When you finance a vehicle, you are paying instalments to the financial institution who has paid in full for your vehicle. Each payment goes towards the total financed amount owed on the vehicle, until the total amount has been paid. When leasing a vehicle, you are making payment instalments to a financial institution for a contracted time period. At the end of of this term, you can either return the vehicle to end your contract, or pay off the remaining amount owed on the vehicle.