Go Back   English Forum Switzerland > Help & tips > Transportation/driving  
Reply
 
Thread Tools Display Modes
  #1  
Old 21.11.2007, 10:56
bozothedeathmachine's Avatar
Senior Member
 
Join Date: Apr 2007
Location: Arni, AG
Posts: 324
Groaned at 0 Times in 0 Posts
Thanked 177 Times in 82 Posts
bozothedeathmachine is considered knowledgeablebozothedeathmachine is considered knowledgeablebozothedeathmachine is considered knowledgeable
Lease to own: mileage limit?

We're leasing a car, but we will eventually own it. We set the restvalue as low as we could (1,000CHF) so we can pay it off easily at the end of the term. How does the mileage limit work since we're going to own it? Is that something that's checked yearly or at the end of the term? Who checks it?

I can't imagine having to mind the limit if we're just going to end up owning it anyway.

Does anyone have any experience with this?

Thanks..
Reply With Quote
  #2  
Old 21.11.2007, 10:59
Forum Legend
 
Join Date: Jan 2007
Location: Geneva
Posts: 5,531
Groaned at 123 Times in 108 Posts
Thanked 3,297 Times in 1,737 Posts
Shorrick Mk2 has a reputation beyond reputeShorrick Mk2 has a reputation beyond reputeShorrick Mk2 has a reputation beyond reputeShorrick Mk2 has a reputation beyond reputeShorrick Mk2 has a reputation beyond reputeShorrick Mk2 has a reputation beyond repute
Re: Lease to own: mileage limit?

The mileage only comes into account (rather expensively) if you return the car after leasing.

If not, you need to settle the residual value at the end of the lease and you're a happy camper.
Reply With Quote
  #3  
Old 21.11.2007, 11:03
AbFab's Avatar
Forum Legend
 
Join Date: Sep 2006
Location: Zürich
Posts: 7,941
Groaned at 337 Times in 228 Posts
Thanked 11,189 Times in 3,878 Posts
AbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond repute
Re: Lease to own: mileage limit?

Leasing a Car in Switzerland
Reply With Quote
  #4  
Old 21.11.2007, 11:03
ddejay's Avatar
Member
 
Join Date: Mar 2007
Location: USA
Posts: 145
Groaned at 0 Times in 0 Posts
Thanked 24 Times in 18 Posts
ddejay has slipped a little
Re: Lease to own: mileage limit?

i can confirm shorrick's view - this is what happened when we leased, and then ultimately purchased outright, our car....
Reply With Quote
  #5  
Old 21.11.2007, 14:04
miniMia's Avatar
Forum Legend
 
Join Date: Apr 2007
Location: romandie
Posts: 9,993
Groaned at 101 Times in 92 Posts
Thanked 9,106 Times in 4,522 Posts
miniMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond repute
Re: Lease to own: mileage limit?

We leased to own. Our residual value was set at CHF0 and the kilometers were not an issue. When we made the last payment, the leasing company (automatically) sent us a letter stating they give up all claims to the car.
Reply With Quote
  #6  
Old 21.11.2007, 14:23
Forum Legend
 
Join Date: May 2005
Location: Luzern currently
Posts: 2,565
Groaned at 3 Times in 3 Posts
Thanked 720 Times in 373 Posts
Richard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond repute
Re: Lease to own: mileage limit?

Its nice that everyone does not think of maybe why the mileage limit is there...

If you look in your leasing contract you will see a value table that determines the value of your car at any stage of the contract. Often it is a percentage table showing how much the car is worth at point x as a percentage of the initial purchase price. Why is that relevant? And why is Shorricks answer not quite right?

The stated mileage per year is a straight line accumulation from delivery to return (or take over). If you see the lease to the end then you can give it back or take it over. If the mileage is at that point above the limit they can charge you xRp per kilometre for every kilometre above the limit to a cap of the difference between the value in this table and the amount the garage pay for the car.

If however you die or need to leave the country or for some other reason cannot complete the lease term then they use the table and the straight line mileage calculation to calculate how much you owe for an early return. This is often expensive as Shorrick so rightly says... Interestingly they also give you a rebate for being below the stated mileage but don't believe it will be anywhere near as much as being above
Reply With Quote
  #7  
Old 21.11.2007, 14:58
miniMia's Avatar
Forum Legend
 
Join Date: Apr 2007
Location: romandie
Posts: 9,993
Groaned at 101 Times in 92 Posts
Thanked 9,106 Times in 4,522 Posts
miniMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond repute
Re: Lease to own: mileage limit?

