on hand and if they do, they will often buy a vehicle with cash and own it for 10+years. A single pay lease is a good way for a dealership to flip someone who is a cash buyer to finance. But there are cases when it's much better for the customer such as an instance where your looking at a luxury vehicle that the lease is structured with a residual value that is much higher than what the market will dictate at the end of the term.

For example a BMW, Merc, Audi, Cadillac ect that the manufacture's finance arm says has a 50% residual for 36 months, when the actual market percent at the end of the term is closer to 40%. It becomes a real bad idea to buy some cars with cash if there is a possibility that you will try to get out of the car 3-5 years later. Just do a single pay lease and have the bank worry about the depreciation.

I was looking over US Banks residuals the other day and the BMW 7 series had 36 month residuals between 27 and 35%, which in horrid. No one does those leases. They lease through BMW financial who in order to sell more vehicles will inflate the residuals up to 45 percent or higher. I don't know how they come out at lease end on those vehicles as the residual values are not guaranteed by the customer or dealer. These units have to go through an auction and get picked up at market value.