Cheaper way to acquire equipment. The Lease vs Buy Equipment Calculator takes purchase price, monthly lease payment, term, resale value at the end if bought (share of price), loan rate if buying on finance, extra costs of leasing per month (maintenance included? enter 0) and returns cost of leasing minus cost of buying plus cheaper option, net cost of buying (finance payments − resale), total lease cost, monthly loan payment if buying. Results update as you type, and the formula is shown under the result so you can repeat it in your own spreadsheet.
Property returns depend on assumptions about rent, occupancy, costs and appreciation that are easy to make optimistic. Enter conservative figures and remember that transaction costs, taxes and vacancy periods are real. Use the worked example below to check the maths against your own figures.
How the Lease vs Buy Equipment Calculator works
Buying wins when the equipment holds its value and you keep it; leasing wins for fast-depreciating technology, uncertain needs and when the lease includes maintenance. Tax treatment differs too.
Worked example
With the example values (purchase price of $100,000, monthly lease payment of $2,200, term of 48 months, resale value at the end if bought (share of price) of 30%, loan rate if buying on finance of 9%, extra costs of leasing per month (maintenance included? enter 0) of $0), the cost of leasing minus cost of buying is $16,151.80; cheaper option Buying costs less over the term, net cost of buying (finance payments − resale) $89,448.20, total lease cost $105,600.00, monthly loan payment if buying $2,488.50. Change any figure above and the result updates immediately; use Copy results to paste the summary into a note or email.
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Frequently Asked Questions
How is cost of leasing minus cost of buying calculated?
buy cost = loan payments − resale value; lease cost = lease payment × months.
Which figures do I need?
Purchase price, monthly lease payment, term, resale value at the end if bought (share of price), loan rate if buying on finance, extra costs of leasing per month (maintenance included? enter 0). Take them from the same period and the same set of accounts or reports so the ratio is consistent, and check the example values as a guide to the units expected.
Which costs are easy to forget?
Vacancy periods, maintenance, property tax, insurance, brokerage on purchase and sale, and stamp duty. Include them for a realistic return.
