Iam basically from India,but living in Switzerland for almost 4yrs.Now iam planning to buy a car.Can someone advise me pls whether to buy it on leasing or financing??
Please help me in making the right decision!!!!
Hi There,
Hi,
It depends if you want ti buy a new car or second hand one! And also it depends if you have cash money. In principle, if you buy cash, you can get better price.
Well what offers did you get from the finance and lease companies and what did you think of them for your situation?
Neither - why don't you just pick up a cheap little run-a-round .
How long do you think you will be here?
Cash is always the best if you have it, but lease if you will only
be here a couple of years. The interest rate to lease is 3.9% whereas
to buy is about 10-11%.
Good luck!
Migros Bank Online have a competitive rate of 5.9%. So with cash in hand, you should be in a good position to buy second hand. Comparis is a great tool for finding cars since you can see how long its been advertised, together with a history of all the price drops + a value for money rating.
Ok, I have not seen a case where leasing was not cheaper than financing. Where exactly is the difference?
- Leasing: You borrow money and put the car as a security. If you are unable to pay, the bank can collect the car within a short time and has so a very low risk.
- Financing: You borrow money without giving much security. The bank will look at your income, wealth and so on and assesses the risk. Some people will not be able to pay their credit back and since banks never lose, this loss is calculated into the higher interest rates you have to pay.
For the ones who will now write "but leasing is only for new cars and you give back the car after some years..." No. Not necessarily. Some years ago, I wanted to buy a young used car. I paid half of it up front and the other half in 24 installments. As a leasing contract. At the end it was paid off completely and I owned it (till today. Want to buy a 2004 A4 1,8T?). The difference in the interest rate to a consumer credit was back then easily 4 percent as I got a very cheap leasing offer.