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FAQs on car leasing

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Not happy with the car you've leased? Unexpectedly high additional costs when you return the vehicle? Leasing is a popular alternative to buying a car in Switzerland, though it does involve a number of risks. The following points need to be considered.

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    Cyril Senn

    Cyril Senn is a legal expert at AXA-ARAG, specializing in all aspects of criminal and road traffic law. He has the answer to all the important questions you have about leasing a car.

What happens if you drive more kilometers than was agreed in your contract?

If lessees drive more kilometers than was agreed in the contract, they are required to pay for excess kilometers when they return the vehicle. If lessees drive fewer kilometers than agreed in the contract, they are not entitled to any refund.

 

How much do excess kilometers cost on a car lease in Switzerland?

The lease contract will specify the kilometer price for excess kilometers. However, these costs are often excessive – they should only correspond to the actual costs. The Eurotax rule is a good solution: The residual value of the vehicle divided by 2,000 corresponds to the excess payment in Swiss centimes for each excess kilometer driven. Example: The residual value of CHF 8,000 divided by 2,000 gives CHF 0.04 per excess kilometer. 

Do I need to pay for all damage to the vehicle when I return it?

No. Normal wear and tear – such as superficial damage to wheel rims that can be repaired at little cost – is already included in the lease payments. Customers are only responsible for exceptional wear and tear to the vehicle and for damage they themselves have caused. This includes damage to the bodywork that is not just superficial and also affects the base coat, cigarette burns to the seats, or stains in the interior. In addition, a charge may be made for missing additional equipment such as warning triangles and user manuals.

To assess the loss or damage, the garage will prepare a condition report when you return the vehicle. You should read this carefully and ask for a detailed explanation of any repair costs. If you are unsure about whether everything is as it should be, we recommend making a note of it on the report and consulting an expert from Swiss Association of Independent Vehicle Experts, for example.

 

Does the car belong to me once I've paid all the lease installments?

No. The car belongs to the leasing company even after the end of the contract term. If a lessee wishes to purchase the car, the leasing company is completely free to decide whether to sell the car and at what price. The residual value specified in the lease contact is simply a calculation and not the actual selling price. However, it is possible to obtain a right of first refusal when you take out your contract. This gives you the option of buying or returning the vehicle after the end of the contract term.

The car belongs to the leasing company even after the end of the contract term. If a lessee wishes to purchase the car, the leasing company is completely free to decide whether to sell the car and at what price.

Cyril Senn, legal expert at AXA-ARAG

Can I withdraw from a lease contract I've just signed without incurring any costs?

In Switzerland you can cancel the application for a contract or the declaration of acceptance in writing within 14 days, provided the lease is for private use and the credit amount is no more than CHF 80,000. The cooling-off period starts when you receive the copy of the contract. The cancellation needs to be submitted to the leasing company or sent by registered post no later than the last day of this cooling-off period. It is essential to keep the receipt for the registered letter.

 

Can I cancel a lease contract that is already in force?

Yes. If you do so, however, the leasing company will retroactively calculate a higher lease payment based on a "residual values table". This means you will have to pay an additional amount. The longer the contract has been in force, the lower this charge is likely to be. In many cases, this end-of-contract invoice will also include "repair costs" and "charge for excess kilometers". If you have legal protection insurance which also covers lease-related disputes, you will be able to receive advice via this channel.

 

Can I return a leased vehicle if it is constantly developing faults?

Yes. However, you will first of all need to give the supplier of the vehicle an opportunity to fix the problem and tell them that you will demand nullification, or cancellation, of the lease contract and return the vehicle if the repair does not resolve the issue. At the same time, you also need to inform the leasing company of any faults and repair attempts immediately.

If you wish to cancel the contract using this option, you must be able to prove each repair attempt. It is therefore advisable to ask for confirmation every time you visit the garage; this needs to show why the vehicle was brought to the garage and what was repaired. As a rule of thumb, you – together with the leasing company – can request cancellation of contract after three unsuccessful attempts at repair.

However, leasing companies are often reticent and in some cases ask lessees to terminate the contract at their own cost and risk. Unless a decision has been reached on whether and on what terms the supplier will take back a vehicle, lessees must continue to make the lease payments in accordance with the terms and conditions for all leasing companies in Switzerland. Most terms and conditions do not set out the way in which costs are settled following the cancellation of a contract and protracted disputes often arise. Having legal protection insurance can therefore be a big help in cases such as these.

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    UPTO: the flexible car subscription

    With the UPTO brand, AXA Mobility Services AG offers an alternative to leasing: a car subscription. All charges, such as insurance, tax, motorway vignette, repairs, and servicing, are included in the monthly fixed price. Another advantage, alongside the all-round no-worries package, is the choice of subscription period, which starts from as little as six months. The subscription therefore gives you flexible access to new cars; when the contract terms ends, you can simply swap the car for a new model or return the vehicle.

    Car subscription

What needs to be considered with a car lease

  • Think carefully about whether a lease is actually the most suitable form of finance and whether you can afford it over the entire contract term. Numerous other costs are payable on top of the lease payments: motor vehicle liability insurance, accidental damage insurance with collision cover, vehicle taxes, servicing, fuel, garaging, and parking charges.
  • Contact a dealer you trust or seek relevant recommendations.
  • You have the option of obtaining a right of refusal when you take out the contract. This gives you the option of buying or returning the vehicle after the end of the contract term.
  • Read the contractual terms carefully. Ask your legal protection insurer for advice if you are unsure about signing the contract or the contractual terms. 
  • When taking delivery of the vehicle, inspect it carefully and if possible have it checked by an independent expert to make sure there are no defects.
  • If there are any discrepancies, it is often difficult for private individuals to take action against the dealer or the leasing company because although the contract is signed at the garage it is the leasing company that is the contracting party. A legal protection insurance policy can help you assert your rights against the dealer and/or leasing company.

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