Why not just renew it every year? There is no reason you can't just renew every year, maybe you only need the domain temporarily or you are speculatively registering a domain name for a new idea. In this situation the ability to register a domain for only 1 year is perfect. There are however some good reasons why registering your domain name for longer makes more sense.
Protect your identity
Your domain name is your online identity, whether it's the name of your business or your own name, loosing your domain can have serious repercussions. Yearly registrations potentially expose more opportunities to lose your domain name e.g. you change your email address and renewal notices don't reach you. Once your domain expires your website and email can go down affecting your business. If your domain has expired and goes into Redemption you will have to pay more to redeem and renew it. In the worst case scenario you miss the Redemption period and someone else registers your domain which may result in a costly re-branding exercise. Registering your domain for longer periods reduces the risk of all of this happening.