In its early days, leasing was a means of financing the purchase of a new car. Although the lessee did not become the owner of the car in question, he or she was able to benefit from a personalized car as if he or she were making a purchase. This option is still much in demand today, but at the same time, a good part of the leasing market is also taken up by used cars. To help you decide whether this is the right option for you, discover the advantages and disadvantages of used car leasing in Switzerland.
Used car leasing: What does it involve ?
Leasing is an increasingly popular means of acquiring a car among Swiss motorists. At a time when attitudes are changing, consumers are less and less attached to the idea of ownership and are beginning to favor the notion of use. As the range of vehicles on offer evolves year on year to meet consumer needs, the trend is for everyone to be able to take advantage of the latest technologies, making mobility more practical, more economical and more respectful of the environment. To make this as easy as possible, buying is not the way to go. By simply leasing your car, you can change vehicles regularly without worrying about reselling the leased car. You determine the term of your lease for a period ranging from 1 to 5 years, and at the end of the leasing you either return the leased car and are free to take out a new lease, or you buy the leased car if your leasing contract has an option to purchase. In its early days, some fifteen years ago, leasing was dedicated to the acquisition of new cars, which were resold on the second-hand market once they had been returned. However, the leasing market has become more widespread, and it is now possible to lease a used car. Dealers and leasing companies alike are able to offer a wide choice of used vehicles for motorists who require them.
What types of used leasing are there ?
As with new-car leasing, used-car leasing offers a number of different formulas: pure rental leasing, sales leasing and the most popular formula in Switzerland, leasing with residual value. Leasing with residual value allows you to lease your car for a period determined at the time you take out the lease. In return for the use of the car, you pay a corresponding monthly rental charge for the duration of the lease. As this is a lease with a purchase option, the supplier may require an initial deposit. However, it is still possible to take out a purchase option lease without an initial deposit. At the end of the lease, you have the choice of returning the leased car to the supplier, or buying it back at its residual value, with the supplier’s agreement. This residual value is fixed when the leasing contract is signed, and is sometimes more advantageous than the price of the vehicle on the second-hand market. On the other hand, pure rental leasing or sales leasing on a used car is also possible. The term of a leasing contract is generally 48 months, but it can be extended to 60 months or more if required. With a pure lease, you don’t have the option of buying back the car at the end of the lease. The mileage of used cars on a pure lease is often high, and leasing companies usually allow their lessees to readjust it during the term of the lease. As with new car leasing, used car leasing can also include services designed to manage the vehicle, such as servicing or insurance.
What are the advantages of used car leasing ?
The main advantage of used car leasing is its price, which is lower than that of new car leasing for the same type of vehicle and on the same terms. In fact, it’s all based on the value of the used car, which is much cheaper due to the depreciation in its value. On average, the value of a new car declines by 20% a year due to depreciation. This means that, once on the used market, the car is considerably cheaper. In leasing, the value of the leased car plays a key role in determining the rent. Its value in use is calculated on the basis of its purchase price. This is why used car leasing is so advantageous, especially for young drivers on a tight budget. Leasing a used car can sometimes be a daunting prospect, but with leasing, the lessee is assured of a recent used car, often still guaranteed by the manufacturer. On top of this, the lessee benefits from all the advantages of leasing, such as an expense spread over time, the possibility of changing cars on a regular basis, and the inclusion of additional services in the leasing contract.
What are the disadvantages of used leasing ?
The truth is, there aren’t many disadvantages to leasing a used car. The main disadvantage of used car leasing is the impossibility for the consumer to benefit from the vehicle he or she really wants. It’s true that the range of used cars on offer is beginning to expand, but unlike leasing a new car, you don’t have the opportunity to personalize your vehicle with finishes or add options. He’ll choose the model that’s closest to the one he wants to lease, and make do with the equipment already present.
Second-hand leasing through lease-take-back
In addition to the second-hand leasing offered by dealers, there’s a novel way of obtaining a second-hand leasing contract. This is the leasing trade-in. Lease-take-back is an operation that involves taking over the contract of a lessee who no longer wishes to continue it. You take over the use of the leased used car under the same conditions and for the remaining term of the contract. This is a perfectly legal transaction, but the lessee will need to obtain the agreement of the leasing company, which will have to check the lessee’s creditworthiness before he or she is eligible. Taking over a leasing contract can be interesting both financially, in the case of an initial deposit already paid for example; and in terms of the leasing period, which is reduced compared with a new leasing contract. To find a used car for trade-in, you need to consult the advertisements on our platform, Switzerland’s leading used car leasing and trade-in platform. You’ll be able to choose from over 500 used cars available for lease in Switzerland.
