Leasing, or possibly renting something, is usually done for two reasons in lieu of buying; to avoid paying a large amount of money all in once or for tax purposes. This article will not argue against reducing your tax bill, instead it will highlight reasons why not buying it yourself might not be the best option in the mid- to long term.

 

The primary reason why buying it yourself is better, is because companies have a profit margin; which you will be paying with every monthly payment: The same goes for buying, but in that case you only have to pay once instead of for several years

Cutting costs by not being responsible for repairs or depreciation (in this case also the risk of being stuck with a worthless asset), is also not actually profitable, because these are taken into account by the leasing company and these costs are as such part of your monthly payment. Presumably the above mentioned profit margin has been added to all these foreseen costs.

One thing to consider when leasing; if your fortune changes you will be stuck making these payments, even if you can`t afford them.

Off course, there are also reasons to chose for leasing: Such as not having the money to pay or save for something. Or tax breaks, this is actually why most businesses do it. The above stated depreciation- or repair risks can also be a reason for doing so.

This also goes for housing: If you rent a place, you will be paying cost plus a profit margin. Also, as a large part of the renting market is private individuals; your rent will even be paying for their wealth tax, all the while the place you are renting will increase in value. This is rather unfair as it makes it that much more difficult to get your own place.

 

The main issue with having to rent or lease is that it largely concerns large purchases for which you need large amounts of money. So you can either figure out a way without the needed widget (as above housing example shows, this is not always possible) or cough up the cash and fatten someone else`s wallet.