The term “leasing” denotes a transaction in which the owner of a specific piece of property makes that property available to another person or entity at a predefined interest rate. Instead of money being lent out – as is the case with loans – the loan is made up of property.
Cars and motorcycles are the type of property most commonly lent out using a lease. The term “consumer lease” refers to leases in which property (electronics, cars, furniture) is leased for personal use.
Leases of consumer goods with a value of between 500 and 80,000 Swiss francs are governed by Swiss consumer credit laws. As such, they are subject to the same rules and maximum interest rates which apply to cash loans, and lease contracts can be canceled within the first 14 days after signing.
Leases of investment property which serves business purposes are not subject to consumer credit laws.
Leasing is often confused with renting, but there are a few key differences. The person borrowing the property (the “lessee”) is often given the right to purchase the leased property at the end of the lease term, which is not normally the case with rentals. The lessee is generally required to cover the cost of maintaining the leased property, while maintenance costs are normally covered by the property’s owner in the case of rentals.