Quote:
View Post
Its nice that everyone does not think of maybe why the mileage limit is there...

If you look in your leasing contract you will see a value table that determines the value of your car at any stage of the contract. Often it is a percentage table showing how much the car is worth at point x as a percentage of the initial purchase price. Why is that relevant? And why is Shorricks answer not quite right?

The stated mileage per year is a straight line accumulation from delivery to return (or take over). If you see the lease to the end then you can give it back or take it over. If the mileage is at that point above the limit they can charge you xRp per kilometre for every kilometre above the limit to a cap of the difference between the value in this table and the amount the garage pay for the car.

If however you die or need to leave the country or for some other reason cannot complete the lease term then they use the table and the straight line mileage calculation to calculate how much you owe for an early return. This is often expensive as Shorrick so rightly says... Interestingly they also give you a rebate for being below the stated mileage but don't believe it will be anywhere near as much as being above
Yes, what you say is of course true. and luckily I didn't die before I paid off the car. We did put in a number (I think it was 20K per year).

But in a practical sense it didn't matter. As I said, when we made the last payment I got a letter from the leasing company and no one checked or asked the number of kms on the car.
Reply With Quote
  #8  
Old 21.11.2007, 14:59
Lob's Avatar
Lob Lob is offline
Forum Legend
 
Join Date: Nov 2005
Location: -
Posts: 7,814
Groaned at 45 Times in 40 Posts
Thanked 1,973 Times in 1,060 Posts
Lob has a reputation beyond reputeLob has a reputation beyond reputeLob has a reputation beyond reputeLob has a reputation beyond reputeLob has a reputation beyond repute
Re: Lease to own: mileage limit?

the form from the lease company when the lease is paid off is also important. Take this and the car papers to the local car registration office so that the car can be declared no longer under lease. Send a copy of this to your insurance person too and you might see insurance go down.....
Reply With Quote
  #9  
Old 21.11.2007, 15:19
Salsa_Lover
 
Posts: n/a
Re: Lease to own: mileage limit?

Quote:
View Post
Yes, what you say is of course true. and luckily I didn't die before I paid off the car. We did put in a number (I think it was 20K per year).

But in a practical sense it didn't matter. As I said, when we made the last payment I got a letter from the leasing company and no one checked or asked the number of kms on the car.
miniMia, they don't check the Kms on the car when everything goes well.

In the case something goes wrong, for example, you had an accident and the car is declared "beyond repair" or you just have to give it back, they'd calculate the residual value of the car according to their abusive formulas and add to this the extra depreciation you made of the car by running it more than allowed, which is charged about c/.70 / Km and then you'll have trouble.

I had a car on leasing, it was a cabriolet and everything was going well, my plans were to keep the car at the end, the Leasing thing was only to have a financing of it.

But one day in the highway there was an accident and the traffic speed went down fast, then after the accident place we accelerate but suddenly we had to drop the speed again down to 80Kmph, but the car behind me didn't saw it and crashed his car into my trunk.

The car was is mint condition, only used by around 1 year, but as I had to do Zurich-Geneva-Zurich often I had more km than allowed.

It was not my fault. The insurance took in charge the car and declared it "beyond repair" as the chasis has been damaged, and simply calculated the residual value and paid the leasing company. But the leasing company made their own calculation and determined that my car depreciation was higher so at the end the contract was simply dissolved and I got just CHF 1200 back. After a year of paying 650 CHF / month of leasing, plus the initial leasing payment ( about 2500 ) !.

They graciousely offered to give me a new car and start a new leasing, but I didn't took it.

This teached me a lesson. Never again leasing.
Reply With Quote
This user would like to thank for this useful post:
  #10  
Old 21.11.2007, 15:22
miniMia's Avatar
Forum Legend
 
Join Date: Apr 2007
Location: romandie
Posts: 9,993
Groaned at 101 Times in 92 Posts
Thanked 9,106 Times in 4,522 Posts
miniMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond repute
Re: Lease to own: mileage limit?

Quote:
View Post
the form from the lease company when the lease is paid off is also important. Take this and the car papers to the local car registration office so that the car can be declared no longer under lease. Send a copy of this to your insurance person too and you might see insurance go down.....
Yes! the insurance certainly does go down!
Reply With Quote
  #11  
Old 21.11.2007, 15:27
Forum Legend
 
Join Date: May 2005
Location: Luzern currently
Posts: 2,565
Groaned at 3 Times in 3 Posts
Thanked 720 Times in 373 Posts
Richard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond repute
Re: Lease to own: mileage limit?

