Differences Between a Vehicle Loan and Leasing
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Cashflex Multicredit Sàrl
Differences Between a Vehicle Loan and Leasing
| Aspect | Vehicle Loan<br>(when you buy the car on credit) | Leasing<br>(when you choose leasing) |
|---|---|---|
| Mileage limits | None – the car is yours to use freely. | Yes – fixed in the contract. If exceeded, CHF 0.30 – 0.50 per extra km; annual cap applies. |
| Repayment term | Up to 84 months | 60 months |
| Ownership of the vehicle | The customer | The bank / leasing company |
| Residual value | None | Yes, plus VAT payable |
| Fully comprehensive insurance | Free choice | Fully comprehensive insurance compulsory |
| Death insurance covering the outstanding balance | Yes – included in the interest, no surcharge | No – optional extra |
| Down payment | Not required | Usually required |
| Interest on VAT | None | Yes |
| Code 178 in the vehicle registration | No | Yes – prevents resale to third parties |
| Service & maintenance obligations | Free – no contractual duty | Mandatory |
| Early repayment | Possible at any time; interest reduced for the unused period | Possible but subject to penalties and fees |
| Vehicle purchase / discount | Paying cash → negotiate a discount with the dealer | Little room for negotiation |
| End of contract / vehicle hand-back | No hand-back | Residual value must be paid |
| Accident claim (total or partial loss) | Insurer pays you the market value as per the policy | Must repair; for total loss insurer pays leasing company |
| Resale of the vehicle | Yes – at market price, any time | No – only at the dealer’s price |
| Interior damage (seats, etc.) | You are the owner | On return, customer pays for damage |
| Tax deductibility of interest & debt | Fully deductible | No deduction |
| Problems with vehicle warranty | Full flexibility | Leasing instalments continue regardless |
| Condition report on return | None – the car is yours | Required; dealer inspects vehicle condition |
| Debt collection / disputes over instalments | No repossession of the car | Dealer can repossess; you are a lessee |
| Use of the vehicle | Free | Driver restrictions apply |
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