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Old 02.06.2015, 20:01
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Car leasing calculator question

As I prepare to move to Switzerland, I've been starting to do some research on what type of car I'd like to lease while we are there that fits into the budget. Aside from being absolutely shocked at how ridiculously more expensive cars are in Switzerland, I'm having some trouble figuring out how much a lease would actually cost me.

As an example, I was dreamily wondering if I could afford a nice BMW 3-series touring priced at ~70'000 CHF. When I look at the BMW calculator (on the Swiss site), it says my monthly payment would be ~1'000 CHF, after a ~5,000 CHF down payment with standard interest rate of 3.9% (4 year lease, 15'000 km).

However, when I put the same values into the comparis.ch site, it tells me my payment would be ~800 per month, assuming the same terms at a residual of 50% (which seems perhaps low by US standards). That's a pretty big difference in my book!

What am I missing? Is there some tax liability I am overlooking? Or are the residuals in Switzerland incredibly low (it doesn't seem it, because when I look for used cars 3-4 years old, the value seems to be 50-60% of a new vehicle).

As a follow on, I'd love to better understand all of the tax implications of leasing a new car. From what I can tell, I would just have to pay the road tax (~40 CHF) and a tax based on the size of my engine (somewhere from 300-500 CHF). It doesn't look like there are property taxes or the like, although perhaps I've missed that.

Thanks!
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Old 02.06.2015, 20:15
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Re: Car leasing calculator question

Sounds about right.

And if you only put 5k down you'll always be behind the curve and if you want to get out of the lease you'll be looking at a hefty payment.

General advice is 20% down, final payment of 30-35% - and then base the payment off that.
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Old 03.06.2015, 16:09
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Re: Car leasing calculator question

Hi there,

as being just recent bmw buyer and already being twice under a bmw leasing contract; I can tell you that in BMW leasing calculator you cant see the rest value and cost of financing. So it depends how it is calculated from the first place.

I can give you the tip;

1- The price in the bmw switzerland configurators are before the discounts, there are for sure up to 10% or whatever you can bargain reduction of those prices. It is even mentioned in the configurator.

2- if you would like to do a precise calculation, google as "leasingrechner", then in the results you will see the link with the one toolsdatahouse etc.
That gives quite precise to the real life calculation and you can play around and see what do you want for your leasing contract.

you can PM me if you need detail questions regarding to bmw leasing contracts

cheers
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Old 03.06.2015, 16:39
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Re: Car leasing calculator question

Thanks dblacklion! That is very helpful. When I plug the numbers into the calculator you pointed me to, I get the same results as comparis.ch, which is a nice gut check.

One quick follow up:

What is a standard residual for a BMW on a 48 month lease (assume 15'000 km per year)? I'm seeing prices advertised for 3-4 year old BMWs that suggest a residual of 50%+. But is that realistic, or is that where the dealerships get you? E.g., if I back out what the BMW Konfigurator calculates, it seems they are assuming something like a 33% residual, which strikes me as ridiculously low. (By comparison, in the US for a 3 year, 12,000 mile lease, I think BMW usually has residuals in the 60% level. So 50% for another year seems to make sense).

Is BMW's calculator just for the suckers who don't do their homework and will pay anything, or is BMW really able to get away with charging people outrageous leases in Switzerland?

Thanks again!
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Old 03.06.2015, 16:41
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Re: Car leasing calculator question

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Thanks dblacklion! That is very helpful. When I plug the numbers into the calculator you pointed me to, I get the same results as comparis.ch, which is a nice gut check.

One quick follow up:

What is a standard residual for a BMW on a 48 month lease (assume 15'000 km per year)? I'm seeing prices advertised for 3-4 year old BMWs that suggest a residual of 50%+. But is that realistic, or is that where the dealerships get you? E.g., if I back out what the BMW Konfigurator calculates, it seems they are assuming something like a 33% residual, which strikes me as ridiculously low. (By comparison, in the US for a 3 year, 12,000 mile lease, I think BMW usually has residuals in the 60% level. So 50% for another year seems to make sense).

Is BMW's calculator just for the suckers who don't do their homework and will pay anything, or is BMW really able to get away with charging people outrageous leases in Switzerland?

