Outrage in Switzerland after company bosses ‘buy back luxury cars with coronavirus loans’

Swiss authorities are investigating a scheme whereby entrepreneurs allegedly used money obtained from the country’s coronavirus rescue package to buy back their luxury cars.

Outrage in Switzerland after company bosses 'buy back luxury cars with coronavirus loans'
A Ferrari pictured in Monaco. Photo: VALERY HACHE / AFP
As reported in the Tages Anzeiger, a number of Swiss entrepreneurs accessed the funds – but used the money to ‘buy back’ their luxury cars, which they had used to secure loans from upmarket Swiss automobile pawn shops. 

Cedric Domeniconi, who founded automobile ‘pawn shop’ Auto Pfandhaus, told Swiss newspaper 20 Minutes that since the lockdown started, several entrepreneurs were suddenly flush with enough cash to buy back their fancy cars. 

The car brands included Ferraris, Porsches, Rolls Royces, Aston Martins and Mercedes. 

The Swiss government made more than CHF60 billion available as part of the coronavirus rescue package, with CHF40 billion put on the table in low-interest business loans. 

“Since the emergency aid for the Covid 19 pandemic started, we have conspicuously picked up many luxury cars from entrepreneurs.”

“We know that many customers use the emergency loans to buy back the pledge that they originally covered with their car.”

The car pawnshop provides loans up to a maximum of CHF100,000. 

Although coronavirus loan regulations state that loans cannot be used to service other loans, the Tages Anzeiger writes that crafty financial moves have enabled this to take place. 

This is because ‘car mortgages’ – i.e. loans where a car is used as collateral – do not appear on Swiss debt registers. This means that transactions can be made without the corresponding data being traceable the paper reported. 

Fraud in Vaud

It comes after news from the western canton of Vaud, where the Public Prosecutors Office was looking into an alleged multi-million franc fraud of coronavirus support money. 

The fraud was discovered by banks in the canton, who informed the federal police that money received as part of the coronavirus stimulus payments had been transferred abroad. 

The alleged perpetrators are Swiss nationals from Turkey, who are suspected of having transferred several million dollars received under the coronavirus loan scheme abroad. 


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Reader question: Can I put my Swiss health insurance on hold if I’m abroad?

Given how expensive health insurance premiums are in Switzerland, you may be tempted to suspend your policy while you are abroad. Is this possible?

Reader question: Can I put my Swiss health insurance on hold if I'm abroad?

Unlike the obligatory car insurance, which you can suspend temporarily by depositing your registration plates at the local motor vehicles office, rules pertaining to health insurance are much stricter.

As the Federal Office of Public Health explains it, “If you leave the country for a certain period to travel or study but do not take up residence abroad, you are still required to have [health] insurance in Switzerland”.

In other words, as long as you are a registered resident of Switzerland, regardless of your nationality or passport, you must keep your compulsory Swiss health insurance and pay your premiums. While you do this, you also remain covered against most medical emergencies while you travel.

However, rules are less stringent for supplemental health plans which can, in some cases, be put on hold, depending on the insurance provider, according to Switzerland’s Moneyland consumer website.

The only exception allowed for suspending the health insurance coverage is during a military or civil protection service which lasts more than 60 consecutive days.

“During these periods, the risks of illness and accident are covered by military insurance. Your health insurance provider will refund your premiums”, according to FOPH.

Under what circumstances can you cancel your Swiss health insurance?

Swiss law says you can cancel your insurance if you are moving abroad, either permanently for for a period exceeding three months.

If you do so, only claims for treatments given while you still lived in Switzerland will be paid by your insurance; any medical bills for treatment incurred after you officially leave will be denied.

These are the procedures for cancelling your compulsory health insurance if you leave the country under conditions mentioned above

To announce your departure abroad, you must send your insurance carrier a letter including your name, customer number or AVS/AHV number.

You must also include a certificate from your place of residence in Switzerland confirming that you have de-registered from your current address, as well as the date of your departure.

Note, however, that if your new destination is another Swiss community / canton, rather than a foreign country, your insurance can only be cancelled from the following calendar year and only if you present proof of having taken up a new policy with another company.

READ MORE: EXPLAINED: How to register your address in Switzerland

You can find out more information about this process here

If you suspend your health insurance for less than six years, you can reactivate it at a later date with the same company when you return to Switzerland.

READ MORE : What you should know about your Swiss health insurance before you go abroad