This is similar to a Hire Purchase agreement, but rather than paying back the full amount of the car, you agree to pay back the difference between the sale price and its price for resale.
When the term comes to an end you have the option to pay a final payment (resale price of the car) and keep the car, hand the car back and pay nothing or trade the car in and start all over again.
This finance method results in lower monthly payments, but to own the car you will have to pay the final settlement, which can be substantial in many cases.