Car loan or leasing when buying a car in Switzerland: which financing is worthwhile?

With leasing, on the other hand, you can expect many conditions: you have to take out fully comprehensive insurance, are restricted in terms of the number of kilometres you can drive and are often tied to a contract garage where you have to have your car serviced. In addition, you cannot resell the car. And if you terminate the leasing contract prematurely, you must reckon with high exit fees.

Below you will find all the advantages and disadvantages of leasing summarised:

Advantages of leasing

• You can always drive new models - even those that you would otherwise not be able to afford.
• The leasing interest rate is often lower than for a car loan.
• You are free to choose or negotiate the residual value.
• You do not pay the full price of the vehicle unless you buy it at the end of the lease.

Disadvantages of leasing compared to a car loan

• The car does not belong to you, but to the leasing company.
• You must take out fully comprehensive insurance.
• Although you do not own the car, you bear the costs for tyres, repairs and car servicing.
• You cannot deduct the leasing instalments from your taxes (except for companies).
• They are subject to conditions: often a contract garage, limited number of kilometres, prohibited change of owner (code 178).
• You can only terminate a leasing contract prematurely for a high exit fee.
• The leasing company can cancel the contract if, for example, you do not comply with certain conditions or pay the leasing instalments late. In such a case, you will incur high costs.
• At the end of the leasing period, you must return the car. If the car shows too many signs of wear and tear or has travelled more kilometres than agreed, you will incur further costs that are often impossible to estimate.

Are you about to buy a car? Or do you already have a leasing offer to hand? Check whether a car loan might be worthwhile for you. We will be happy to advise you - just give us a call: +41 44 244 34 00.

Advantages and disadvantages of car loans

Compared to leasing, a car loan usually has higher interest rates. However, it is important to compare these interest rates: not every bank offers you the same interest rate for a car loan.

The most important advantage of a car loan compared to leasing is your freedom: with a car loan, you have immediate access to your vehicle. You are also free to choose your insurance or car garage. What's more, you can sell your car at any time or pay off the car loan early. We will be happy to help you calculate the appropriate repayment amount. With leasing, you are bound for the entire term of the contract.

We have summarised all the advantages and disadvantages of a car loan in the following overview:

Advantages of a car loan

• You own the car from day one.
• A deposit is not mandatory - you can finance your car at 100 % with a loan.
• With a car loan, you can buy your vehicle from a car dealer or privately.
• You can secure high discounts because you are considered a cash payer with a car loan and therefore have more room for manoeuvre.
• You can expect no additional costs, processing fees or a large catalogue of conditions as with leasing.
• You are also free to choose your vehicle insurance and car garage.
• You can deduct the interest on your car loan from your taxes.
• You can repay your car loan early and without any additional costs. This also saves you a lot of money.

Disadvantages of a car loan

• The interest rates for a car loan are generally higher than for leasing. It is worth comparing the interest rates and providers here.

As you can see, a car loan offers many more advantages and freedoms than leasing. Before you buy your dream car, let us advise you on the type of financing. We will be happy to help you: +41 44 244 34 00.

Which is better: credit or leasing?

Only you can answer this question. A consultation can help you to find out which form of financing is best for you. If you only want to use a car for a short period of time and are not bothered by conditions such as the limited number of kilometres, leasing may be right for you.

However, if you want to buy a car and own it for a longer period of time, a car loan is probably more suitable for you: you can save the higher interest costs compared to leasing with cheaper insurance or a garage, for example. But you are free from the outset: You own the car from the very first minute and can use it to cover an unlimited number of kilometres. What's more, if your financial situation changes, you can sell the car to pay off the loan early and without any additional costs. This is not possible with leasing. Whichever form of financing you choose, get advice beforehand. Simply give us a call: +41 44 244 34 00.