Quote:
View Post
miniMia, they don't check the Kms on the car when everything goes well.

In the case something goes wrong, for example, you had an accident and the car is declared "beyond repair" or you just have to give it back, they'd calculate the residual value of the car according to their abusive formulas and add to this the extra depreciation you made of the car by running it more than allowed, which is charged about c/.70 / Km and then you'll have trouble.

I had a car on leasing, it was a cabriolet and everything was going well, my plans were to keep the car at the end, the Leasing thing was only to have a financing of it.

But one day in the highway there was an accident and the traffic speed went down fast, then after the accident place we accelerate but suddenly we had to drop the speed again down to 80Kmph, but the car behind me didn't saw it and crashed his car into my trunk.

The car was is mint condition, only used by around 1 year, but as I had to do Zurich-Geneva-Zurich often I had more km than allowed.

It was not my fault. The insurance took in charge the car and declared it "beyond repair" as the chasis has been damaged, and simply calculated the residual value and paid the leasing company. But the leasing company made their own calculation and determined that my car depreciation was higher so at the end the contract was simply dissolved and I got just CHF 1200 back. After a year of paying 650 CHF / month of leasing, plus the initial leasing payment ( about 2500 ) !.

They graciousely offered to give me a new car and start a new leasing, but I didn't took it.

This teached me a lesson. Never again leasing.
There is of course a way to avoid this problem in that you can take Insurance with depreciation against time. This is the normal insurance you need for Leasing cars and for cars of high value... If you do not have it then you might learn a lesson for next time...


Here is a table from Winterthur showing depreciation against time:

ZeitwertzusatzDank dem Zeitwertzusatz erhalten Sie bei Totalschaden eine Entschädigung, welche höher ist als der Wert Ihres Fahrzeugs beim Schadenszeitpunkt.

Die Entschädigung ist nach den Betriebsjahren wie folgt abgestuft:

BetriebsdauerVersicherter Fahrzeugwert in %
im 1. Jahr 95 - 90
im 2. Jahr 90 - 80
im 3. Jahr 80 - 70
im 4. Jahr 70 - 60
im 5. Jahr 60 - 50
im 6. Jahr 50 - 45
im 7. Jahr 45 - 40
im 8. Jahr Zeitwert
Reply With Quote
  #12  
Old 21.11.2007, 15:30
miniMia's Avatar
Forum Legend
 
Join Date: Apr 2007
Location: romandie
Posts: 9,993
Groaned at 101 Times in 92 Posts
Thanked 9,106 Times in 4,522 Posts
miniMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond repute
Re: Lease to own: mileage limit?

Quote:
View Post
miniMia, they don't check the Kms on the car when everything goes well.


This teached me a lesson. Never again leasing.
(MM: original message snipped, see above)

Thanks so much for adding this. It's true it seems we were lucky. I hadn't thought of any of those things. Something to think about for next time (if there is one! )

Last edited by miniMia; 21.11.2007 at 15:57.
Reply With Quote
  #13  
Old 21.11.2007, 15:40
Member
 
Join Date: Nov 2006
Location: England and CH1844
Posts: 185
Groaned at 0 Times in 0 Posts
Thanked 17 Times in 13 Posts
clive7 has made some interesting contributions
Re: Lease to own: mileage limit?

Is the rate of interest charged by the car leasing companies in Switzerland higher or lower than the rate a bank would offer for a car purchase loan? If higher, why lease? Is it the residual value 'guarantee' which is attractive?
Reply With Quote
  #14  
Old 21.11.2007, 15:42
Forum Legend
 
Join Date: May 2005
Location: Luzern currently
Posts: 2,565
Groaned at 3 Times in 3 Posts
Thanked 720 Times in 373 Posts
Richard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond repute
Re: Lease to own: mileage limit?

