With leasing, you simply pay a small initial amount, usually equivalent to three monthly payments, at the start of the lease. Then each month you pay a fixed monthly payment for the term of the agreed lease. You will have an agreed annual mileage allowance for the lease to meet your requirements (Excess mileage charges will apply if you exceed the contract mileage.) At the end of the lease period (typically two or three years), you simply hand the car back. Some methods of funding (not all) allow you to buy the vehicle at the end of the agreement for a fee, known as a balloon payment, if you wish.