Lease vs. Buy Calculator

How the Lease vs. Buy Calculator works

This Lease vs. Buy Calculator compares the two most common ways to acquire business equipment: leasing it or financing (buying) it with a loan. It calculates the monthly payment and the true total cost of each so you can see past the sticker payment to the real number.

Why the lowest monthly payment isn't always the cheapest

Leasing often shows a lower monthly payment than financing — which makes it look cheaper. But a lease is pure expense: at the end you own nothing. When you finance, you build equity and keep the equipment, which retains resale value. The calculator subtracts that resale value from your financing cost, which frequently flips the "cheaper" answer. The lowest monthly payment and the lowest total cost are often two different options.

When does leasing make more sense?

Leasing tends to win when equipment becomes obsolete quickly (like technology), when you want to preserve working capital, when you need to upgrade frequently, or when off-balance-sheet treatment matters. Lease payments are also typically fully deductible as an operating expense. See our leasing vs. financing tax implications guide for the full breakdown.

When does financing (buying) make more sense?

Financing tends to win when the equipment holds its value and has a long useful life (construction, heavy machinery, medical imaging), when you plan to keep it well beyond the loan term, or when you want to claim a Section 179 deduction on the full purchase price. When you finance, you can often deduct the entire cost in year one while still spreading payments out.

Does this account for taxes?

The calculator applies your estimated tax bracket to deductible costs for a simplified after-tax comparison. Real tax treatment depends on lease type (operating vs. capital lease), depreciation schedules, Section 179, and bonus depreciation — which can materially change the result. Always confirm with your CPA before deciding.