Financing a car is an important financial decision. In Switzerland, there are several solutions: cash purchase, car loan, leasing, car pooling, car rental or car subscription. However, when it comes to regular, long-term use, the choice most often comes down to one key alternative: car leasing or credit.
This article is designed to help you make sense of the situation. We take a detailed look at the different forms of car financing, With a special focus on car loans, we explain why, in many cases, they are a more advantageous solution than leasing.
How can I finance my car in Switzerland?
Before getting into the car loan vs. leasing comparison, it's useful to review the main financing options available on the Swiss market.
Cash purchase: the simplest solution, but not always ideal
Buying a car for cash is, on paper, the most economical solution. You avoid interest charges and long-term contracts, and take immediate ownership of the vehicle. What's more, paying cash often enables you to negotiate attractive discounts with the dealer.
However, it's not always a good idea to tie up tens of thousands of francs. Your savings could be used more strategically, We're always looking for ways to save money, for example, to deal with unforeseen circumstances or for other projects.
Car loans: becoming an owner without tying up capital
Car loans, also known as Car loan or private credit for vehicle purchase, allows you to finance all or part of the purchase price. You borrow a set amount and repay it over a fixed term, with clearly defined interest.
Unlike leasing, you become the owner of the vehicle as soon as you buy it. This difference is fundamental, and explains why a car loan offers far greater freedom.
Car loans: how they work and key benefits
How does a car loan work?
With a car loan, you take out a loan with a bank or other specialized institution. The amount borrowed corresponds to the price of the vehicle (new or used), with no obligation to make a down payment.
The credit parameters are defined in advance:
- car loan amount ;
- repayment period (generally between 12 and 84 months) ;
- interest rate ;
- fixed monthly payments.
This transparency facilitates managing your budget.
You are the owner of the vehicle
One of the main advantages of a car loan is ownership. As soon as you hand over the keys, the car belongs to you. You can :
- resell it at any time; ;
- freely modify it ;
- choosing your garage and insurance ;
- drive with no mileage limit.
This freedom contrasts sharply with the constraints of leasing.
Tax benefits of car loans in Switzerland
In Switzerland, to date, interest of a car loan are tax-deductible. For many households, this tax advantage significantly reduces the real cost of financing.
Monthly leasing payments, on the other hand, are not deductible for private individuals.
Flexibility and early repayment
Another major advantage of a car loan is the possibility of early repayment. You can pay off your credit at any time, without penalty, and possibly refinance with a more advantageous institution.
This flexibility is either non-existent or very costly when leasing.
Car leasing: attractive but restrictive
Visit car leasing is often presented as a modern, affordable solution. Monthly payments may seem attractive, but this impression can be misleading.
The leasing principle
With leasing, you pay for the use of a vehicle for a fixed period (often 24 to 48 months). The leasing company remains the owner of the car. At the end of the contract, you must :
- return the vehicle ;
- or buy back the lease at residual value ;
- or extend leasing into credit.
Down payment and false impression of low monthly payments
Most leasing contracts require a down payment of up to 20 to 25 % of the vehicle price. This artificially reduces the monthly payments, without reducing the total cost.
Insurance and additional costs
Leasing almost systematically requires comprehensive insurance. For some profiles, especially young drivers, this insurance can cost several thousand francs a year.
In addition :
- return costs ;
- repairs excluding normal wear and tear ;
- mileage overruns ;
- compulsory servicing at approved garages.
According to some estimates, the actual monthly cost of leasing can be up to twice the advertised amount.
Early termination: a major financial risk
Terminating a leasing contract before the end of the contract will incur heavy penalties. In the event of a change in professional or personal circumstances, this rigidity can become problematic.
Car loan vs. leasing: the complete comparison table
| Criteria | Car loan | Car leasing |
|---|---|---|
| Vehicle ownership | ✅ You're an owner from the moment you buy | ❌ The vehicle belongs to the leasing company |
| Vehicle use | ✅Total freedom of use | ❌ Right of use limited by contract |
| Mileage | ✅ Unlimited | ❌ Limited annual mileage, additional costs for overruns |
| Down payment | ✅ No deposit required | ⚠️ Deposit often required |
| Monthly payments | Generally higher, but with no hidden costs | Lower in appearance, but deceptive |
| Total cost | ✅ Often more advantageous in the long term | ❌ Often higher after adding ancillary costs |
| Insurance | Free choice (no compulsory insurance) | ❌ Compulsory comprehensive insurance |
| Taxation (individuals) | ✅ Tax-deductible credit interest | ❌ Non-deductible monthly payments |
| Garage selection | ✅ Free choice of garage | ❌ Often imposed by the contract |
| Vehicle modifications | ✅ Authorized (hitch, accessories, etc.) | ❌ Generally prohibited |
| Early termination | ✅ Possible at any time without penalty | ❌ Expensive (high exit fees) |
| Vehicle resale | ✅ Possible at any time | ❌ Impossible without buying back the vehicle |
| Residual value | ✅ You benefit on resale | ❌ Reverting to the leasing company |
| Impact on solvency | Identical | Identical |
| Cost transparency | ✅ High | ❌ Low (many indirect costs) |
| Suitable for | People who want to keep their car | Temporary use, frequent vehicle changes |
In short, car leasing offers greater freedom, flexibility and cost control. Leasing may seem attractive in the short term, but there are many advantages. contractual constraints and an often higher real cost.
For private individuals in Switzerland who want to keep their vehicle and optimize their budget, a car loan is often the best solution. the most rational, cost-effective solution.
What are the alternatives to car credit and leasing?
Carpooling
Economical solution for occasional use, carpooling becomes attractive below 10,000 km per year. However, it's not really suited to everyday needs.
Car rental
Short-term rental is suitable for occasional needs. It is not suitable for regular use.
Car subscription
The car subscription includes almost all costs (insurance, This means that you have to pay for all the costs (maintenance, taxes, etc.), but there are mileage limits and it's expensive over the long term.
Why a car loan is often the best choice
Visit car credit is distinguished by :
- true financial freedom; ;
- a better cost control ;
- tax benefits ;
- contractual flexibility ;
- the creation of an asset (the vehicle).
It is particularly suited to people who want to keep their car for several years, drive without constraints and optimize their budget.
Conclusion: car loan or leasing?
One size does not fit all. However, for the majority of private individuals in Switzerland, a car loan is a more transparent, flexible and often more economical alternative to leasing.
Before signing a contract, it's essential to compare offers, analyze the total cost and assess your personal situation. Professional support can often help you avoid unpleasant surprises and opt for a car loan perfectly suited to your needs.
