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Old 22.10.2020, 19:48
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Re: Car leasing vs buying

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I can invest my cash and get more than 0.9%,
Can you? Not without risk, these days.

In any case, I'm pretty sure the extra cost of all the garage maintenance at Swiss main dealer prices compared with what you'd _really_ deem necessary if you owned the car will more than swallow up the difference.

Always assuming that your .9% is based on something concrete, rather than just plucked out of the air as an approximate cost.
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Old 22.10.2020, 20:09
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Re: Car leasing vs buying

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Can you? Not without risk, these days.

In any case, I'm pretty sure the extra cost of all the garage maintenance at Swiss main dealer prices compared with what you'd _really_ deem necessary if you owned the car will more than swallow up the difference.

Always assuming that your .9% is based on something concrete, rather than just plucked out of the air as an approximate cost.
0.9% is a not abnormal leasing rate these days.

Don‘t new cars generally come with ‚free‘ servicing where you just pay for the fluids these days?
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Old 22.10.2020, 20:30
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Re: Car leasing vs buying

I have used leasing contracts as a way to finance a car for less money than any other financing model... because the bank gets the car as a security. So yes, you can use leasing deals to get your hands on new cars you couldnt buy in cash like a lot of not so smart people do. Or you can use the same tool to improve your cash flow and save on interest. The intention and details make all the difference.
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Old 22.10.2020, 20:47
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Re: Car leasing vs buying

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0.9% is a not abnormal leasing rate these days.

Don‘t new cars generally come with ‚free‘ servicing where you just pay for the fluids these days?
Yea and the air filter never gets changed unless you want to pay for an out of service option.
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Old 22.10.2020, 23:13
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Re: Car leasing vs buying

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Can you? Not without risk, these days.

In any case, I'm pretty sure the extra cost of all the garage maintenance at Swiss main dealer prices compared with what you'd _really_ deem necessary if you owned the car will more than swallow up the difference.

Always assuming that your .9% is based on something concrete, rather than just plucked out of the air as an approximate cost.
If I decide that the market is too risky, then I won't invest and still have the cash.

If I buy it cash, I would still go to the same garage for maintenance. In any case, these days all new cars come with free servicing.

Many dealers offer 0.9%. My current car was bought for almost 30% discount from list price (which is actually not so unusual) and is on a 0.9% lease.
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Old 23.10.2020, 00:30
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Re: Car leasing vs buying

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Asking for a friend: can I add a winch to a leased car?

a nice big one to bail out the bank next time they get into trouble
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Old 23.10.2020, 00:30
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Re: Car leasing vs buying

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I have used leasing contracts as a way to finance a car for less money than any other financing model... because the bank gets the car as a security. So yes, you can use leasing deals to get your hands on new cars you couldnt buy in cash like a lot of not so smart people do. Or you can use the same tool to improve your cash flow and save on interest. The intention and details make all the difference.
So does the fact that the car acts as security make banks more open to approving a lease for someone who has, let's say, a temporary 1 year job contract with a B permit.

Unfortunately, my contract just moved from fixed to temporary but on a positive, I've been in Switzerland since 2012 (if that helps). Would a 36month lease be hard to come by?
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Old 23.10.2020, 06:42
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Re: Car leasing vs buying

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Would a 36month lease be hard to come by?
Signing a 36 months lease should not be a problem.
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Old 23.10.2020, 11:29
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Re: Car leasing vs buying

Arriving late to the party

First, be patient and don't sign anything yet. There's a recent thread about another EFer that signed the contract to be investigated for a car loan, then changed his mind (did not buy the car) and now he's unable to get another credit https://www.englishforum.ch/finance-...-any-loan.html

Another topic is the leasing contract by itself. For example I have a 4 year leasing but the service warranty is for 3 years. I'll have to pay the last year as extended warranty. Not big trouble but better have this clear since the start. For a 3 year, lease I'd assume the warranty is longer than the lease, but check.

As others mentioned, if your main worry is money leasing may not be the best alternative. I got the lease for 1 reason: I can get rid of the car easily, drive it to the dealer and goodbye. Of course, there's a penalty for anticipated end of contract (16% of car initial value at month one, going down slowly to zero). Expensive, but simpler than finding something like a nachmieter to get out of the contract. But that's me, I pay for flexibility.

