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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 + VAT to be paid

Full casco insurance

Free to choose

Mandatory full Casco coverage

Life insurance covering the remaining balance on the loan

Yes, included in the interests. No additional fees.

No, option to be added

Down payment

Not necessary

Yes, often requested

Interest on VAT

None

Yes

178 code indicated on the vehicle registration card

No

Yes, meaning impossible to resell the vehicle to a third party

Mandatory maintenance of the vehicle

Free, not mandatory

Mandatory 

Contract early termination

Yes, at any time, lower interest charges based on the unused remaining time

Possible with fees and costs

Car purchase, discounts

If paid in cash, a discount can be negotiated with the garage owner

Little negotiation

At the end of the contract, the vehicle can be returned

Not possible to turn the vehicle in

Residual value to be paid

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.

Vehicle resale at any moment, market price

Yes, market price

No, garage price

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.

Deductible interests and debts

Yes, fully deductible

No deduction

Trouble with the vehicle warranty

More flexibility for you

You must keep on paying the leasing company.

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

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…

Use of the vehicle

Free

Restriction against who drives



Article written by Münür ASLAN Managing Director of Cashflex MultiCredit Sàrl.