Quality leather lasts forever, smells better, and is very comfortable. The downside is that it requires maintenance -- you do need to break it in, and it will form around your body. You also need to treat the leather every six months or so otherwise it may crack, and many don't do that. But if well maintained, it will last over a hundred years, much longer than the life of the car. And it will fit to your body like a glove and accumulate pleasing stains. The other downside is that it's not as quiet as cloth.

Most leather car seats are not made of quality leather, they are made of what can best be described as leather paste, bits of leather dust kept together by glue and pre-stained. The problem with this is that it doesn't last as long as actual full grain leather and degrades with sunlight. It is much cheaper though than full grain leather.

The modern vinyls used in the fake leather are softer than the earlier vinyls and also address the odor and cleaning problems with cloth, but they don't have the feel or durability of full grain leather. There is a real difference sitting on vinyl versus sitting on leather, even for the modern textured seats as in the latest BMWs with leatherettes (BMW has the highest quality fake leathers, but it's still the less popular option). They are also cheaper. Whether or not the leatherette seats last longer than the leather paste seats is primarily a function of the quality of the pastes/plastics/vinyls used in each. You can get expensive versions of both that should last longer but none will even begin to approach the longevity of full grain leather that is regularly cared for. You can find leather thousands of years old in museums -- there is a 5,500 year old leather shoe. Lather lasts forever and becomes softer and more pleasing with use. That is the appeal, but it's not for everyone. Like other consumer products, people want more disposable things that don't require maintenance or time to break in. The idea of buying something a bit tough and rigid that becomes more soft and supple over time is something most consumers don't want. Even when they buy leather, they want to buy the pre-stained leathers that are artificially stained rather than letting the leather naturally stain with age. Real leather is a truly old-fashioned material, made for the era when you bought one jacket and kept it for life, letting it change with your body. Or one belt for life that became more supply with time, something that you took care of and maintained.

The main thing cloth seats have going for them is that they are more quiet and cheaper to produce. In the very early days of the automobile, cloth seats were very expensive to produce relative to leather and so were the luxury option. Also the wealthy would reupholster their seats if they got stained or smelly. But that changed very quickly, and most still consider full grain leather seats to be the most luxurious option in terms of durability, odors, and feel, even if they are less practical than vynils or other materials that don't require treatment.