Tankless water heaters offer several advantages over traditional storage tank water heaters. They provide endless hot water, eliminating the worry of running out during peak usage times. Tankless systems are more energy-efficient since they only heat water when required, leading to lower utility bills. They also occupy less space, making them suitable for smaller living spaces. Additionally, tankless water heaters have a longer lifespan compared to tank-type heaters, reducing the need for frequent replacements.