Second-hand or new?

Perhaps you are toying with the idea of buying a used car. To help you decide, we have compiled a summary of the advantages and disadvantages:

Overview advantages and disadvantages

Types of finance

Leasing

In the case of leasing, you pay a type of rent on the car you drive every month for a term specified by you (essentially comprising amortisation and capital costs). Before you lease a car, you are advised to take out legal costs insurance, which covers any disputes that may arise from the leasing agreement.

Contrary to the popular belief that the car does not belong to you following the expiry of the leasing agreement; you have to give it back. After you return the car, the leasing company draws up a final invoice, which you must settle, covering excess mileage, damage or extraordinary wear and tear. The leasing company offsets the deposit usually by 10%, which you generally pay when you originally buy the car, against the money owing to it.

If you find the final invoice high, have it checked! Don't just accept invoices for additional kilometres, damages of the car or extraordinary usage – these provisions have to be part of your terms and conditions and comply with the jurisdiction. Maybe your car dealer or the leasing company have given you the option to buy the car by termination of the agreement for a certain residual value. If in such case you are incertain that all provisions do comply with the regulations, look for professional advice.

Loan

The cheapest option for you is to borrow the money to buy the car from family or friends. You can also apply for a loan from a credit company. The best thing to do is to compare the various deals on offer. In addition, most dealers also offer their own finance solutions or deals.

Further Information

Touring Club of Switzerland

Cantonal Driver and Vehicle Licensing Agencies

Association of Driver and Vehicle Licensing Agencies