Leasing: 10 Frequently Asked Questions
In Switzerland, many drivers use leasing. Crédits Conseils has collected the 10 questions you ask us most frequently in this Faq.
1. Which documents do I need?
In order to be able to take out a leasing contract, you will be asked for the following documents:
- A valid identity document (identity card or passport)
- A copy of your C or B residence permit if applicable
- A copy of your last 3 pay slips
- A copy of your employment contract if requested
- An extract from the credit history register
- For the self-employed, a copy of your last full tax dues may be requested
2. Do I have to pay a deposit for the vehicle?
It depends on the company you are leasing from. We also recommend you to block the deposit on a bank account, like a housing deposit.
3. Can I get a lease if I am the subject of proceedings?
Official financial establishments will always ask you for an extract from the debt collection register in order to check your creditworthiness. This is why it is very complicated to obtain a leasing contract if you have debts or if there are proceedings against you.
4. Can I take out a leasing contract if I am unemployed?
In the vast majority of cases, it is not possible to obtain a leasing contract if you receive unemployment benefits rather than a salary. However, if you already had an existing leasing contract and you find yourself unemployed, insurance is available to cover certain costs.
5. Leased cars: who is the owner?
For the entire duration of the leasing contract, the financial establishment is the owner of your vehicle. You become the owner of your car once you have paid off all the debt you contracted.
Furthermore, some leasing contracts have a predefined mileage, you cannot choose the type of vehicle insurance or benefit from tax deductions.
6. How much are the monthly instalments?
In a leasing contract, 2 things determine the monthly instalments.
The first is the duration of the contract. The longer the duration, the higher the monthly instalments. The second is the mileage indicated in the contract, which, if exceeded, adds an additional amount to the monthly instalments.
Furthermore, late payment of your monthly instalments has consequences. In addition to being entered on Zek, the credit history organisation, the financial establishment that owns the vehicle can repossess it and add an early termination fee after 3 unpaid monthly instalments.
7. Do I have the right to terminate the leasing contract at any time?
Yes, but this leads to cancellation costs which often amount to several thousand francs. Indeed, the LCC does not specify a maximum amount, and each leasing company decides on the fees it charges you.
You can also withdraw from the contract free of charge within the 14-day period indicated in Article 16 of the LCC. This period begins on receipt of the contract. The withdrawal must imperatively be made by post and be posted by registered mail before the end of the 14th day.
8. Can I shorten or extend the term of my leasing contract?
No, because the duration of the contract is fixed when it is signed.
9. I would like to sell my car, how can I do that?
Whether you have recently changed employment, decided to move to another city or simply want to change cars, there are many situations which may incite us to part with our vehicle. However, as you are not the owner of your vehicle during the term of the leasing contract, you must buy out your leasing contract in order to settle your debt.
When you terminate your leasing contract before its term, your monthly instalments will be recalculated using the residual value table coefficient indicated in your contract. You will pay the difference between the amount already paid and the newly recalculated monthly instalments.
Furthermore, additional costs may be added, such as vehicle repair costs or compensation payments.
However, if you have signed a leasing purchase agreement, you are immediately the owner of the car at the end of the contract. In this type of contract, there is no residual value, but the monthly instalments are then higher than in a pure leasing contract.
10. Is lease buyout a good idea?
Yes, if you want to change your vehicle quickly while avoiding financial penalties for terminating your leasing contract early. There are two ways to proceed in order to buy out your lease.
In the first case, you find a financially stable solvent person who would like to take your car along with your leasing contract and negotiate directly with the financial establishment. In the second case, you can buy back your leasing contract using a bank loan, sell your vehicle, but then you must pay back your private loan.
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