Leasing a car is similar to buying a car without the responsibilities for its maintenance costs.
What do you prefer - Leasing or Buying
There are finer points in getting a car on lease or buying it in installments over a period of time. In both cases you make a payment of a fixed sum over a period but the similarities just end there itself. The leasing and the buying on installments are two different ballgames and cannot be compared to one another.
Buying a Car on Installments
When you go for purchase of your new car, you make a down payment and arrange to pay a fixed sum of money per month for your new car. Your old car might fetch some money and this might be construed as a down payment for the new car. Your monthly payments will depend on your payment capacity and your credit history.
If your credit rating is good the installments will be low or you may be allowed to repay your loan over a longer period. You remain the owner and you also pay for the maintenance of your vehicle. If you fail to make the agreed payment even for single month, the financial institute will have the right to take away your car and your credit rating will also suffer making it difficult for to get another car.
You also get the tax benefits of the depreciating value of the car. At the end of payment period you remain responsible for the depreciated market value of the car.
Getting a Car on Lease
Getting a car on lease, also involves paying a fixed sum of money to financial institution or to the owner of the car you will be driving. At the end of the period you will have the option of buying the car for a sum to be agreed. This may be a small payment but it will be at the end of period.
The maintenance during lease period will be the responsibility of the owner of car (unless you have agreed otherwise). If you do not pay the lease, the owner will have the right to take away the car from the next month. The credit rating will not have any repercussions and you might be able to find finance easily to purchase the very car that you were driving at reasonable good rate. You get no tax benefits on the property depreciation.
You are also not responsible for the depreciated value of car unless you have driven it too much and driving too much is penalized by the contract you have signed.
Leasing and renting are synonymous terms with a slight difference that the renting is usually a short term contract where as leasing is a longer term contract. At the end of renting period, you have no right to purchase the vehicle but at the end of lease period, the lessee can offer you an option to purchase the vehicle. Usually the lease payments are much less than the rental payments for the same vehicle
Buying vs. renting is purely an economic decision. If you own a company that provides vehicles to your employees, you can ask your accountant for the decisions on buying Vs renting and he will advise you better.