Thanks again!
Did you ignore my post deliberately? Or because you didn't like the answer?
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Old 03.06.2015, 16:56
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Re: Car leasing calculator question

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Is BMW's calculator just for the suckers who don't do their homework and will pay anything
Probably, that's why things like Comparis exist.

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or is BMW really able to get away with charging people outrageous leases in Switzerland?
Also probably - get used to it before you arrive!
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Old 03.06.2015, 17:37
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Re: Car leasing calculator question

dodgyken, I didn't respond because your response didn't really address my specific questions. and i Kan reed goud, think u.

I'm trying to determine the total cost of a 4 year lease, and why comparis.ch (and other sites) suggest a total cost of ~10'000 CHF less than BMW's website. That's a big difference. How to structure the lease is another question, but I'm more interested in the total cost (and how that is built up) to determine what can fit into my budget, and also what levers I can pull to negotiate the best possible deal.
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Old 03.06.2015, 20:28
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Re: Car leasing calculator question

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dodgyken, I didn't respond because your response didn't really address my specific questions. and i Kan reed goud, think u.

I'm trying to determine the total cost of a 4 year lease, and why comparis.ch (and other sites) suggest a total cost of ~10'000 CHF less than BMW's website. That's a big difference. How to structure the lease is another question, but I'm more interested in the total cost (and how that is built up) to determine what can fit into my budget, and also what levers I can pull to negotiate the best possible deal.
If you want to ensure you aren't behind the depreciation curve - pay 20% upfront and have a final figure of 30-35% at the end of 4 years. The actual monthly will depend on the insurance and the amount of the lease.

It is that simple. The days of 40-50% final payments on 4 year leases are long gone - lease companies got really badly burned over the last few years as currency shifts have caused new prices to drop.

At 5% following the basics above a 40k car will cost you 500chf per month (give or take). At 3% a 60k car will be 650chf (give or take). A few year ago you'd reckon on 1% of the car price per month over 4 years.
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Old 04.06.2015, 00:25
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Re: Car leasing calculator question

Got it dodgyken - so we are talking a 45-50% residual after 48 months, assuming a 20% down payment and then monthly payments totaling 30-35%. That's a really high down payment by US standards, but I guess I'll have to see what they are willing to do. I'm not super concerned about having a payment to get out of the lease early, as my company will cover some of that loss if it occurs, but it's something I should at least look at.
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Old 04.06.2015, 07:50
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Re: Car leasing calculator question

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Got it dodgyken - so we are talking a 45-50% residual after 48 months, assuming a 20% down payment and then monthly payments totaling 30-35%. That's a really high down payment by US standards, but I guess I'll have to see what they are willing to do. I'm not super concerned about having a payment to get out of the lease early, as my company will cover some of that loss if it occurs, but it's something I should at least look at.
So you haven't got it have you???

For the third time: 20% deposit and a FINAL payment of 30-35%. Which means your monthly payments cover the rest. No one gives 2 hoots about the US - this is not the US, never has been and never will, if you want to have 199$ a month leases shuffle on over to "your Tri-counties Chevrolet dealer for the greatest deal on a 2016 Malbu you'll find"

These figures are approximate and use BMW finance's current rate (5.11%) and a 33% 4yr residual (BMW have 5 classifications giving different final rates - I suspect an X3 2.0D would be closer to 40% and a 750i closer to 30%)

40k; 8k deposit; 48*485; final payment of 13,200
50k; 10k deposit; 48*610; final payment of 16,500
60k; 12k deposit; 48*730; final payment of 18,150
70k; 14k deposit; 48*850; final payment of 23,100

If you pay a lower deposit, dealers would prefer a minimum of 10%, your monthly will go up. The 30-35% is based on 10-12k KM per year - if you go for a higher number that % drops.

If you don't pay 20% deposit and you want to sell before the end of the lease you will almost certainly have an outstanding lease amount greater than the value of the car.
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Old 04.06.2015, 09:14
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Re: Car leasing calculator question

I never put money down on a lease. If you total the car you lose your deposit, at least that is what I was made believe.


And yes, if you cannot afford getting out of a lease in an emergency your car is too expensive.


