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Old 15.08.2021, 16:35
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Lease or buy a car?

I am thinking of buying a new car but I have dilemma of how taking it? Until now every car I owned I was just buying it cash or loan. Here in Switzerland the guy in the car company advised me to lease it instead of buying it cash and he also told me that most of the Swiss are leasing their cars.
Anyone has heard something? Would you recommend to buy or lease it?
Thank everybody in advance!
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Old 15.08.2021, 18:55
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Re: Lease or buy a car?

I would not lease a car, because thats the most expensive way to have a car.
Everything is settled in the contract,if you drive a few km more per year , you
pay a lot of money as a penalty.
Look for a used car with a low km stand, so most of the depreciation is gone, but in your favour, you pay the current value of the car.
Leasing requires a very expensive insurance, a used car didn't.
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Old 15.08.2021, 20:29
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Re: Lease or buy a car?

Thank you very much for your advice! To be honest it's strange for me as well to precalculate how many km I have to do in a year or more!!
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Old 15.08.2021, 21:49
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Re: Lease or buy a car?

I agree that the most economic way to drive a car here is to buy one used, with not too much mileage on the clock given that depreciation is relatively high in the first few years, and you can choose your own insurance cover, car garage, and don't have to pay the % lease.



If you however have a good idea of your mileage p/a (because you commute mostly to work maybe), you prefer predictable monthly payments or maybe you like to drive a brand-new car. Also, you will not have the hassle of having to sell it afterwards. Simply hand in the key and that's it. Then maybe lease is for you.
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Old 16.08.2021, 06:31
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Re: Lease or buy a car?

These days I wouldnít buy a car without a lease.

You get discounts of at least 20% when buying new so some new cars are actually cheaper then ones with a few thousand km.

A lot of companies offer now 0.9% interest. Which adds only a few hundred francs more per year to the cost. I donít mind this cost as it means that I have the cash in my bank account in case I need it. Donít need the cash? Earning more than 0.9% interest on this cash is not so difficult. Some car companies donít even require a down payment now.

Of course you need to guess your km in advance. Can be expensive if you get it wrong, but you can also extend the lease at the end for another few years in the end to even it out.

I donít see a big difference in the insurance cost if buying new and going for full insurance. For me it ís less than a Fr.25 per year.

The best part for me is that at the end of the lease you just walk away. Iíve had enoigh bad experiences trying to sell cars that I would prefer to avoid it if I can. But walking away is not just walking away because the garage will give you even more discounts to stay with them for your next car, and a competing garage will offer you incentives to switch. This is a far better deal than you get for trading in your old vehicle.

The big disadvantage is that you are tied to the contract for a few years so donít do it if you are unsure about staying here. Still I prefer to have the cash in my account rather than having to sell the car to get the cash back!
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Old 16.08.2021, 07:32
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Re: Lease or buy a car?

I have done both.
Took a very fancy car on lease which I had to terminate after 06 months because I had to leave. Very very expensive proposition.
After that I decided to buy. Very happy.
Upfront investment is high but then you own the Asset and you don't have to worry about mileage penalty etc. For me it was peace of mind.
if you like trading cars regularly, then leasing is better. But I think it works out much more expensive when all things are taken into consideration.
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Old 16.08.2021, 09:35
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Re: Lease or buy a car?

Leasing is just another financing tool. You don't have to walk away at the end, and in most cases (especially in second-hand cars) the residual value set by the leasing company is way too low, so you should definitely NOT walk away. I have two cars on leasing right now, both have residuals that are probably half (if not less) what they're actually worth. When the lease is up I'm going to buy them out and then sell at market price - same thing I did with my previous lease where I got 10k over residual when I sold privately.

It's just a cheap way to finance a car in Switzerland, and with interest rates at current levels, it makes a lot of sense.
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Old 16.08.2021, 10:09
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Re: Lease or buy a car?

I agree with the 'pro' arguments for leasing. Regarding mileage, if you increase the mileage to be comfortably over what you expect it to be, it makes only a small difference to the monthly payments.
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Old 16.08.2021, 10:30
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Re: Lease or buy a car?

Another alternative is to take out a personal loan instead of lease. You pay a higher interest, but own the car and can deduct the loan from your taxable income as debt (where you cannot with a lease).

In any case, a car always costs and is a bad / no investment.
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Old 16.08.2021, 14:27
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Re: Lease or buy a car?

Personal loans are way too expensive, although admittedly I didn't know that interest is tax deductible. Still punchy though, even after the tax effect it will be quite over the leasing costs.
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Old 16.08.2021, 18:39
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Re: Lease or buy a car?

I used the calculations I received from BMW:

Let's say the car is 50k after discount. 0.9% leasing, 48 months, zero downpayment. 10k km per year.

The monthly payments will be about Fr.550.

Total cost including leasing and then buying the car outright at the end will be around 51,400. If you choose 15k km per year, the leasing payments will be Fr.16 more per month, or total Fr.750 more, but the total cost with the outright purchase in the end is about the same (higher monthly payment, but lower residual payment).

