Car Plans: A Practical Guide

Car plans are a relatively new trend in Switzerland. The Swiss car plan comparison makes it easy to find and compare the exact costs and features of available car plans.

Here, moneyland.ch explains what you should consider when choosing a car plan.

1. Car makes

Car plans vary broadly in terms of the cars they let you drive. The age and mileage of cars also varies between service providers.

Car plans offered by car manufacturers only offer cars made by the corresponding manufacturer. Other car plan providers offer many different makes of cars.

There are Swiss car plans that offer just one make of car, while others let you select from as many as 300 different models. The most important criteria when choosing a car plan is whether or not the service provider offers the cars which you want to drive.

2. Exchanging cars

A benefit of genuine car plans is that you can exchange cars at regular intervals. Some car plans let you drive a different car every day, while others only let you exchange your car every month or every six months. The cheapest car plans often require you to keep the car for 24 or even 48 months before you can exchange it. As a general rule, the more frequently you want to change cars, the more you have to pay for your car plan.

3. Minimum contract terms and notice periods

The minimum contract term determines how long you must remain subscribed to the car plan after signing up before you are able to terminate the plan. There are car plans with minimum contract terms of just one month, while others can only be terminated after a minimum of six months. Notice periods for terminating contracts are also important to look at. These range between one day and one month, depending on the car plan provider.

With most car plan providers, the contract term is identical to the length of time you have to keep each car before you can exchange it. In this case, a new contract is created for each new car. But that is not the case with all providers.

4. Flat fees

Monthly flat fees for car plans vary depending on the car make or car category you choose. Flat fees range between around 300 and 2000 francs per month, depending on the car and plan. Flat fees for identical cars can also vary significantly between providers, so comparing is important.

5. Additional costs

The monthly flat fees cover many different costs including insurance, road taxes and highway stickers, tires and tire replacement, servicing, repairs, and in some cases courtesy cars and cleaning.

Some car plans have additional, one-time fees. Depending on the plan, these may apply just once when you subscribe, or every time you exchange a car. Some car plans require you to make a down payment.

Note that while the flat fees cover many of the costs of using a car, there are costs which are not covered. The primary out-of-pocket costs which you must cover yourself include fuel (or charging) and parking. Most plans do not cover the costs of cleaning and car washes. Some do not cover the cost of delivering cars to your home, but may deliver for an extra fee.

In every case, only a limited amount of mileage is included in car plans. Mileage allowances vary broadly between providers and plans. Typically, unused mileage allowances can be carried over to the following month. When your driving exceeds the included mileage, you pay a fee for each additional kilometer driven. Fees for additional mileage range between 20 and 1.60 centimes per kilometer, depending on the plan and car.

It is also important to account for possible insurance deductible payments. The flat fees always cover car insurance premiums, but most plans require you to pay the deductible in the event of collisions for which you are responsible. The deductible is typically 1000 francs.

6. Car plan or long-term rental?

Car rentals have been offered in Switzerland for a long time. But cars from Avis, Hertz, Sixt, and other rental car companies are normally rented for short periods of time. However, some companies also give you the option of renting cars for longer terms. Car rentals of at least one month are generally classified as long-term rentals.

The borders between car plans and long-term rentals are somewhat fluid. The ability to exchange your car during the contract term is sometimes cited as a difference. With a long-term rental, on the other hand, the contract is linked to a specific rental car. Another difference is that rather than having a monthly flat fee, the rents for long-term rentals are often calculated on a daily basis and the rental term is generally fixed at the start of the rental.  

However, in Switzerland there are many offers which are labelled as car plans, but do not let you exchange cars within the contract term. There is often little difference between these car plans and conventional long-term rentals.

The car plan comparison provides a clear overview of current Swiss car plans and long-term rentals.

7. Car plans vs buying a car

Buying a car straight out is almost always cheaper than using a car plan. When you buy a car, you can choose the exact model you want to drive, while the models offered with car plans are limited. If you want to own your own car, buying a car is the only option that gives you ownership. If you buy a car using a personal loan, you must account for the added costs of the loan.

Car plans are advantageous in that they give you a lot of flexibility and save you time by minimizing the work involved with having a car. You benefit from driving relatively new and well-serviced cars. Tire replacement is generally handled for you, and servicing is managed by the car plan provider with minimal involvement on your part. You have the freedom to exchange your car for a newer of different model on a regular basis without the hassles of selling your old cars and buying new ones.

If you only need a car for a few months (in the summer, for example), then getting a car plan or long-term rental for that time can work out cheaper than buying and reselling a car in some cases. 

8. Car plans vs. leasing

Leasing a car is similar to renting a car or using a car plan because you do not own the car you drive. Depending on the terms and conditions of your car lease, leasing can be more expensive than using a car plan. A major advantage of car plans over leasing is that you do not need to cover the costs of insurance, taxes, servicing and repairs yourself. Another advantage of car plans is their flexibility with regard to exchanging cars. The minimum term for a lease is typically one or two years. Car plans, on the other hand, can have minimum terms as short as one month, depending on the service provider.

More on this topic:
Compare car insurance premiums now
Car plan comparison
Guide to car leasing