[bcrdukes]

I'll let 68style speak to this in more detail, but in general, when leasing, you, the driver of the car, do not own the vehicle (the asset.) You are simply paying the owner (in this case, let's use BMW as an example) to use the asset from BMW for a fixed duration, and a fixed amount of mileage (plus whatever additional mileage you incur, including repairs etc.) What you are effectively doing is covering the cost of depreciation by using the vehicle. At the end of the lease, you return it to BMW and get a new car from let's say Lexus or Acura etc. Problems/repairs, and what have you, are the liability of BMW, and not you, hence why BMW will want to ensure whoever insures (the insurance company) their vehicle, meets their financial and risk policies/requirements.

Aside from the usual business expense write-off (its not as glamorous as everyone thinks) you cannot declare a leased vehicle as an asset. It is a liability in most cases. Say if you went to the bank tomorrow to apply for a mortgage, your mortgage specialist will ask you to declare your assets and liabilities. You can't tell them the vehicle you own is worth $14,500 (or whatever it is) because you don't own it; BMW does. Whereas let's say you actually owned/financed a vehicle, you own the vehicle, so if you chose to only drive your brand new BMW M3 with only basic insurance, that's on you, and the asset itself, is worth, I don't know, let's say $76,000 to the bank, then that is your declared asset to the bank, and they may or may not hold the vehicle as collateral in the event you default on your mortgage. They come in, repo it, and fuck you up for a long ways to come to recoup their losses. When you lease it, they can't do that.

Edit: I would go out on a limb to say that leasing is not "bad" it just depends on your circumstances, situation, and short and long term goals. There are pros and cons to both methods of vehicle ownership, but that deserves another thread in itself.