Insurance will cost max Fr.300 more over the 48 months. So let's just say that by leasing, it will cost me Fr.2000 more in total.

Ok, but I do have 50k still sitting in my bank account. Let me take just a quarter of that money, and do what is considered on this forum to be a rather bad investment, i.e., buy into my pension fund. The income tax saving will be already more than the leasing costs.

What have I missed?

Btw, I haven't seen personal financing which costs below 5%. The advantage is that you can repay and cancel it at very short notice.
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Old 16.08.2021, 18:59
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Re: Lease or buy a car?

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These days I wouldnít buy a car without a lease.

You get discounts of at least 20% when buying new so some new cars are actually cheaper then ones with a few thousand km.

A lot of companies offer now 0.9% interest. Which adds only a few hundred francs more per year to the cost. I donít mind this cost as it means that I have the cash in my bank account in case I need it. Donít need the cash? Earning more than 0.9% interest on this cash is not so difficult. Some car companies donít even require a down payment now.

Of course you need to guess your km in advance. Can be expensive if you get it wrong, but you can also extend the lease at the end for another few years in the end to even it out.

I donít see a big difference in the insurance cost if buying new and going for full insurance. For me it ís less than a Fr.25 per year.

The best part for me is that at the end of the lease you just walk away. Iíve had enoigh bad experiences trying to sell cars that I would prefer to avoid it if I can. But walking away is not just walking away because the garage will give you even more discounts to stay with them for your next car, and a competing garage will offer you incentives to switch. This is a far better deal than you get for trading in your old vehicle.

The big disadvantage is that you are tied to the contract for a few years so donít do it if you are unsure about staying here. Still I prefer to have the cash in my account rather than having to sell the car to get the cash back!
Fully agree with you and if you have a lease you can also deduct expense for your tax declaration. All interest expenses including leasing can be deducted
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Old 16.08.2021, 19:13
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Re: Lease or buy a car?

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I used the calculations I received from BMW:

Let's say the car is 50k after discount. 0.9% leasing, 48 months, zero downpayment. 10k km per year.

The monthly payments will be about Fr.550.

Total cost including leasing and then buying the car outright at the end will be around 51,400. If you choose 15k km per year, the leasing payments will be Fr.16 more per month, or total Fr.750 more, but the total cost with the outright purchase in the end is about the same (higher monthly payment, but lower residual payment).

Insurance will cost max Fr.300 more over the 48 months. So let's just say that by leasing, it will cost me Fr.2000 more in total.

Ok, but I do have 50k still sitting in my bank account. Let me take just a quarter of that money, and do what is considered on this forum to be a rather bad investment, i.e., buy into my pension fund. The income tax saving will be already more than the leasing costs.

What have I missed?

Btw, I haven't seen personal financing which costs below 5%. The advantage is that you can repay and cancel it at very short notice.
Imagine what you can do with 50k by buying leveraged 5x perpetual futures on dodge coin
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Old 16.08.2021, 19:17
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Re: Lease or buy a car?

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These days I wouldnít buy a car without a lease.

You get discounts of at least 20% when buying new so some new cars are actually cheaper then ones with a few thousand km.

A lot of companies offer now 0.9% interest. Which adds only a few hundred francs more per year to the cost. I donít mind this cost as it means that I have the cash in my bank account in case I need it. Donít need the cash? Earning more than 0.9% interest on this cash is not so difficult. Some car companies donít even require a down payment now.

Of course you need to guess your km in advance. Can be expensive if you get it wrong, but you can also extend the lease at the end for another few years in the end to even it out.

I donít see a big difference in the insurance cost if buying new and going for full insurance. For me it ís less than a Fr.25 per year.

The best part for me is that at the end of the lease you just walk away. Iíve had enoigh bad experiences trying to sell cars that I would prefer to avoid it if I can. But walking away is not just walking away because the garage will give you even more discounts to stay with them for your next car, and a competing garage will offer you incentives to switch. This is a far better deal than you get for trading in your old vehicle.

The big disadvantage is that you are tied to the contract for a few years so donít do it if you are unsure about staying here. Still I prefer to have the cash in my account rather than having to sell the car to get the cash back!
The other advantage is that you can deduct all interest expenses including leasing to further reduce your taxable income. So bear in mind that interest expenses needs to be take into account from a tax perspective
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Old 16.08.2021, 19:39
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Re: Lease or buy a car?

I used to be very anti-lease too until I ran the sums and saw what was being advertised on autoscout. With BMW I managed to get almost a third off the cost of a new car (stackable dealer and company fleet discounts) which placed a new car at the same price as comparable year old ones with average miles on autoscout. I've structured the finance with a decent deposit and higher monthly payment so the car will be mine at the end of the lease period.

