Car Leasing in Switzerland vs. UK

Dear sir/madam I am probably moving back to Geneva in the next few months, having lived in Lausanne and Geneva 2008-2016, on and off.

I was always amazed at the high cost of car leases. Recently, based in the uk, I see so many leasing offers and I have to say that on a 3+23 basis, I see as low as say £150/month for a golf, which is as much as £300/month for the top golf, or sub £150 for a basic Hyundai Tucson or for £500/month you can get a really decent car.

But when I look at Swiss lease offers, I am horrified. It seems there is very little for less than CHF1000/month. In fact CHF1000/month doesn’t get you a great car. I look at retail prices and see that cars are only a little more expensive in Switzerland (between 2010 and 2012 I imported 3 new cars to Switzerland as I saved 30% or more at the time), so that difference in retail doesn’t explain the huge price differences.

Is it residual values are set lower in Switzerland? Is the interest rate higher? That seems counterintuitive as mortgage rates are lower in Switzerland, but I guess in the UK there is more competition. Is there anyway you could explain why the difference is so large?

Subsequently, I will be looking for a car lease and I wonder whether there are any companies you could recommend for leasing?

Thank you for your time

Best regards

Hi there,

moneyland.ch does not specialize in UK financial products and a fairly thorough study would be required to accurately determine the differences in UK and Swiss leasing models.

However, a basic comparison of a VW Golf 1.0 TSI 85PS lease from Swiss VW distributor AMAG and Volkswagen UK provides some interesting insights.

Criteria used:

Vehicle: Volkswagen Golf 1.0 TSI 85PS
Vehicle listed price: 20,450 Swiss francs at AMAG / 18,995 pounds sterling (currently around 24,130.68 Swiss francs) at VW UK
Lease term: 48 months
Repayment schedule: Monthly repayments
Deposit contribution: 2000 Swiss francs (AMAG) / 1500 pounds (VW UK)
Mileage: 10,000 km (AMAG) / 5000 mi. (VW UK)

The interest rate quoted by AMAG is lower than that quoted by Volkswagen UK, at 3.90% nominal annual interest compared to 5.43% nominal annual interest in the UK.

However, the quoted monthly lease payments are 294.16 Swiss francs at AMAG and 215 pounds sterling (currently around 273.59 Swiss francs) at Volkswagen UK. At those rates, the combined monthly lease payments come to 14,119.68 Swiss francs at AMAG and 13,132.32 Swiss francs at VW UK.

According to the quoted prices, leasing the car in the UK would be around 987.36 Swiss francs cheaper than leasing it in Switzerland in spite of the fact that Swiss VAT on new vehicles is significantly lower than that levied in the UK. However, the calculation is not exact due to small differences in the Swiss and UK deposit contributions and mileage.

Factors which may play a role in this price difference include the going CHF/GBP exchange rate, administrative costs and residual value estimates.

Major Swiss leasing service providers include: Bank-now (Credit-now), Cembra Money Bank, Cashgate, Migros Bank and Multilease. Which provider offers the best conditions depends on many factors including the vehicle in question, the lease term and the price. moneyland.ch does not endorse any one leasing service provider. Consider requesting quotes from various leasing providers before settling on a lease agreement. The moneyland.ch car leasing calculator makes it easy to calculate the actual cost of a lease based on the quoted interest rate, term, vehicle price and down payment.

moneyland.ch generally advises users to purchase vehicles up front in cash – using a personal loan if necessary – rather than leasing vehicles. In Switzerland, leasing typically works out more expensive than buying. The benefits of buying as opposed to leasing are explained in this moneyland.ch guide to the costs of leasing.

When you buy a car, you can typically resell it at a value well above the residual value calculated by leasing service providers. In Switzerland, personal loans are subject to the Swiss consumer credit law which entitles borrowers to make additional payments and to repay loans ahead of schedule without any penalties.

This makes personal loans an alternative to leasing agreements – particularly because the car in question belongs to you and you can sell it at any time if necessary. Borrowers with good credit may be able to obtain loans at interest rates similar or only moderately higher than typical lease rates.

You can use the moneyland.ch personal loan comparison to compare the guide rates of Swiss personal loans.

Best regards from Moneyguru