Equipment Lease vs Buy Calculator
Deciding whether to finance and own equipment or lease it? Enter the numbers for each path and this calculator totals the true cost of both, recommends the cheaper option, and shows exactly how much you would save.
How the lease vs buy calculator works
Leasing and buying spread the cost of equipment very differently, so a fair comparison has to total every dollar you actually pay under each path. This calculator does exactly that, then recommends whichever option costs less over the term you enter.
Lease total = Monthly lease payment × lease term months
The financed monthly payment uses standard amortization on (price − down payment) at your APR over the loan term.
The buy side subtracts your expected resale or salvage value, because when you own the equipment you can sell it at the end — that recovered cash lowers the true cost of owning. The lease side has no resale value, since you hand the equipment back. That single difference is often what tips a close decision toward buying when you plan to keep the equipment for a long time.
A worked example
Say the equipment costs $60,000 with a $6,000 down payment, financed at 8% APR over 60 months. The loan amount is $54,000, giving a monthly payment of about $1,095 and roughly $65,700 in total payments. Add the $6,000 down and subtract a $10,000 expected resale value, and the total cost to buy is about $61,700. If a comparable lease runs $1,100 per month for 60 months, the lease totals $66,000. In this case buying wins by roughly $4,300 — largely thanks to the resale value you keep.
What to weigh besides the total
- Cash flow — leasing usually means lower upfront cash, which can matter more than the long-run total.
- Obsolescence — for fast-changing technology, leasing makes upgrading easier and avoids owning outdated gear.
- Maintenance — some leases bundle service; owned equipment is your responsibility to repair.
- Taxes — both routes can offer tax advantages depending on structure; ask your accountant.
- How long you will use it — the longer you keep equipment, the more buying tends to win.
Related decisions
- Model the loan side in detail with the business loan calculator.
- Compare the real cost of financing offers with the APR calculator.
- Check whether the payment fits your monthly cash flow before committing.
Frequently asked questions
Is it cheaper to lease or buy equipment?
It depends on the numbers. Buying with a loan usually costs less over the long run and leaves you with an asset you can resell, while leasing lowers upfront cash and monthly payments but has no residual value. This calculator totals both paths so you can compare the true cost side by side.
How is the total cost to buy calculated?
The total cost to buy is your down payment plus every financed monthly payment over the loan term, minus the resale or salvage value you expect to recover at the end. Subtracting resale value matters because when you own the equipment you can sell it later.
Does leasing include a resale value?
No. With a standard operating lease you return the equipment at the end, so there is no resale value to recover. The lease total is simply the monthly payment multiplied by the number of months, which is why buying can win over long horizons.
What besides cost should I consider?
Look beyond the total: leasing preserves cash and makes upgrading easier for fast-changing equipment, while buying builds equity and may offer tax advantages. Maintenance responsibility, obsolescence risk, and how long you will actually use the equipment all matter alongside the raw cost comparison.
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This calculator is for educational and informational purposes only and does not constitute financial, tax, or leasing advice. Estimates are based on the values you enter and standard amortization math. Confirm all terms and tax treatment with a qualified professional before deciding.