Concerning job incertitude, I was offered 2 insurances: unemployment and disability. I chose unemployment, it covers some months of the leasing cost. The insurance is limited, but it buys some time to find a new job or think about what to do next. It's around 20 CHF per month.

Finally, winter tires. Make sure the numbers already include them.
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Old 23.10.2020, 12:23
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Re: Car leasing vs buying

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Arriving late to the party

First, be patient and don't sign anything yet. There's a recent thread about another EFer that signed the contract to be investigated for a car loan, then changed his mind (did not buy the car) and now he's unable to get another credit https://www.englishforum.ch/finance-...-any-loan.html

Another topic is the leasing contract by itself. For example I have a 4 year leasing but the service warranty is for 3 years. I'll have to pay the last year as extended warranty. Not big trouble but better have this clear since the start. For a 3 year, lease I'd assume the warranty is longer than the lease, but check.

As others mentioned, if your main worry is money leasing may not be the best alternative. I got the lease for 1 reason: I can get rid of the car easily, drive it to the dealer and goodbye. Of course, there's a penalty for anticipated end of contract (16% of car initial value at month one, going down slowly to zero). Expensive, but simpler than finding something like a nachmieter to get out of the contract. But that's me, I pay for flexibility.

Concerning job incertitude, I was offered 2 insurances: unemployment and disability. I chose unemployment, it covers some months of the leasing cost. The insurance is limited, but it buys some time to find a new job or think about what to do next. It's around 20 CHF per month.

Finally, winter tires. Make sure the numbers already include them.
Thanks for the advice!
I will not sign anything yet. I just wish there was a way to know in advance whether they would approve the lease so I can at least plan on what I want to do (buy or lease).
For actual financing loans, they all required fixed contracts and stated it specifically in the application and fine print, that's why I questioned whether the same would be for car leases.
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Old 23.10.2020, 12:40
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Re: Car leasing vs buying

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Thanks for the advice!
I will not sign anything yet. I just wish there was a way to know in advance whether they would approve the lease so I can at least plan on what I want to do (buy or lease).
For actual financing loans, they all required fixed contracts and stated it specifically in the application and fine print, that's why I questioned whether the same would be for car leases.
I guess it's the same for leasing, you need an unlimited contract. Or, a 15-25% down payment, that's how the self-employed without regular income get a lease. It all depends on your circumstances: family dependents, other debt, how much you pay for rent, etc.
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Old 23.10.2020, 13:09
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Re: Car leasing vs buying

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Another worry for me is I don't know how to predict the kilometers per year, I don't want to frame my thinking around the number written in a lease contract. After all, having a car is about freedom.
Get out the service record from your current car. Every service will include the actual kms travelled at that point in time.
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  #33  
Old 23.10.2020, 15:34
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Re: Car leasing vs buying

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Get out the service record from your current car. Every service will include the actual kms travelled at that point in time.



Yes, but that's the old car.


Unless the car is just a utility to get from A to B at the cheapest possible way (which would then preclude any kind of new-ish car and thus make leasing irrelevant), part of getting a new car is to enjoy driving more, visit places.



In my current car, I would certainly dread to drive for longer stretches.

But in a new car, with better seats, I can see myself going on more and more remote road-trips.
Additionally, circumstances may change and you're suddenly in a situation where you do 600km per week where before 60 was a lot.
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Old 23.10.2020, 15:41
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Re: Car leasing vs buying

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I guess it's the same for leasing, you need an unlimited contract. Or, a 15-25% down payment, that's how the self-employed without regular income get a lease. It all depends on your circumstances: family dependents, other debt, how much you pay for rent, etc.

Great, I was wanting to put around 30-40% so I hope it helps!
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Old 23.10.2020, 15:59
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Re: Car leasing vs buying

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Great, I was wanting to put around 30-40% so I hope it helps!

Surely, 40% if half the car Have you asked the sales people? They should know about this much better.
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Old 23.10.2020, 21:08
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Re: Car leasing vs buying

With a new car, 40% evaporates when you buy it


For anybody reading this thread, please take a minute to think about cashflows


Over 90% of us are going to be fine but 10% of us will have some income-related shocks due to the pandemic or anything else (family, unemployment, accident, etc). When something like that happens, a monthly lease payment suddenly becomes a huge burden.


