Financing & equipment
Buy or lease the equipment? Compare the cash cost
An equipment buy vs. lease calculator: owners enter price, loan rate and term, resale value, lease payment and lease term to see net cost to buy, total lease cost and the cheaper option.
Included on every plan, even the free Practitioner plan. No card needed.
Is it cheaper to buy or lease equipment?
Compare the net cost of buying, total loan payments minus resale value at the end, with total lease payments over the same term. Whichever is lower costs less cash. Tax treatment, such as depreciation versus deductible lease payments, maintenance and upgrade needs can change the answer.
Before year-end equipment purchases
Year-end brings equipment decisions, often driven by tax deductions. Dealers present lease and finance options, and owners want to compare them simply.
What the client types into a search box
“should I lease or buy equipment for my business”
How a client works through it
Enter price and loan terms
Equipment price, loan rate and term in months.
Enter resale value
Expected value at the end.
Enter lease terms
Monthly lease payment and term.
Compare
Net cost to buy, lease cost and the cheaper option.
What lands in your inbox
When a client asks your firm to review the result, the request arrives as a contact record with their inputs and results attached, by email and, on paid plans, by webhook to your CRM.
Received
Price, terms, resale and lease payment show the size and the owner's options. Large purchases late in the year suggest tax-motivated timing that needs checking.
Cash cost comparison
Net Cost to Buy is total loan payments minus resale value. Total Lease Cost is lease payments over the term. Cheaper Option and Difference show the result; Monthly Loan Payment shows cash flow if buying.
The comparison is in undiscounted cash; use the same term for both for fairness.
Results shown: Net Cost to Buy · Total Lease Cost · Cheaper Option · Monthly Loan Payment · Difference.
Why buy-vs-lease is a classic CPA question
The decision depends on taxes: Section 179, bonus depreciation and lease deductions. CPA firms are uniquely placed to answer it, and year-end timing makes requests urgent.
Fractional CFOs evaluate it against cash flow and capital plans.
Follow-ups this request opens
- Model tax deductions under each option
- Check year-end placed-in-service timing
- Review lease terms and end-of-lease options
- Fit the purchase into the capital budget
What this calculator leaves out
- Not discounted for time value of money.
- Tax treatment not included.
- Maintenance and insurance excluded.
- End-of-lease options not modeled.
Platform disclaimer shown under the calculator: Estimates only. Compares total cash paid (not discounted for the time value of money); for a fair comparison use the same loan and lease term. Tax treatment (e.g. Section 179 or depreciation vs. deductible lease payments), maintenance and end-of-lease terms affect the real comparison. Consult your accountant.
Compliance note for firms
Recommending a purchase for tax reasons is written tax advice under Circular 230 §10.37; consider Section 179 limits, income and state conformity. Present the calculator's comparison as pre-tax.
Not legal advice. See our disclaimer and the guide to compliance for client calculators.
Terms your client sees in the calculator
These definitions appear in the calculator's collapsible Definitions block, so clients don't have to call to ask what a label means.
- Equipment financing
- A loan used to buy business equipment, usually repaid in fixed monthly installments with the equipment as collateral. You own the asset, pay for its upkeep and keep its resale value. This calculator figures the loan payment from the price, rate and term, then subtracts resale value to get the net cost to buy.
- Equipment lease
- An agreement to use equipment for a set period in exchange for monthly payments, without owning it. At the end you typically return it, renew, or buy it on the terms in the contract. The calculator multiplies the monthly lease payment by the lease term to get the total lease cost.
- Net cost to buy
- Total loan payments over the term minus the equipment’s resale value at the end. It represents the cash paid out to own the equipment and then sell it. It is compared directly with the total lease cost, and the smaller of the two is shown as the cheaper option.
- Total lease cost
- The monthly lease payment multiplied by the number of months in the lease. It leaves out any purchase option, end-of-lease fees or charges for excess wear, which vary by contract. For a fair comparison with buying, the lease term should match the loan term.
- Resale value
- What the equipment could be sold for at the end of the comparison period. When you buy, you recover this amount, so it is subtracted from total loan payments. A higher resale value favors buying; equipment that loses value quickly or becomes obsolete tilts the comparison toward leasing.
- Interest rate
- The annual percentage the lender charges on the unpaid balance of the equipment loan. This calculator divides it by 12 to get a monthly rate and uses it, with the price and term, to find the monthly loan payment. A higher rate raises total loan payments and the net cost to buy.
In our glossary: Present value
Equipment Buy vs. Lease calculator: questions from firms and clients
Does it include tax deductions?
No. Depreciation and lease deductions can change the answer.
Should terms be equal?
Yes, for a fair comparison.
What about maintenance?
Not included; some leases include it.
Is the time value of money considered?
No, it compares total cash.
When is leasing better?
For fast-obsoleting equipment or when cash is tight.
When is buying better?
For long-lived equipment with good resale value.
Does year-end timing matter?
For tax deductions, yes; ask the firm.
Which plan includes it?
Every plan, including the free Practitioner plan, which runs up to 5 calculators at once alongside the other business tools. Firm (up to 50) and Network (no cap) add webhooks and white-label. See pricing.
No question matches that filter. Clear it to see them all, search the whole site, or ask us directly; we reply within one business day.
Clients who ask this usually ask next
Business Loan
how much will my business loan payment be
Business ROI
is this investment worth it for my business
Internal Rate of Return (IRR)
what is the return on this investment with cash flow and sale
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