Comparison between leasing and buying:

Usually business organizations prefer leasing cars in order to avoid additional tax and account tax benefits. But when a person capable of  adjusting money by availing loan from bank at less interest charges try to procure a latest car. It is best option to acquire car when you are confident that you use it regularly and the idea of car buying is avoided when you plan to exchange it after 2- 3 years of its use.
According to American recovery act of 2009, that people buy car after February are eligible to pay the federal tax as well as local tax will be included with this.  The car buying involves taking car loan from a reputed bank and the payment period will be from 36-48 months. The interest rate for 36 months is 7.09 and car loan interest rate for 48 months is 7.24. Because of recession, many automobile companies are promoting their sales by offering huge discounts. The depreciation is major problem associated with car purchase. It takes 4 years to complete the loan and after the repayment of loan, the depreciation cost, the resale value of car becomes less than anticipated.  Sales tax is paid monthly and the tax amount can be deducted on using car for leasing purpose. And in case of own car, the tax amount is not reduced and the amount is not paid monthly. For business people in order to reduce the tax and be liable, then leasing is best option. If you trade with cars then it is better to choose leasing, as the cars are used rashly by customers.
However buying car gives the sense of owner ship. But hiring a car is much beneficial than purchasing. On Car leasing, the tax will be not charged, the business firms pay complete tax for a year which assists them in reducing the tax payments. Generally advance payments are not required for hiring car when you hire it for a shorter period. But when you make it for longer time, then the tax is high than that of buying car. And on every time when lease a car, you have greater chance of driving new car with latest features that assures safety on long trips.  Some strict penalties are imposed when you cross the leasing limits.

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