How do people buy cars in Europe?

Leasing boom - the profitable business of the "auto banks"

Jump to content
  1. News
  2. economy
  3. Current article
content

Car companies finance new and used cars with their own «banks». Leasing in particular is a billion-dollar business.

The Competition Commission (Weko) fined leasing companies on Thursday, including “Amag Leasing AG” (see box). With a fine of 8.5 million francs, Amag has to pay the highest sum of the seven fined leasing companies.

Leasing has become an important part of the automotive industry in recent years. In addition to the development and production of cars, the companies under the corporate umbrella often also have their own «bank». At the American car company Ford, the corresponding financial institution in Europe is called “Ford Credit Europe Bank” (FCE Bank). At Daimler it is the “Daimler Financial Services” division and at Amag, the largest car importer in Switzerland, the subsidiary is called “Amag Leasing AG”.

Corporations finance their own vehicles

The purpose of these «banks» is always the same: they finance new or used vehicles. Usually this is done via a leasing contract that is concluded between the end consumer and the “auto bank”. The contract regulates the conditions under which the consumer may use the vehicle. Use is usually paid for in monthly leasing installments, with the car companies or their “bank” usually remaining the owner of the vehicle.

The proportion of leased vehicles has been rising steadily for years: depending on the make and model of the car, 30 to 75 percent of new vehicles are now financed through leasing contracts. The corporations also use car leasing as a marketing measure to boost sales of their own new vehicles.

Many consumers prefer to spend a few hundred francs a month on leasing instead of spending a five-figure sum on a new car every few years. In Switzerland, on average, an old car is replaced with a new one almost every nine years.

Leasing contracts as a lucrative source of income

Leasing is a billion-dollar business for the car companies. Daimler, for example, signed almost one million new financing and leasing contracts in Europe worth almost 32 billion euros in 2018. At BMW, there were almost two million new contracts worldwide in the same period. Equivalent: 55.8 billion euros. Both are new records.

In fact, the car companies use leasing to finance consumers' vehicles in advance. However, this service ties up a lot of capital. Accordingly, the car companies can be compensated for this service. With the leasing installments, consumers not only pay for the use of the car, but also cover the capital costs of the car companies.

Since interest rates have recently fallen sharply and the corporations can borrow new money cheaply, the leasing business has developed into a lucrative source of income for many car companies. Especially against the background that the margins when selling new cars are often small. This fact is exemplified by the ailing auto company Ford. The annual turnover in 2018 was 160 billion dollars. The bottom line is that Ford earned $ 5.4 billion in the auto division and $ 2.6 billion in the leasing business. The trend is increasing.

The example of Amag

Open the box Close the box

Amag Leasing AG is the “bank” of the Amag Group. Last year, it sold almost 82,000 new VW, Skoda, Audi and Seat vehicles in Switzerland. At the same time, the subsidiary Amag Leasing AG concluded 54,000 new leasing contracts worth 1.5 billion francs in the same period. A new record. In 2013 there were only 44,000 leasing contracts. The number of contracts has also reached a new high: At the end of last year, Amag Leasing AG had 148,000 ongoing leasing contracts.

The bottom line is that leasing is a profitable business: the company has to write off less than 0.1 percent of all leasing contracts. At the same time, the cost of capital fell sharply due to the favorable interest rate environment, so that in 2018 Amag Leasing AG achieved a record profit of 68 million francs.

  1. News
  2. economy
  3. Current article
Shut down

Always well informed!

Receive all news highlights directly via browser push and always stay up to date. More

Push notifications are brief messages on your screen with the most important messages - regardless of whether srf.ch is currently open or not. If you click on one of the notes, you will get to the corresponding article. You can deactivate these notifications at any time. Fewer

Activate push notifications

You have already hidden this notice about activating browser push notifications several times. Do you want to hide this notice permanently or be reminded of it again in a few weeks?

Most read articles

Scroll left Scroll right

Social login

For the registration we need additional information about yourself.

{* #socialRegistrationForm *} {* firstName *} {* lastName *} {* emailAddress *} {* displayName *} {* mobile *} {* addressCity *} {* / socialRegistrationForm *}

Welcome back

Please log in to enter a comment.

{* loginWidget *} Use a different account

Login and register


Log In

{* #signInForm *} {* signInEmailAddress *} {* currentPassword *} Forgot your password? {* / signInForm *}

Simply log in with your social media account or your Apple ID

{* loginWidget *}

Create a new password

Enter the email address of your user account. We will then send you a link that you can use to create a new password.

{* #forgotPasswordForm *} {* signInEmailAddress *} {* / forgotPasswordForm *}

Create a new password

You will shortly receive an email with a link to renew your password.

Didn't get a message?

If you have not received an e-mail after 10 minutes, please check your SPAM folder and the details of your e-mail address.

Welcome back

Please log in to enter a comment.

{* #signInForm *} {* signInEmailAddress *} {* currentPassword *} Forgot your password? {* / signInForm *} Use a different account

Technical error

Oh oops! A technical issue occured. Please try again later or contact our customer service.

