Leasing is usually a better alternative for an individual or company who intends to use the vehicle for a few years only. That is because they only pay for the use of the car and not the entire value of the vehicle.
In Singapore, car ownership is a misnomer at best. After all, with loans stretching to nine years 11 months, and necessary scrapping before 10 years if the 'owner' chooses not renew the COE, it is entirely plausible that the log card - the deed of ownership - will never be in the hands of the so-called 'owner' but the finance company. Most of us are actually mere 'hirers' of cars. Yes, the car is registered in our names, but we never really possess it if we do not hold on to the cars till the loan is fully repaid.
Leasing is an alternative that is highly popular in the West. Though hire-purchase is the car financing instrument of choice in Singapore, leasing is set to grow in popularity, especially among companies trying to simplify the difficult process of owning a car in Singapore. The market for leasing has been relatively robust, especially among the expatriate community. With leasing, the customer- or lessee- chooses the car of his or her choice. Having chosen the car, the lessor steps in to buy the car and leases it to the customer. The lease agreement will specify the term of the lease - anywhere from 2 to 5 years - and the lessee only needs to make the monthly payments to the company. Issues like road tax, insurance and even maintenance, are settled by the lessor. A replacement car is even provided when the car is in the workshop. The customer also gets to change his car every 3 to 5 years for a newer model and does not have to get entangled with the mess of disposing off the old car.
Leasing makes a lot of sense, especially for companies. From a financial point of view, a leased car is an expense. Also, a leased car is much easier to administer for any company or individual, who only pay for the car according to use and caps risk associated with loss of value of the assets.