I know a number of people who have a policy of buying cars for cash. Because they feel an obligation to use the cash wisely, they spend extra time researching the purchase, they know how to talk to mechanics, they don't care about the appearance of the vehicle. It is hard here in Switzerland, when everybody else has the latest model from Germany, you want that too.


The 16% penalty referred to above is the cash price for some quality used cars (if that isn't an oxymoron).


In some professions (who is a doctor here?) you always have income and so you can always pay the lease.


Having a used car and knowing a little bit about how it works can be fun, like owning one of those houses that the realtor describes as a "character property"


The similarities don't stop there: character properties and used cars are sinful in their energy waste. Nonetheless, some of those gas-guzzlers are actually more reliable and easier to service than some new cars. Example: pre-2010 BMW manual vs latest BMW automatic.



For example, I know people who drive one of the older BMW diesels on a 2000km round trip to the Balkans at least once every year (pre-pandemic), they have breakdown assistance and they know they can stop and get it serviced at any BMW dealer along the way.
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Old 23.10.2020, 22:05
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Re: Car leasing vs buying

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Over 90% of us are going to be fine but 10% of us will have some income-related shocks due to the pandemic or anything else (family, unemployment, accident, etc). When something like that happens, a monthly lease payment suddenly becomes a huge burden.
If you don't have the cash, then you don't have a choice and take a lease.

But this thread is about having the choice, i.e, the assumption is that you have the cash.

If you didn't pay the whole amount for the car, then you still have the cash with you. You can pay the monthly lease payments from your the cash that you saved.
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  #38  
Old 23.10.2020, 22:24
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Re: Car leasing vs buying

Another option is to take out a low interest loan (3.5% at lend.ch) and buy a new car from a car supermarket like AZW or AutoKunz. They often have job lots of identical new, mid-spec cars being sold for upto 50% off RRP (full warranty and servicing)... probably cancelled EU fleet orders for a gas company or Hertz.

I mean if you're not fussy about colour and options, this could work out well and the car is obviously yours.
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Old 23.10.2020, 22:32
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Re: Car leasing vs buying

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So, I'm finally looking to pull the trigger on a new car and I'm having some trouble deciding on whether to lease or just buy it up front with cash. This is for a Tesla model 3 so buying used is still very similar in price, hence the reason going for a new one.

The leasing rate here is incredibly low, (0.99%) which would make the monthly payments super low. I know there are disadvantages (higher insurance, not owning the car, others??). I would be paying for the more expensive insurance (full casco) regardless as I would like to have have the full package for the first couple years.

But I think together with the lower rates and low monthly payments, I would still be basically paying nothing for 3-4 years and can save the 45k+ cash to use in other ways and just buy the car at the end of the leasing period.

What am I missing here?
One downside with leasing is that they may charge you a lot for minor cosmetic damage or for new tires when you give it back.

If you plan to buy it it is better to finance it. If you want to option to hand it in just in case you don't like it or something bad happens to it then it is better to lease it.

In all cases finance should be less expensive unless there is a catastrophe with values.

Also with leasing you are paying interest on the residual amount that potentially you don't plan to pay if you give it back however you carry the debt for the leasing term. It is not a minor amount.

Last edited by wantone; 23.10.2020 at 22:34. Reason: add more content
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Old 23.10.2020, 22:46
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Re: Car leasing vs buying

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So why do people do it? I understand that it might give you a lower monthly payment in the short term vs. just getting a loan, but if you're really that strapped for cash shouldn't you just be going for a cheaper car in the first place? Or am I missing something else here?

(TBH I've not bought a car or motorbike except for cash in the last 30-odd years, so I know I'm not really well up on the whys and wherefores).
For most people in most cases they can expense the lease payments because they run a business. Hence, it suits these people. If the finance the car and own it they can still expense it but it gets more complicated from accounting perspective.

There are some attractive short term lease deals (2 years for example) that cost next to nothing to small business owners because of tax benefits and manufacturers like leasing because they can resell the cars. A 2 yr od car is still a almost new car.

For people that they can't expense the lease payments it is a financial madness except if the car is involved in an accident and therefore its value goes down the drain. Leasing caps the potential price depreciation. Some people do it for a while because they want to try it but after paying all these money and end up without car usually the stop after 6 years or so.
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