What Are The Advantages Of Leasing?

The lease system of suing assets has the following advantages to the lessee.
No Down Payment:  As against hire purchase or installment sales,  the lease does not require making down payment, thus, cash is saved that may be invested elsewhere.
Capital Saving : Capital amount is saved if the firm decides to finance its needs by leasing  instead of buying.

No Risk of Obsolescence:  The risk of obsolescence  of leased assets is averted. When  a new invention, model , or an improved product like computers or cars is introduced into the market the lessee may ask the lessor  to replace  the old asset with the new  one without  any extra financial burden . Moreover, the old asset so replaced may be released to another lessee. At a time when new inventions and product innovations are coming up at rapid pace the lease method of financing is a blessing for the lessee who becomes enabled to always  keep modern equipment . However , if the chance of obsolescence are higher the lessee has to pay  larger lease amount . But it depends on the predictability of the obsolescence and the salvage  value.

No Conditions & Restrictions: Borrowing involves many restrictions and conditions . Such typical  restrictions are not applicable  to the lease.