Quote:
View Post
Is the rate of interest charged by the car leasing companies in Switzerland higher or lower than the rate a bank would offer for a car purchase loan? If higher, why lease? Is it the residual value 'guarantee' which is attractive?
Its typically about 4-6% lower...
Reply With Quote
  #15  
Old 21.11.2007, 15:45
Lob's Avatar
Lob Lob is offline
Forum Legend
 
Join Date: Nov 2005
Location: -
Posts: 7,814
Groaned at 45 Times in 40 Posts
Thanked 1,973 Times in 1,060 Posts
Lob has a reputation beyond reputeLob has a reputation beyond reputeLob has a reputation beyond reputeLob has a reputation beyond reputeLob has a reputation beyond repute
Re: Lease to own: mileage limit?

there is largely nothing called a "car loan" IIRC. You can get a loan from a bank, though.

lease rates you might find around 4-5% - or less - if you're lucky. Typically the residual value will be low market value - and you could sell privately for more (money and hassle). You might find your company will do you a cheap lease - for example UBS offers all employees leases through Alphabet.

Leased cars must have fully comprehensive insurance.

The reason you see many Porsches and so on is often the person leases the bare minimum amount possible - ie. to never own, do as few km as possible, etc. So not everyone is as "loaded" as they look
Reply With Quote
  #16  
Old 21.11.2007, 15:53
Salsa_Lover
 
Posts: n/a
Re: Lease to own: mileage limit?

clive,

the fact is that those are two different things.

When buying through a credit, the bank gives you the money, you buy the car. then you owe money to the bank and the car is yours. Probably the car could be seized if you don't pay. you are charged an interest for a credit.

When leasing, the leasing company buys the car and rents it to you, the car belongs to the leasing company, you pay a monthly ammount that involves the car rental and an amortization to buy the car at the end of the leasing contract.

The thing is that the leasing companies uses exponential formulas to calculate those 2 components. So at the beginning of the leasing contract you are paying mosty rent and fees and little amortization and this inverts at the end of the contract.

But you should also take into account the car depreciation. They use another exponential formula so the car value goes down fast at the begining of the lease and then goes down slowly until it reaches the residual value in the contract ( that could be 0 ).

So if everything goes well, at the end of the contract your car worths nothing or very little for the leasing company, so you can keep it.

But if you have to stop the leasing at the beginning of the contract you'll find yourself with a car with a little value ( as the depreciation put down fast the value of it ) and your amortization is also little ( as at the beginning what you pay is mostly rent and not amortization ). But you received a car worth full value so you have to pay back the difference.

Result. the case I described earlier.


The leasing contract reaches an equilibrium point around past the middle of the period in which what you paid is what you have.. but not before.
Reply With Quote
  #17  
Old 21.11.2007, 15:55
miniMia's Avatar
Forum Legend
 
Join Date: Apr 2007
Location: romandie
Posts: 9,993
Groaned at 101 Times in 92 Posts
Thanked 9,106 Times in 4,522 Posts
miniMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond repute
Re: Lease to own: mileage limit?

Quote:
View Post
Is the rate of interest charged by the car leasing companies in Switzerland higher or lower than the rate a bank would offer for a car purchase loan? If higher, why lease? Is it the residual value 'guarantee' which is attractive?
We went with a lease when we bought a new mini because the interest rate at the time was 1.9%. I don't remember exactly, but the rate for getting a loan was about 8%.

There are other things to consider as LR says, the insurance on a leased car is more expensive than if you buy the car & pay off your loan with the bank. We ask our insurance agent to quote both options and although the rate for leased was higher, monthly we paid less due to the low lease interest rate.

I heard something recently about being able to deduct the interest from a bank loan. But since it wasn't our case I didn't pay attention. Anyone know about this?
Reply With Quote
  #18  
Old 21.11.2007, 21:20
swissbob
 
Posts: n/a
Re: Lease to own: mileage limit?

Quote:
View Post
I heard something recently about being able to deduct the interest from a bank loan. But since it wasn't our case I didn't pay attention. Anyone know about this?
You can deduct just about any debt interest (except maybe interst on your tax ).

I found leasing to be a cheaper option overall than a loan but then I got a real bargain on an ex demo with the dealer offering a much lower price if I took the lease and helped his figures with the brand owned leasing company .
Reply With Quote
Reply




Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
[Speeding] Way over the limit telandy Transportation/driving 144 06.03.2008 16:56
Height Limit Zurich Airport swissbob Other/general 5 16.07.2007 16:11
Mileage reimbursement rate for expenses snoozeboy Employment 3 12.04.2007 12:35
Apartment/Flat Lease Lengths Music Mole Other/general 6 08.09.2006 18:40


All times are GMT +2. The time now is 10:17.


Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2021, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0