In effect its the same as buying with a loan, but with low interest from the bank of BMW. The only cons I can see are as noted above about not being able to deduct the interest from your taxes and the fact that you need full casco insurance as per the terms of the lease (which I would get anyway).
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Old 16.08.2021, 20:38
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Re: Lease or buy a car?

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I used the calculations I received from BMW:

Let's say the car is 50k after discount. 0.9% leasing, 48 months, zero downpayment. 10k km per year.

The monthly payments will be about Fr.550.

Total cost including leasing and then buying the car outright at the end will be around 51,400. If you choose 15k km per year, the leasing payments will be Fr.16 more per month, or total Fr.750 more, but the total cost with the outright purchase in the end is about the same (higher monthly payment, but lower residual payment).

Insurance will cost max Fr.300 more over the 48 months. So let's just say that by leasing, it will cost me Fr.2000 more in total.

Ok, but I do have 50k still sitting in my bank account. Let me take just a quarter of that money, and do what is considered on this forum to be a rather bad investment, i.e., buy into my pension fund. The income tax saving will be already more than the leasing costs.

What have I missed?

Btw, I haven't seen personal financing which costs below 5%. The advantage is that you can repay and cancel it at very short notice.
Lowest interest rate I have seen is 3.9%. Might find lower with lombard loans, etc.

With buying you are free to modify your car. Also free to choose where to do repairs/maintenance.

Imo the worst with leasing is not being able to get out prematurely. With buying out right (and selling) on the other hand, you could drive for free or even earn money depending on the car. Especially now that delivery times are lengthening for popular brands or if you are able to get a good (fleet) discount.
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Old 16.08.2021, 20:51
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Re: Lease or buy a car?

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With buying you are free to modify your car. Also free to choose where to do repairs/maintenance.

Imo the worst with leasing is not being able to get out prematurely. With buying out right (and selling) on the other hand, you could drive for free or even earn money depending on the car. Especially now that delivery times are lengthening for popular brands or if you are able to get a good (fleet) discount.
repair/maintenance - not sure about some secondhand brands, but if buying new, repair and maintenance is already included for at least half if not all of the lease period.

I don't understand what you mean by driving for free or even earning money?
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Old 16.08.2021, 21:24
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Re: Lease or buy a car?

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Lowest interest rate I have seen is 3.9%. Might find lower with lombard loans, etc.
0.9% with BMW, MB, etc.

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With buying you are free to modify your car. Also free to choose where to do repairs/maintenance.
Chip tuning? Capped by law at 25% of original power and still has to macth the original tailpipe emissions and noise levels. Not that easy. Aesthetical modifications? Like tuning? Repairs as axman mentioned, included during 3 years and there are extended warranties too.


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Imo the worst with leasing is not being able to get out prematurely.
I'm starting to worry about this one. I'm getting motivated to buy a flat and the car leasing is blocking my credit capability. I'll ask in the following days if it's possible to pay the car in full to end the leasing without penalties :/

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With buying out right (and selling) on the other hand, you could drive for free or even earn money depending on the car. Especially now that delivery times are lengthening for popular brands or if you are able to get a good (fleet) discount.
I think this is about depreciation. Heard stories about used car prices rising but have not seen a single model which could be sold with the new price after being driven 20-30K km.
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Old 16.08.2021, 23:39
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Re: Lease or buy a car?

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repair/maintenance - not sure about some secondhand brands, but if buying new, repair and maintenance is already included for at least half if not all of the lease period.

I don't understand what you mean by driving for free or even earning money?
Hum afaik warranty doesn't usually cover annual maintenance.

I mean that under certain circumstances, it's possible to not lose (sometimes even earn) money when selling the car. For example:
You buy a well optioned sport car with a street price of 100K. You got a 30% fleet discount as some do (price is 70K). You sell it a year after with 15K km for 75K. If the delivery time is 6 months+ as sometimes the case nowadays, value might increase even more.
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0.9% with BMW, MB, etc.
For personal/auto credit? For leasing you can get 0%.

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I'm starting to worry about this one. I'm getting motivated to buy a flat and the car leasing is blocking my credit capability. I'll ask in the following days if it's possible to pay the car in full to end the leasing without penalties :/
Don't waste your time and theirs, it's not possible. Only possibility is transferring it to someone else.
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Old 17.08.2021, 07:26
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Re: Lease or buy a car?

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I'm starting to worry about this one. I'm getting motivated to buy a flat and the car leasing is blocking my credit capability. I'll ask in the following days if it's possible to pay the car in full to end the leasing without penalties :/
I have mortgages too, and this was never a factor. Besides, it sounds like you have the cash to repay it, and wouldnít the bank take this into account?

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Hum afaik warranty doesn't usually cover annual maintenance.

For personal/auto credit? For leasing you can get 0%.
Iíve not bought many brands but the last 3, Land Rover, Volvo and BMW included free maintenance (interval servicing). BMW is for 10 years or 100,000km, and also free tire change for 2 years.

I have not seen leasing for 0%, but if that is the case then all the more reason to leave your savings where it is.
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