In the current economic climate it is becoming increasingly hard to lay down large sums of money at any one time. Rather than having your capital tied up in equities it is becoming more and more preferable to always have some cash at your disposal. Therefore tasks such as buying a car are becoming more and more daunting, as even if you take out a new car loan, in order to avoid high interest rates the down payment you will have to pay will leave a considerable hole in your pocket alone. Therefore schemes have been set up where rather than buying a car, you can lease it. This means that rather than paying full whack for the car of your dreams, you have much smaller monthly payments which will only serve to pay for the depreciation of the vehicle which occurs in whilst you are leasing, plus any extra charges such as the financial rate and the sales tax. All together this is considerably less than the full price of the actual car.

In summary when you lease you get all the advantages of a brand new vehicle - as opposed to buying a second hand car - but you can pay at an affordable rate.