You can negotiate 20-30% discount on new cars at the moment. Residual is based on list price so your lease cost will go down if you negotiate well. My tactic is first to negotiate the price of the car, and to then reveal how I will pay for it.
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Old 04.06.2015, 10:22
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Re: Car leasing calculator question

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I never put money down on a lease. If you total the car you lose your deposit, at least that is what I was made believe.


And yes, if you cannot afford getting out of a lease in an emergency your car is too expensive.


You can negotiate 20-30% discount on new cars at the moment. Residual is based on list price so your lease cost will go down if you negotiate well. My tactic is first to negotiate the price of the car, and to then reveal how I will pay for it.

You loose your deposit as the car has depreciated. Totalling the car won't necessarily get you off the hook either as the insurance will pay out market value.
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Old 04.06.2015, 10:42
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Re: Car leasing calculator question

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You loose your deposit as the car has depreciated. Totalling the car won't necessarily get you off the hook either as the insurance will pay out market value.
If leasing the voll-kasko part will pay enough to cover the cost of the oustanding lease.

Looking at a table from Allianz I can see the maximum payout amounts start at 90-100% for a car in its first year to 74-82 in the 3rd years and 45-51 in the 7th year. There after it is the market value + 20% - upto 95% of the new value.
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Old 04.06.2015, 21:33
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Re: Car leasing calculator question

Final payment = residual value / lease-end purchase option price / balloon payment. In my experience, a final payment is your last lease payment, plus any penalties for damage and/or being over mileage. So when I saw 30-35% as a final payment that seemed outrageously high, thus the source of my confusion regarding a few responses. (But it seemed too low for a residual...)

I’m surprised by the very low residual of ~33% on a 4 year old vehicle with fewer than 60’000 km. Even looking at used cars, it seems that 4 year old cars are being advertised for prices closer to 50% of the original new price (whether or not they actually get those prices I don’t know). That was essentially my original question: is a 33% residual truly as good as you can get in the Swiss lease market? Currency shifts may be driving new prices down, but it still seems odd to be using residuals that are well below market (if the used car prices are even close to believable).

Thanks for the insights, especially regarding the ability to negotiate down the price significantly. If residual is based off of list, certainly that helps matters.
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Old 05.06.2015, 07:43
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Re: Car leasing calculator question

There are a couple of factors you need to consider:
- Labour costs are high in Switzerland
- Customer demands (in the used market) are high

Therefore the cost to prepare a car for the used market, at a main dealer (IE a 4yr old 60k km model) is relatively high (retail cost of a BMW warranty is 1600chf per year) this means that there is a substantial difference between the trade-in value and the sales price.

Finally, at the end of the lease if the final payment is not paid the selling dealer is obliged to take back the vehicle. Additionally, at any point in the lease, if you choose to hand back the car (IE not part-exchange it) that dealer has first option on the car. Dealers got badly stung a few years back offering far too high final payment values.

The market also "uses" credit in a different way here, buyers tend to be more savvy on how the value of the car matches the outstanding debt - a small payment and large residual may mean that there could be an unexpectable financial blip if something goes wrong.

A worked example:
Ueli goes into a dealer and buys a new car - we'll keep with a BMW for the moment. Nothing too fancy but well specced, after all it is Switzerland, so a 328i saloon sounds about right.

The thing is, Ueli is an AVP in a big bank and is getting a discount, so:

80k retail price
65k actual price paid (after discount)
13k deposit
19.5k final payment/residual
825chf per month for 48mths

Just under 4 years later Ueli sees that the lease is up and goes back to the same dealer and looks at another 328i - maybe with a few different options - again coming in at 80k retail - and with a discount bringing it back down to 65k.

The dealer "knows" that if he put the car up on the forecourt for 40k it should sell within their "acceptable timeframe". He budgets into that a fresh service, possible 2 new tyres, an MFK, respray any stone chips, repair the wheels and most probably a 2 year warranty - and of course some profit. They shake hands on 29k part-ex.

Ueli uses his old car and 3.5k of cash and he drives off in a brand new car.
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Old 05.06.2015, 22:11
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Re: Car leasing calculator question

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is BMW really able to get away with charging people outrageous leases in Switzerland?
It is not just BMW!
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