How does leasing work in Switzerland? Our complete guide

With car leasing, you can drive a new car without spending a large sum of money. In addition, you have the option between different leasing variants and can exchange your leased vehicle for a newer model at the end of the contract period. 

Mobile in Switzerland with leased vehicles

If you pay cash, you always get the cheapest deals when buying a car and can sometimes look forward to attractive additional services from the garage. Given the high acquisition costs for new vehicles or young used cars, many dealers in Switzerland offer attractive installment models for credit financing of your new dream car in addition to full payment. If the latter is your choice, a leasing contract may also interest you.

You pay a monthly leasing rate, and you can use the vehicle as if it were your own, whether it's a VW, Fiat or any other model.

The advantage of a leased car is that you do not have to pay for depreciation. Company cars are often leased because of several tax advantages, although unfortunately, this does not apply to private vehicles. By the way, you can also lease motorcycles in Switzerland.

Term leasing or residual value leasing - which is better?

With all the different leasing models, it's easy to lose track. So we'll tell you the differences between the most common of them:

• Term leasing: Leasing contracts usually run between 12 months and four years. The longer the term, the lower the rate. In return, however, you commit yourself for a corresponding period of time. When the leasing contract ends, the vehicle is returned to the garage owner as lessor.

• Kilometer leasing: The leasing rate is calculated from the expected mileage in kilometers. Frequent drivers use the vehicle more and therefore pay a higher leasing rate. If in doubt, it is better to specify the higher level. If you have driven more kilometers than agreed at the end of the contract, you will have to pay extra.

• Residual value leasing: This allows you to buy the vehicle at the end of the leasing contract. This must be explicitly stated in the contract. You then only have to pay a predefined residual sum for the vehicle. So instead of buying a pig in a poke, as with a used car, you already know the vehicle and are aware of any defects. But be careful; residual value and current value are different. A high residual value lowers the installment burden but leads to a higher purchase price than the current value. You can arrange follow-up financing for this in advance.

What does leasing cost in Switzerland?

Here are a few examples of leasing costs with residual value and kilometers for various terms and interest rates:

What are the disadvantages of car leasing?

Even though leasing is a flexible way to use a new car at an installment price, it has some pitfalls:

• Contract commitment: Once you've signed the contract, you're bound to it. You can get out of the leasing contract before the end of the contract period, but there are considerable penalties for doing so in Switzerland.

• Comprehensive insurance: You are obliged to take out comprehensive insurance for your leased vehicle at your own expense, which is also a burden on your budget. In addition, the insurance premium for leased vehicles may be higher than for a purchased (new) car. In any case, an extensive comparison of providers and prices is recommended.

• Restrictions: Other restrictions are sometimes hidden in the fine print, such as the ban on driving the leased vehicle abroad. With mileage leasing, you commit to a maximum mileage during the leasing period.

• Regular services and checks: You must have your leased vehicle serviced at your own expense at specified intervals. However, you may only commission partner garages specified by the lessor to do this. Which services are included and how often you have to have them done is specified in the contract. Contracts with included maintenance services have a higher leasing rate.

• Costs: Even if the leasing interest rates seem low, you can fall into a cost trap due to the additional obligations mentioned above. In addition, you have to pay for the vehicle tax yourself.

• Lack of tax incentives: While, as a private individual, you can claim the interest on a consumer loan against tax, this does not apply to the leasing rates of your vehicle.

Often, financing through a consumer loan is worthwhile despite the supposedly lower interest rates. In addition to attractive discounts from the garage owner, you can choose the type of comprehensive insurance and the most favorable provider.

These are the advantages of a car subscription

At CARIFY, we offer you a great alternative to buying or leasing: a subscription model. As Switzerland's No. 1 car subscription provider, we offer you the largest selection of new and used cars. In addition, we work with local partner garages and thus support the Swiss economy.

With us, you also pay in convenient monthly installments, but we also offer you many other advantages:

• No hidden fees; we focus on transparency

• No start fee, no down payment

• Flexible subscription period from 1 to 48 months

• Flexible monthly mileage models

• Car dealer warranty

• Everything included: taxes, registration, maintenance, tire change, comprehensive insurance, vignette

• Roadside assistance around the clock

• Replacement car in case of breakdown

• Free cancellation at the end of the minimum contract period

• Optional purchase after subscription

• And if there's ever a problem, our dedicated customer service will be happy to help you

Conclusion

The cheapest way to drive in Switzerland is to pay cash for your new car. But not everyone has that much cash on hand. As soon as you have to finance the purchase price with a loan, interest on the loan is added and makes your vehicle more expensive. For a long time, the only alternative was to lease your car. However, complicated calculations, contractual commitment and hidden costs quickly make this type of car rental very expensive.

You are much more flexible and up-to-date with a subscription model because you don't have to commit yourself for years. Instead, you can rent a minivan for a family vacation or treat yourself to the experience of gliding along the roads in a Porsche. We have everything from compact cars to luxury sleds and are constantly getting new models, boasting a diverse range of horsepower capabilities. After all, we have over 150 reliable partners throughout Switzerland.

The best thing about it is that you can cancel the subscription at the end of the month after the minimum contract period without any fees. The longer the minimum contract period, the lower the monthly rates.

If you choose a car subscription with CARIFY, we will even deliver your dream car to your doorstep for a small fee (in Switzerland and Liechtenstein).