What is one advantage of leasing an asset?

Leasing an asset often provides lower monthly payments compared to purchasing it outright. This is primarily because when you lease, you are essentially paying for the usage of the asset rather than the full cost of ownership. This allows businesses or individuals to manage cash flow effectively, as they can preserve capital for other expenses or investments. Lower monthly payments can make it easier to budget, allowing a business to allocate funds elsewhere, potentially leading to increased profitability.

In contrast, owning an asset typically involves higher upfront costs, which can strain financial resources. Additionally, leasing does not confer ownership at the end of the lease period, contrary to the first option which suggests that ownership is acquired after the lease. Finally, while leasing may provide limited liability for payments, this aspect varies by contract terms and may not be as straightforward as the benefits of reduced monthly payments.