Definition
A lease is a rental agreement for property.
Analysis
Leasing is an option that allows for consumers to enjoy the use of property without having to deal with the potential perils of ownership. Homes, cars and even equipment can be leased.
A lease is governed by a lease contract, which specifies the term of the lease, the amount of periodic payments, the due dates of payments and any down payment required. Open-ended leases may be renewed by the consumer with a new set of terms. Closed-ended leases require consumers to relinquish the property at the end of the term.
A leasee may enjoy leased property and in most cases is free from charge for any reasonable wear and tear. Exceptional wear, abuse or overuse may trigger additional charges that are due at the end of the lease.
Leasing tends to be more expensive than purchasing. However, many consumers prefer to limit the use of the property to only 2 or 3 years, and then want the freedom to move on to another option.