Confirm mobile number

So that you can enter a comment, we ask you to confirm your mobile number. We will send you an SMS code to the mobile number.

There has been an error. Please try again or contact our customer service.

Too many codes have already been requested for the mobile number. The function is blocked to prevent misuse.

Too many attempts. Please request a new code or contact our customer service.

Change mobile number

Too many attempts. Please request a new code or contact our customer service.

This mobile number is already in use. Please change your mobile number or contact our customer service.

Change mobile number

The maximum number of codes for the specified number has been reached. No more codes can be created.

Confirm email address

We have sent you an email at the address {* emailAddressData *} Posted. Please check your e-mail inbox and confirm your account using the activation link you received.

Didn't get a message?

If you have not received an e-mail after 10 minutes, please check your SPAM folder and the details of your e-mail address.

Adjust user data

{* resendLink *}

Register and login


to register

With an SRF account, you have the option of entering comments on our website and in the SRF app.

{* #registrationForm *} {* firstName *} {* lastName *} {* emailAddress *} {* displayName *} {* mobile *} {* addressCity *} {* newPassword *} {* newPasswordConfirm *} {* / registrationForm *}

Confirm email address

We have sent you an email at the address {* emailAddressData *} Posted. Please check your e-mail inbox and confirm your account using the activation link you received.

Didn't get a message?

If you have not received an e-mail after 10 minutes, please check your SPAM folder and the details of your e-mail address.

Adjust user data

{* resendLink *}

Your activation email has been sent

Please check your e-mail inbox. The activation email has been sent.

Verified email address

Thank you for verifying your email address.

user account

In this view you can manage your user data.

{* savedProfileMessage *} {* / editProfileForm *}

Change Password

Deactivate account

User data saved successfully

You can view your data in your user account at any time.


Adjust user data

Change Password

Define a new password for your account {* emailAddressData *}.

{* #changePasswordForm *} {* currentPassword *} {* newPassword *} {* newPasswordConfirm *} {* / changePasswordForm *}

Create a new password

Define a new password for your account.

{* #changePasswordFormNoAuth *} {* newPassword *} {* newPasswordConfirm *} {* / changePasswordFormNoAuth *}

Password saved successfully

You can now log in to the article with your new password.

Create a new password

We did not recognize the code to reset the password. Please re-enter your email address so that we can send you a new link.

{* #resetPasswordForm *} {* signInEmailAddress *} {* / resetPasswordForm *}

Create a new password

You will shortly receive an email with a link to renew your password.

Didn't get a message?

If you have not received an e-mail after 10 minutes, please check your SPAM folder and the details of your e-mail address.

Deactivate account

Your account will be deactivated and you will not be able to reactivate it. Recorded comments are not deleted.

Do you really want to deactivate your account?

{* deactivateAccountForm *} {* / deactivateAccountForm *}

Account deactivated

Your account has been deactivated and can no longer be used.
If you would like to register again for the comment function, please contact SRF customer service.

  • Comment from pedro neumann (al pedro)
    The tragic thing is that leasing is just a symptom of a sick society and a decadent system. Saving and doing without seem to be foreign words today. "Enjoy now-pay tomorrow ... or not at all" is the motto. In old age people have nothing and throw themselves into the social hammock of the communities. The stupid saver can then finance the nursing home with the taxes.
    Agree agree to the comment
    1. answer from Albert Planta (Plal)
      The economy has always wanted people to spend their money and the ruble rolled. In capitalism, the economy has to grow.
      Agree agree to the comment
    2. Show answers
  • Comment from Ueli von Känel (uvk)
    The car as an aid, as a means of transport at work or otherwise is okay. But the car has long since become a status symbol for many. Even a little peer pressure can be observed: At first, 1 dark blue, sparkling clean BMW drove up and down an Oberländerstrasse. Two months later it was 2. A year later it was around 10. At a well-frequented kiosk, very young people get out of an expensive "sled" - spoiled sponsored guys. Not good development!
    Agree agree to the comment
  • Comment from Sivan Strauss (SivanStrauss)
    You shouldn't lease a car either. If you can't afford one, you save money or buy a cheap used one. I bought an Aston Martin Rapide S Coupe from 2014 for 214,000Fr. bought without leasing. Earn 130k as a software engineer. So had to save a bit.
    Agree agree to the comment
    1. answer from Jürg Brauchli (Rondra)
      Now are you here to show off? And use the SRF article as a welcome opportunity to get rid of it?
      Agree agree to the comment
    2. answer from Sivan Strauss (Sivan Strauss)
      No, but just wanted to make it clear that saving is more than leasing. That way you only get caught in the debt trap and the car doesn't belong to you either. One could also speculate on the stock exchange rather than leasing something. This is even more secure. My grandfather became a millionaire as a leisure stock trader.
      Agree agree to the comment
    3. Show answers

Footer


Metanavigation