Differences between leasing and car financing
Blog | Car Credit | Credit
Car financing Leasing Mileage No, the vehicle is yours. You use it as you like Yes, indicated in the leasing contract. 0,3 ou 0,5 chf per additional mile, if over the mileage limit. Annual mileage allowance. Repayment duration 84 months max. 60 months Vehicle ownership The customer The bank Residual value None Yes + […]
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Car financing |
Leasing |
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Mileage |
No, the vehicle is yours. You use it as you like |
Yes, indicated in the leasing contract. 0,3 ou 0,5 chf per additional mile, if over the mileage limit. Annual mileage allowance. |
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Repayment duration |
84 months max. |
60 months |
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Vehicle ownership |
The customer |
The bank |
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Residual value |
None |
Yes + VAT to be paid |
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Full casco insurance |
Free to choose |
Mandatory full Casco coverage |
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Life insurance covering the remaining balance on the loan |
Yes, included in the interests. No additional fees. |
No, option to be added |
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Down payment |
Not necessary |
Yes, often requested |
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Interest on VAT |
None |
Yes |
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178 code indicated on the vehicle registration card |
No |
Yes, meaning impossible to resell the vehicle to a third party |
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Mandatory maintenance of the vehicle |
Free, not mandatory |
Mandatory |
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Contract early termination |
Yes, at any time, lower interest charges based on the unused remaining time |
Possible with fees and costs |
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Car purchase, discounts |
If paid in cash, a discount can be negotiated with the garage owner |
Little negotiation |
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At the end of the contract, the vehicle can be returned |
Not possible to turn the vehicle in |
Residual value to be paid |
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In case of accidents, whether partial or complete damage |
The insurance company will pay you directly the market value of the vehicle according to the insurance contract |
Must repair and in case of total damage, the insurance company will pay the full amount to the leasing company. |
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Vehicle resale at any moment, market price |
Yes, market price |
No, garage price |
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Damage inside the vehicle (seat, …) |
You are the owner |
If the vehicle is returned to the dealer, all the damages will be charged to the customer. |
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Deductible interests and debts |
Yes, fully deductible |
No deduction |
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Trouble with the vehicle warranty |
More flexibility for you |
You must keep on paying the leasing company. |
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Vehicle is inspected when returning it to the garage |
No, the vehicle is yours |
Yes, it is required by the leasing company, the garage will inspect the car |
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Held legally liable in case of lease monthly payments litigation |
Your vehicle will not be taken away from you, no causality. |
The vehicle is returned to the dealer, you are not the owner… |
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Use of the vehicle |
Free |
Restriction against who drives |
Article written by Münür ASLAN Managing Director of Cashflex MultiCredit Sàrl.
