Financing the acquisition of a car by means of a leasing agreement has become an increasingly common practice in Switzerland. This formula allows you to change vehicles regularly without worrying about resale and loss of value of the leased vehicle. However, it is difficult to get out of a leasing contract without paying expensive early termination penalties. One of the easiest ways to get out of a leasing contract in Switzerland is to do a lease transfer. How does this concept work ? What are the advantages ?
Leasing : How it works
Leasing has become increasingly popular with companies and private individuals in recent years. And there is good reason for this if you consider the advantages of this financing solution. The main advantage of leasing is that you can use the vehicle as you wish, while it remains the property of the financial institution. The lessee also has no worries about resale. We know how difficult it is to find serious buyers on this very saturated second-hand market. However, even if the car is leased, it is still possible to buy back the leased car by paying the full amount due at the time of leasing or by paying the residual value at the end of the leasing.
Can I terminate a leasing contract ?
The advantages of leasing are undeniable. However, the disadvantage of leasing is that it does not take into account any unforeseen events in the life of the lessee. The lessee may want to terminate the contract before the end of the lease because he or she has suffered a drop in income, lost his or her job, changed jobs, had to move to another country, got divorced, is preparing for the arrival of a new baby or had his or her driving licence cancelled… However, it is impossible to break a leasing agreement in Switzerland without paying several thousand francs to terminate the leasing. If you terminate your leasing contract early, your rent will be recalculated according to the actual rental period. You will have to pay the difference between what you have already paid in monthly instalments and the total monthly leasing instalments recalculated upwards according to a coefficient mentioned in your contract. This means that the cost of withdrawing from a leasing contract is particularly high. Another option is to buy back your lease and then sell the vehicle. This maneuver has the disadvantage of being very complicated, especially if the motorist does not have the necessary funds to buy back the lease. He is not allowed to resell the vehicle as long as the lease is running, because the vehicle is the property of the lessor and the code 178 is mentioned on the grey card. Finally, the easiest way to get out of a lease without losing too much money or getting into trouble is to use a lease transfer.
How does a lease transfer work ?
A lease transfer involves changing the lessee on a leasing contract. In order to do this, the motorist must first be able to find a new lessee who accepts the terms of the contract and the leasing price. Before this can be done, it is necessary to obtain the agreement of the finance company that owns the leased vehicle. The latter carries out a credit check on the prospective buyer to ensure that he or she is really able to pay the monthly instalments. The requirements imposed by the financial institution are identical to those for a new contract. Only after the financial institution has given its approval can the leasing contract be changed.
Lease transfer : What are the advantages ?
The transfer of a lease has a number of advantages for the transferor, the new lessee and the finance company. The transferor saves a lot of money on the rent. He has the opportunity to get rid of the leasing contract without penalties and without being obliged to pay the remaining monthly instalments due. In the most extreme cases, especially when he can no longer pay the lease payments, the lease transfer will help him to escape prosecution. In addition, he can change his car without waiting for his leasing contract to expire.
The new lessee also benefits from this, as the leasing period is shortened and the number of monthly payments is reduced. This alternative also avoids the need to make an initial deposit. The transfer of leasing in Switzerland is therefore the ideal formula for those with a small budget. In addition, the contract he inherits is already negotiated in terms of rent, annual interest rate, residual value, etc. He no longer needs to worry about these different points. Sometimes, he can even take advantage of free kilometers if he bets on an under-kilometer model.
On the side of the financing company, the transfer of leasing is an opportunity to attract more customers. The latter are more interested in the idea of taking over an old contract so as not to suffer the constraints linked to the subscription of a new leasing contract.
