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Company executives buy luxury cars with corona loans – economy

Some entrepreneurs in Switzerland misuse the Corona loans and use them to buy back their pledged luxury cars. The owner of a pawnshop tells how this is possible.

To save companies because of the lockdown, the Swiss government, like many other countries, adopted a multi-billion dollar rescue program in March. CHF 40 billion (equivalent to EUR 37.7 billion) was made available to small and medium-sized enterprises (SMEs). Like the Swiss “Sunday newspaper” Now reported, some entrepreneurs abuse Corona loans. Instead of bridging their financial constraints, they buy back their pledged luxury cars.

Cedric Domeniconi, who built an online car pawnshop with a partner, says: “Since the emergency aid for the Covid 19 pandemic started, we have conspicuously picked up many luxury cars from entrepreneurs.” The pawnshop grants loans up to a maximum of CHF 100,000 (around EUR 94,400).

No notification to the information center

According to Domeniconi, customers who primarily come from the construction, real estate and financial sectors do not have to give any reasons for the release of their mortgaged cars. “But we know that many customers use the emergency loans to buy back the pledge that they originally covered with their car.” He lists car brands such as Aston Martin, Ferrari, Mercedes AMG, Porsche and Rolls Royce.

The regulation on the Covid 19 loans stipulates that the aid funds may not be used to refinance other loans. But that can be easily avoided, as the “Sunday newspaper” writes. The reason: car mortgages do not appear in any Swiss debt register. In addition, unlike consumer credit, there is no need to report to an information point. Likewise, the transactions are mostly carried out with cash – thus data traces can be avoided.

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