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- Compare leasing and buying by net cost over the same period, not by monthly payment.
- The net cost of buying counts your down payment, loan payments, maintenance and any balance still owed, then subtracts what the equipment is worth at the end.
- In the default example, buying costs $15,889 less than leasing over 48 months.
- The result depends heavily on resale value, so test a low and a high figure.
How to use the equipment lease vs buy calculator
Enter the equipment price and lease terms
Add the price, the lease term in months, the monthly lease payment and any costs you pay at signing.
Enter the buying terms
Type your down payment, the loan rate and the loan term in months.
Estimate the end value
Enter what the equipment would be worth when the lease would end. If you plan to keep it after the lease, enter the buyout price too.
Add maintenance and compare
Open the advanced option for yearly maintenance as an owner or lessee. The result shows which option costs less and by how much.
How lease vs buy is calculated
Both options are measured over the lease term. Each one adds up the cash you pay out, then subtracts the value of anything you still own at the end.
Net cost of each option
Lease net cost = upfront costs + lease payments + maintenance + buyout
Buy net cost = down payment + loan payments made + maintenance + loan balance still owed
Buy net cost = (the sum above) − value of the equipment at the end
If you return the equipment, you own nothing at the end of a lease. If you buy it out, subtract its value from the lease cost too.
The loan balance still owed is treated as paid from the sale of the equipment, so it counts in the cost.
Equipment lease vs buy examples
Example 1: A $50,000 machine over 48 months
Lease: $1,200 a month with $2,000 at signing. Buy: $10,000 down, a 7.5% loan over 60 months and $1,500 a year in maintenance. The machine would be worth $20,000 at the end.
- Lease net cost $59,600
- Loan payment $801.52 a month
- Loan balance after 48 months $9,239
- Buy net cost $43,711
- Difference Buying is cheaper by $15,889
Leasing works out to about $1,242 a month and buying to about $911 a month.
Example 2: The equipment holds less value
Same terms, but the equipment would be worth only $8,000 at the end.
- Buy net cost $55,711
- Lease net cost $59,600
Buying is still cheaper, but by $3,889 instead of $15,889.
Example 3: The equipment loses almost all its value
Same terms, but the equipment would be worth only $2,000 at the end.
- Buy net cost $61,711
- Lease net cost $59,600
Leasing now wins by $2,111. In this example the two options cost the same when the equipment is worth about $4,111 at the end.
Lease vs buy: what to consider
- How long you will really need the equipment
- How quickly it loses value or becomes outdated
- Cash available for a down payment
- Who pays for repairs and maintenance
- Tax treatment of lease payments, depreciation and interest
- Mileage, usage or return condition limits in the lease
Who uses an equipment lease vs buy calculator
Contractors
Compare leasing and buying trucks, excavators and tools.
Restaurants
Weigh ovens, refrigeration and kitchen equipment options.
Medical and dental offices
Check imaging and treatment equipment costs over time.
Small manufacturers
Compare machines that may become outdated before the loan ends.
This compares costs only. Tax rules, lease structures and financing terms vary, so talk to your accountant before you decide. For loan details, try the loan EMI calculator or the auto loan calculator. To see how long a purchase takes to pay for itself, use the break-even calculator.
Equipment lease vs buy calculator FAQ
Is it cheaper to lease or buy equipment?
It depends on the terms and how much the equipment is worth at the end. Buying often costs less if the equipment holds its value. Leasing can cost less when it loses value fast or you need it for a short time.
Why does resale value matter so much?
When you buy, you own the equipment at the end, so what it is worth reduces your net cost. A higher value favors buying and a lower value favors leasing.
What if I plan to keep the equipment after the lease?
Enter the buyout price. The calculator then also subtracts the value of the equipment from the lease cost, since you would own it.
Does the calculator include taxes?
No. Depreciation, interest deductions and lease expensing can change which option is better. Ask your accountant.
What if my loan is shorter than the lease?
The loan balance is zero once it is paid off, and no loan payments are counted after that. The calculator handles both shorter and longer loans.
Should I choose by monthly payment?
No. A lower monthly payment can hide a higher total cost. Compare the net cost over the same period.