What is a security deposit on a lease?

A security deposit is a refundable amount some lessors require at signing to cover potential end-of-lease charges such as excess wear or mileage. Many leases today don't require one, but some do, especially with lower credit. A few lessors offer multiple security deposit programs, where refundable deposits lower the money factor. Policies vary by lessor, so ask whether a deposit is required and how it's refunded.