main thing for businesses: a lot of tied-up capital. Many companies opt for alternative solutions to provide company cars to employees or acquire pool vehicles. In addition to leasing, auto subscriptions are also an option. This guide outlines the differences between the two models and highlights their advantages and disadvantages.

Differences Between Auto Subscriptions and Leasing

Auto subscriptions and leasing have some similarities: both models provide exclusive vehicle use without requiring a purchase. However, the vehicle does not become your property and must be returned after the agreed-upon period. Both options also offer packages based on mileage. Let’s examine the differences.

Cost Structure and Contract Terms

One of the most significant differences between leasing and auto subscriptions is the contract duration. Leasing requires a long-term commitment, and exiting a lease early is often difficult. Auto subscriptions, however, offer flexible terms. For instance, with CARIFY, contracts start at just one month, with options for long-term rentals of up to 24 months.

The cost structures also differ. While leasing involves monthly payments plus additional running costs (e.g., insurance, maintenance), an auto subscription includes these in a single rate. With CARIFY, there’s no upfront payment, unlike leasing.

Included Services and Packages

Auto subscriptions are often referred to as all-inclusive packages. At CARIFY, the following are included in the monthly rate:

• Vehicle taxes

• Insurance (liability, comprehensive, with customizable deductibles)

• Repairs

• Tires

• Registration

• Swiss highway vignette

CARIFY’s service packages also minimize administrative effort for fleet management. Services include reminders for regular inspections, scheduling maintenance appointments, and optional vehicle transfers. Seasonal tire changes are also covered.

Flexibility in Vehicle Switching

Leasing ties you to a vehicle for a longer period—often two years or more. This can be problematic if your mobility needs or vehicle requirements change. Leasing is also unsuitable for short-term or temporary vehicle needs.

Auto subscriptions, on the other hand, offer flexibility. For example, you can use them to provide cars to new employees during probationary periods. CARIFY’s extensive selection includes passenger cars, vans, and transporters, catering to diverse mobility needs.

Pros and Cons for Swiss Businesses

Having reviewed the similarities and differences, let’s examine the specific advantages and disadvantages.

Advantages of Auto Subscriptions

• Flexibility: Adaptable terms, mileage packages, and customizable insurance.

• Cost Transparency: All running costs are included, simplifying accounting and budgeting.

• Convenience: Comprehensive service options save time and resources.

• Risk Mitigation: No impact on claims history or rising insurance premiums in case of damage.

• Adaptability: Test electric vehicles or other types of cars before making a permanent switch.

Auto subscriptions do not require an initial payment, but CARIFY offers competitive rates for business customers. Additionally, subscriptions can be extended or converted into purchases if needed.

Advantages of Leasing

• Customization: Choose vehicles with specific features and configurations.

• Lower Initial Payment: While leasing requires an upfront payment, it’s lower than outright purchasing.

• Access to New Models: Vehicles can be returned and replaced every few years.

Typical Challenges

Cost and Tax Considerations

Running Costs and Depreciation

Monthly vehicle costs include running expenses and depreciation, with the latter being especially significant in the first few years. Businesses must account for both fixed and operating costs, averaging around CHF 10,000 per year per vehicle.

Additional Costs Include:

• Taxes

• Mandatory liability and comprehensive insurance

• Repairs and maintenance

• Highway vignettes

• Parking and cleaning

• Tires

• Depreciation (approximately 10% annually, higher in the initial years)

Tax Treatment in Switzerland

For business vehicles, both leasing and auto subscription expenses can be deducted for tax purposes.

Fleet Management and Company Image

Maintaining a vehicle fleet involves significant administrative effort, from adhering to maintenance schedules to coordinating the fleet inventory. A modern fleet reflects the company’s image, with sustainable mobility options enhancing branding and reputation.

Environmentally Friendly Options

With increasing restrictions on combustion-engine vehicles, transitioning to electric cars is a forward-looking investment. Electric vehicle subscriptions allow businesses to test sustainable mobility flexibly.

Employee Satisfaction and Recruitment

High-quality company cars can be a decisive factor in attracting and retaining talent. Auto subscriptions enable businesses to provide flexible, private-use vehicles to employees, even during probation periods.

Corporate Branding

A company’s fleet represents its brand externally. Vehicles should align with corporate sustainability goals. Both leasing and auto subscriptions allow businesses to maintain an up-to-date, eco-friendly fleet without significant upfront costs.

Conclusion

Leasing and auto subscriptions offer viable alternatives to outright vehicle purchases for Swiss businesses. Auto subscriptions, however, stand out for their flexibility in contract terms and cost transparency, making them ideal for testing new vehicles or meeting short-term needs. With CARIFY, you can choose from an extensive selection of vehicles, including commercial options, while enjoying an all-inclusive service package that simplifies fleet management.

FAQs

What is the difference between auto leasing and a subscription?

Leasing involves a long-term commitment to a vehicle, while auto subscriptions offer more flexibility. Subscriptions also include extensive services, providing greater cost transparency.

What are the downsides of leasing for a business?

Leasing requires an upfront payment and fixed terms. Contracts cannot be easily adjusted to meet changing needs.

Why is leasing worthwhile for companies?

Leasing allows businesses to provide company cars without significant capital investment and offers the flexibility to switch to new models regularly.

What are the disadvantages of leasing?

Leasing can lead to additional costs for maintenance, insurance, and excess mileage. Vehicle return conditions can also pose challenges.