<P> Vehicle leasing is the leasing (or the use) of a motor vehicle for a fixed period of time at an agreed amount of money for the lease . It is commonly offered by dealers as an alternative to vehicle purchase but is widely used by businesses as a method of acquiring (or having the use of) vehicles for business, without the usually needed cash outlay . The key difference in a lease is that after the primary term (usually 2, 3 or 4 years) the vehicle has to either be returned to the leasing company or purchased for the residual value . </P> <P> Vehicle leasing offers advantages to both buyers and sellers . For the buyer, lease payments will usually be lower than payments on a car loan would be . Any sales tax is due only on each monthly payment, rather than immediately on the entire purchase price as in the case of a loan . Some consumers may prefer leasing as it allows them to simply return a car and select a new model when the lease expires, allowing a consumer to drive a new vehicle every few years without the responsibility of selling the old vehicle, or possible repair costs after expiry of the manufacturer's warranty . A lessee does not have to worry about the future value of the vehicle, while a vehicle owner does . For a business lessor there are tax advantages to be considered . </P> <P> For the seller, leasing generates income from a vehicle the seller (or manufacturing corporation) still owns and will be able to lease again or sell through vehicle remarketing once the original (or primary) lease has expired . As consumers will typically use a leased vehicle for a shorter period of time than one they buy outright, leasing may generate repeat customers more quickly, which may fit into various aspects of a dealer's business model . </P> <P> Leasing's average retail market penetration rate in the United States for new passenger vehicles reached an all - time record high of 26.5% in February 2014 . This represents a recovery from a severe drop during the financial crisis of 2007--08 . As of 2016, leasing accounted for about 25 percent of total vehicle sales or 31 percent retail sales in the United States . </P>

Who owns a car when it is leased