Question

Someone may choose to own a car instead of leasing because

Answer 1

Someone can choose to own a car instead of leasing it because the car can be resold later to make some money back.

Further Explanation:

Owning a car: When a person buys the car it becomes the asset of that person. The person becomes the owner of the car after the payment of the value of the car. After the purchase of the car, the owner does not have to follow any condition as the car is owned by him. The owner can use it in any manner and sale it anytime he wants. The re-sale amount of the car is lower than the purchase amount of the car.

Leasing a car: The lease is an agreement between two parties for the use of an asset for a definite period in the exchange of some monetary compensation. When a car is leased the person does not get the ownership of the car. They have to pay the periodic (monthly, quarterly or yearly) installment as rent for the use of the car. The user of the car has to return the car at the end of the lease. The lessor may put some conditions regarding the use of the car. It restricts the free use of the car.  

Choosing purchase (own) of a car instead of leasing:

The person can choose to purchase (own) the car because the owner of the car can resale it anytime and realize some value of the car.

The owner of a car has all the rights related to the car. In the case of leasing, the lessee does not have rights related to the re-sales of the asset. The lessee has to return the car when the lease agreement ends. The lessee would not get any monetary compensation in case of returning the car, but when the owner of the car sells it, he would realize some money.

Thus, someone can choose to own a car instead of leasing it because the car can be resold later to make some money back.

Learn more:

1. Learn more about choosing the purchase of car or leasing

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2. Learn more about choosing the purchase of the car

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3. Learn more about renting and owning

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Answer details:

Grade: Senior School

Subject: Accounting

Chapter: Leasing

Keywords: Leasing, purchase, lease agreement, ownership of the asset, asset, someone, may choose, own a car, instead of, leasing, resold, some money back, later, higher price, maintenance costs, leased car are generally higher, insurance costs, higher.

Answer 2

Someone may choose to own a car instead of leasing because they may end up needing to drive it farther and longer than the set milage or wanting to own the vehicle outright instead of making lease or rental payments. If you damage the vehicle, it also becomes more expensive because you do not own it entirely. Reporting damage or mile overage to the leasing company results in fees and penalities.