Equipment Lease Vs. Buy Calculator
Compare the after-tax present cost of leasing equipment with financing a purchase, including residual value and opportunity cost.
Financial Decision Lab
Lease Vs. Buy
Equipment NPV Analysis
Lease Vs. Buy Workbench
Inputs Recalculate Instantly
Ownership Cash Flows
Purchase Case
Contract Cash Flows
Lease Case And Model
Present-Value Cost
Decision Readout
Lower-Cost Base Case
Buy By $11,440
Measured over 5.0 years in today's dollars.
Buy NPV Cost
$76,456
Lease NPV Cost
$87,896
Loan Payment
$1,394
Monthly
Resale Value PV
$17,695
Loan Payoff PV
$0
If Debt Remains At Horizon
Cost Of Capital
Discount-Rate Sensitivity
Lower Discount Rate
6.0%
Buy $13,414
Base Discount Rate
8.0%
Buy $11,440
Higher Discount Rate
10.0%
Buy $9,666
Calculation Trace Show
Amortized Principal And Interest$1,394Down + PV(Payments + Maintenance + Loan Payoff) - PV(Resale)$76,456Upfront + PV(Lease Payments + Maintenance)$87,896DISCLAIMER: This tool provides educational planning estimates, not financial, investment, tax, legal, accounting, lending, or appraisal advice. Results depend on the assumptions you enter and may differ materially from actual outcomes. Rates, taxes, fees, market returns, benefits, and regulations can change. Consult qualified professionals before making consequential financial decisions.
What Is the Equipment Lease Vs. Buy Calculator?
The Equipment Lease Vs. Buy Calculator compares two complete cash-flow paths rather than just a lease payment with a loan payment. The lease side includes up-front fees, periodic payments and tax deductibility. The purchase side includes down payment, financed payments, maintenance, depreciation-related tax assumptions and the equipment's after-tax residual value. Both paths are discounted to present value so costs at different dates are comparable.
How It Works
Enter the lease term, payments and fees, then describe the purchase price, financing terms, maintenance and expected resale value. Set the business tax rate and discount rate explicitly. The workspace reports present cost for each path, the difference, equivalent monthly cost and a calculation trace; change the residual value or discount rate to test the assumptions most likely to reverse the decision.
When to Use It
Use it when comparing a vendor lease with a bank or manufacturer-financed purchase, planning a fleet or equipment refresh, or documenting the economic assumptions behind a capital-spending decision.
Frequently Asked Questions
- Why use present value?
- A dollar paid today costs more economically than a dollar paid years from now. Discounting puts every payment and resale receipt on the same date for a fair comparison.
- Is the cheaper option always better?
- No. Flexibility, upgrade cycles, maintenance responsibility, borrowing capacity, obsolescence and contract restrictions may matter more than a small modeled cost difference.
- Are tax deductions guaranteed?
- No. Eligibility and timing depend on jurisdiction, entity, asset and current tax rules. Treat the tax inputs as scenarios and confirm material deductions with a qualified tax professional.
Last reviewed: 2026-06-27