Renting vs. borrowing a car: what are the differences?
The holidays are here, and the idea of going away by car, at least since Covid-19 and the spiralling cost of air travel, has grown on most people. If you don’t own your own vehicle, you can either rent or borrow one, provided, that is, you are aware of some key points and differences. In this blog, we answer a range of questions such as who is allowed to drive the vehicle and who pays for any damage, and flag up points you need to be particularly careful about.
Who is allowed to drive the vehicle?
| Rental vehicle |
| Usually only the registered driver stated in the rental agreement may drive the vehicle. In many cases, drivers must be at least 21, and some providers apply a minimum age of 25 for certain types of vehicle (e.g. luxury vehicle or SUV). Generally speaking, the person renting the vehicle must have had a valid driver’s licence for at least one year. If you are driving abroad, you should take an international driver’s licence with you, especially if your driver’s licence has not been issued in one of the languages of the country you are travelling to. That makes communication easier in the event of a police check. |
| Borrowed vehicle |
| If you borrow in Switzerland a Swiss-registered vehicle from a friend or acquaintance and you possess a valid Swiss driver’s licence, you should not encounter any issues. Drivers are not subject to any minimum age restrictions. If the vehicle is registered outside Switzerland, caution is required. Owing to existing customs and tax regulations, you are not allowed to drive a foreign-registered vehicle in Switzerland with a Swiss driver’s licence unless you are the vehicle’s owner. Expect a hefty fine if the police stop you. However, a Swiss-registered vehicle may be driven in Switzerland by a person holding a non-Swiss driver’s licence. As a rule, a foreign driver’s licence is recognised in Switzerland provided it is valid. This applies in most cases for driver’s licences issued by EU and EFTA countries and by many others. We recommend that you should obtain an international driver’s licence to avoid any communication-related issues. |
What points should you pay attention to when entering other countries?
For both rental and borrowed vehicles, it is mandatory to display the rather unpopular and visually unappealing “CH” sticker when you enter a foreign country in your car. This requirement is enshrined in the Vienna Convention on Road Traffic (1968) and Article 45 of the Ordinance on the Technical Requirements for Road Vehicles (VTS). And you must display the large sticker, as the small one does not fulfil the statutory requirements.
| Rental vehicle |
| Permission to travel in a rental vehicle to other countries varies from one rental vehicle provider to another and according to the specific rental conditions. Some providers may allow travel to specific countries, while others may prohibit this. If you are planning to drive abroad, you should find out in advance about the relevant entry requirements and insurance terms and conditions. In certain cases, you may be required to obtain special authorisation from the rental company. It’s important to check through your insurance policies because the insurance cover may not apply in every country. Please see our “International Motor Insurance Card” blog for more details. |
| Borrowed vehicle |
| You should be able to cross the border and enter another country without problems. You should of course check the entry requirements and take the international insurance card with you (the vehicle registration plate is enough to prove that the vehicle is insured in neighbouring countries). You should find out about the highway code and traffic regulations of the country you are visiting as they may vary from country to country. The basic principle is that the applicable law in the event of an accident is the law of the country where the accident occurs. And that law may not be the same as the law in your home country. |
Who pays for damage to the vehicle?
| Rental vehicle |
| The person renting the vehicle themselves pays where there is no liable third party who is required to cover the costs. What’s more, the insurance coverage arranged by rental firms for their vehicles come with very high excess and exclude various parts such as wheel rims. In many cases, you can reduce the size of the excess by paying a sometimes considerable extra amount to the rental company. But there will always be a residual amount to pay. Meanwhile, there are more cost-efficient insurance solutions that completely cover the rental vehicle excess in the event of damage. |
| Borrowed vehicle |
| If the vehicle is covered by comprehensive car insurance, it may cover the cost of the damage. However, a policy excess often applies, which the borrower has to cover. What also might happen is that the vehicle owner may not want to burden their claims history with damage they did not cause. In that case, the person borrowing the vehicle must cover the entire amount of the damage. Most personal liability insurance policies offer coverage – either in the basic policy or in an additional policy – allowing the policyholder to drive other people’s vehicles from time to time. The coverage is subject to certain conditions, such as driving the loan vehicle on an occasional basis and not paying to borrow it. The list is not exhaustive and varies from insurer to insurer. |
Who pays for third-party damage caused by the vehicle renter/borrower?
| Rental vehicle |
| First of all, the rental car company’s motor vehicle liability insurance. However, it will seek recourse against the renter to recover its costs. |
| Borrowed vehicle |
| The vehicle’s motor vehicle liability insurance is required to provide advance compensation for justified and legally established liability damage to the injured party. Any excess and/or loss of no-claims bonus resulting under the policy is covered by the personal liability insurance mentioned in the previous point with regard to the occasional driving of third-party motor vehicles. The personal liability insurer may have contractually agreed exclusions of cover in this respect, too. Ultimately, the outstanding amount must be settled by the person who borrowed the vehicle. |
Is there anything else you need to consider?
| Rental vehicle |
| You should find out about the highway code and traffic regulations in the country you are visiting as these may vary from country to country. The basic principle is that the applicable law in the event of an accident is the law of the country where the accident occurs. And that law may not be the same as the law in your home country. When returning the vehicle, you should make sure you hand the vehicle back in the same condition as when collecting it in order to avoid additional fees. It is advisable to read through the rental provider’s specific terms and conditions before booking so as to avoid any misunderstandings. |
| Borrowed vehicle |
| If you move abroad permanently from your place of residence in Switzerland (or vice versa), you generally have 12 months to register your vehicle in your new country of residence. In certain cases, you would have to apply for a new domestic driver’s licence during that period, depending on the specific regulations applicable in that country. |
Key point to note
This guide is not exhaustive, and the laws and regulations may change. Before driving a rental or borrowed vehicle or even your own or a third-party vehicle abroad, we recommend that you check your insurance cover and familiarise yourself with the legal requirements.
Published on 15.04.2025