Rolling lease contract with Cembra

Transportation, Travel and Trips
1

Hi all,

I have a lease for a car that expires with the new year. The lease is with Cembra, as I bought used from a garage in Zurich. Does anybody know if it’s possible to roll the lease contract in a new one? I know at least one financial services company that does it, but they are the manufacturer’s arm, so it was a pretty seamless experience. Got an offer before the lease was up, and moved forward.

Does anyone have experience with Cembra ?

2

Update here for future reference and for whoever might need it.
This can happen and the process is as follows:

  1. You contact the garage that sold you the car. You can do it at any time, but they will tell you that the application to extend the lease can happen in the month before expiry of the current one. Mine is expiring in Feb, so I talked to them now in January.
  2. You make a new contract for 1-2-3 years or whatever. This is the same as any other lease contract in Switzerland, and the only difference is you cannot make a chunky first payment to reduce the montlhy one. You can also expect that the residual will be quite low, which is not atypical for most cars, but for more expensive cars that tend to keep their value, the residual is probably significantly lower than the expected market value at the end of the new lease.
  3. You apply as per the first time, so again you are providing financial information and need to be approved.

So it’s possible. In my case, I was actually planning to make a chunky down payment to keep the monthly payments and interest expenses lower, but I’ll just live with it for now. Lower residual surprised me, but I was planning a buyout regardless, so just spreading the cash flow pain.

3

Is the rationale for extending the lease just to spread out the cost versus buying outright?

I guess if the interest rate is low, it can make sense, but I was wondering why not buy if the residual is much lower than expected and save on the interest costs?

4

The current residual is chunky and I’d rather keep the liquidity at circa 5% that Cembra is charging for the lease. I actually don’t think the interest cost is too much, and I would have a comprehensive insurance regardless since it’s a reasonably expensive car.

The next residual I think is quite low to what the car would be reasonably worth, so I’m just spreading the cash flow over 2 years instead of taking it all now. In all honesty, I’ll probably buy it out this time next year.