Differences between Leasing and buying:

Ownership- When you lease a vehicle you do not own it, you are paying for its use for a definite period of time. At the end of your lease agreement the vehicle must be returned or often you have the ability to buy it.

Costs- When leasing there are usually minimal up front costs. You may be required to pay a refundable security deposit, a deposit, taxes, registration fees and sometimes other fees associated with your lease agreement.

Monthly Payments- A lease payment is generally lower than a financing payment because you are not paying to purchase a vehicle. You are instead paying a set about to compensate your leaser for the vehicles depreciation and rental fee.

Pros of leasing

As you don't own the vehicle you are not running the risk of future value loss. At the end of your lease agreement you can walk away as you don't own the car. It also tends to be cheaper to lease for short use vehicles and as leased vehicles tend to be new they are less likely to cost you much money with repair bills.

Cons of Leasing:

Though it is not strictly speaking a con, remember, you do not own the car. All that money you have spent on payments is gone. The major con of leasing a vehicle usually only impacts people who end up breaking the terms of a lease contract. The most common way this happens is when you use more than the allotted mileage according to your lease agreement. You are also usually required to service the vehicle through your leasor which may be more expensive than to do it yourself or by going to an independent automotive service provider. There have also been instances of high fees and repairs required when you return a leased vehicle. This is usually termed 'excessive wear'.

Summary

When you lease a vehicle you are buying the right to use it for an agreed upon time limit and mileage. You do not own the car and can simply walk away from it when your lease agreement is over. If you violate your lease agreement by excessive wear, to many miles, or by terminating early you will be hit with substantial penalties. That being said leasing is often the most cost effective way of obtaining a vehicle, especially if you only want it for a short while.