Briefly explain one advantage and one disadvantage of leasing an asset over buying the asset outright

Advantage of Leasing an Asset: One significant advantage of leasing an asset, such as a car or a piece of equipment, is that it often requires less upfront capital than buying it outright. This can be particularly beneficial for businesses that need to maintain cash flow and for individuals who may not have the necessary funds to purchase the asset outright. Leasing also allows for the use of an asset while paying for it in smaller, manageable payments over time.

Disadvantage of Leasing an Asset: On the other hand, a major disadvantage of leasing an asset is that, despite making regular payments, the lessee does not own the asset at the end of the lease term. This means that they have spent money on something that they will ultimately not own. Additionally, leasing contracts often come with terms and conditions such as mileage limits on leased vehicles or maintenance requirements, which can add additional costs if not adhered to.