Leasing is a way of financing, if you want to think of it that way - you pay a chunk (normally) to drive away, potentially lower payments than through a financed purchase and you walk away from the residual value at the end.
I does make sense to people who want to drive new cars for 36 - 48 months then trade up. They don't have to worry about negotiating their trade value, and the only real hits they take is the big payment up front (or, potentially high monthly payments - one of them will be out of proportion compared to purchase financing) - essentially prepaying the depreciation they are willing to incur to drive a new car every 3 to 4 years - and having to be in the new car market every 3 to 4 years.
It does not make sense if you like to find good condition, lightly used cars, at a good price and drive them for years and years (like me.)
But, it's not financially crazy for the suitable market, described above. Unfortunately, for a while there, it was a vehicle (sorry, a "method") to get people with good credit scores into cars they couldn't afford. That has settled down, some.
This post was edited on 9/10 at 1:52 pm