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Old 11.05.2014, 10:56
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Loan vs Leasing

Hi!

We've been living in Switzerland for 2 years now. And we want to buy a new Car (Nissan Qashqai 2014 Full Model)

We are analyzing between a leasing and asking for a loan for the rest to buy and own the car. But because we dont have any experience or much knowledge about Leasing we need some help.

I would like to make an open community analysis between both and to know your opinions and experiences.

For now, these are the things we realized, but for sure we are missing some points:

Advantages of Leasing:
- Allows you to get a new car without paying too much upfront.
- Monthly installments with a relatively low interest (around 5%).

Disadvantages of Leasing:
- You rent a car, its not yours until you finish the leasing and pay the residual value.
- If you can place an upfront payment of around 10.000 the interest is higher than in a loan.
- If you don't place big first payment the interest is higher than a loan.

Advantages of a loan:
- You can aslo get 5.8% interest (I checked money-net.ch as an example). You can also pre-pay monthly installments.
- The car is yours from the beginning.
- If you want to sell the car because you have any trouble, you can at any time.

Doubts:

Leasing: One of the things that worries us is what happens if you need to stop the leasing in the middle, lets say you start a leasing for 36 months, what if after one year you need to get out for any reason. All the money you paid is gone? Whats the cost of going out?

Leasing: Cembra for example offers for an additional fee an insurance in case you have an accident or lose your job, this is cool because it backs you up. What I don't know is for how long it would back you up, anybody knows this?

When we do an exercise of a Leasing vs a Loan, these are the interesting results:

Leasing:
Amount of Car: CHF 36.700
Upfront Payment: CHF 10.000
Monthly Payments: CHF 564
Months: 36
Residual Value: 10.0000
KM Per Year: 15.000 Km.

Total Payment: CHF 42.712
Cost of Leasing: CHF 3604

Loan:
Amount of Car: CHF 36.700
Upfront Payment: CHF 10.000
Credit for $ 27.000.
Monthly Payments: CHF 817
Months: 36
Residual Value: CHF 0.

Total Payment: CHF 39.412
Cost of Loan: CHF 2712.

Leasing Calculator we are using: https://www.cembra.ch/en/leasing/car...tor/index.html

Credit Calculator we are using:
https://www.money-net.ch/de/kredit

What do you think about the two models? Experiences with Leasing vs Loans in Switzerland?
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Old 11.05.2014, 17:48
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Re: Loan vs Leasing

Do you intend to keep the car?
High annual mileage?
Do you trash cars?

If yes to the above - loan.

Remember with a loan and actual purchase you will need to include the car as an asset on your tax AND deduct the loan interest.
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Old 11.05.2014, 18:02
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Re: Loan vs Leasing

How secure is your job? If you lose it you can sell the car and repay the loan. If you lease the car you pay up to the last day, plus the renovation.

You have managed for 2 years without a car, what is wrong with Mobility? (Apart from the colour)

Buying the car, after 3 years it will be yours, residual value a lot more than Fr 0,--
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Old 11.05.2014, 18:35
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Re: Loan vs Leasing

Hi, thanks for your comments.

We would like to keep it because I negotiated 5 years of warranty, so we should be OK with it too, and this also elevates the price of the car, I've checked that for top Nissan Qashqai 4 years old models with 75.000 Km, they are still asking for 20.000 CHF, so I think depreciation seems to be a little bit slower that in a "cheap" car.

We've been driving old cars since we arrived, some old cars that we bought for 500 CHF each, but also we had to spend a lot of money on Garage for repairing between the two of them we spended at least CHF 3000 in repairs. Now I got rid of the oldest one that had 235.000 Km! and we want to replace it with a car without headaches, no high cost repairing, etc. We want to start travelling within Switzerland and neighbour countries.

I think I will go for the loan, I like the possibility that at any potential problem I can just sell the car and we recover some money.

In regards of taxes, what happens when I am being taxed at origin, I have a EU passport but during the first 5 years my taxes are deducted from my salary and paid by my employer. Can I still apply the credit interest to my taxes?

Thanks for your help!
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Old 12.05.2014, 22:45
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Re: Loan vs Leasing

Maybe this is an answer, http://www.englishforum.ch/items-sal...-zollikon.html
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Old 13.05.2014, 06:55
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Re: Loan vs Leasing

Thanks for the tip, I also get a nice company discount for the 2014 model which has been completely renewed inside (nicer) unfortunately my wife doesn't like white cars 😟 otherwise I would really consider it. Thanks anyways
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