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Lease vs. Buy Equipment Calculator

Enter equipment cost, lease terms, and loan terms to see whether leasing or buying saves more money over the equipment's life.

Updated July 2026 · Editorial standards

Buying is cheaper over 5 years — you save
$4,770
Buy net cost (5 yr)
$27,325
Lease total cost (5 yr)
$32,095
Buy monthly payment$587Car value at end$14,907Buy down-payment opportunity cost$2,013

Based on your assumptions above — residual value, investment return, and the years you analyze swing this verdict more than any other inputs. The horizon ends mid-lease: the model charges the full drive-off amount for the final lease but assumes you exit at the horizon with no early-termination fee.

Vehicle & Loan

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$
%
$
yrs

Over 5 years: buying's all-in cost is $27,325 (after $14,907 resale value, including the invested-down-payment opportunity cost); leasing totals $32,095 with a new down payment each lease term. Buying saves $4,770.Buying builds equity and is usually cheaper long-term. Leasing offers lower monthly payments and the latest model every few years. Both sides count the opportunity cost of money paid up front. Factor in mileage limits and wear-and-tear fees when leasing.

Buying saves
$4,770
By KalkWiseVerified against official sources Updated July 2026

What is the lease vs buy equipment calculator?

In short

Leasing preserves cash flow and eases upgrades; buying usually costs less over the equipment's life and builds equity. Example: $50,000 equipment leased at $1,200/month for 36 months totals $43,200, versus a 6% loan over 60 months netting $37,800 after a $10,000 salvage value — buying saves $5,400 in this case.

Compares total lease cost vs. total loan cost (net of salvage value) and calculates monthly loan payment to determine which option saves more money.

How to use this calculator

  1. 1Enter equipment cost.
  2. 2Enter monthly lease payment and lease term.
  3. 3Enter loan interest rate and loan term.
  4. 4Enter estimated salvage value at end of the loan term (resale value or scrap).

The formula

total lease=monthly payment×months
total buy=PMT×n−salvage
Total Lease = L × n_L; Total Buy = PMT × n_loan − S; PMT = Cost × r / (1 − (1+r)^−n)
L
— Monthly lease payment
n_L
— Lease term (months)
PMT
— Monthly loan payment
S
— Salvage value

Worked example

The scenario

$50K equipment, $1,200/mo lease for 36 months, vs 6% loan for 60 months, $10K salvage.

gives

The result

Total lease cost = $43,200. Net buy cost = $47,800 − $10,000 = $37,800. Buying saves $5,400.

Common use cases

  • Evaluate capital equipment purchases for businesses.
  • Compare options for medical, restaurant, or manufacturing equipment.
  • Build a business case for the CFO.
  • Understand true cost of equipment over the holding period.

Limitations & assumptions

  • Does not include maintenance, insurance, or tax implications.
  • Tax treatment of lease vs. buy differs significantly — consult a CPA.
  • Technology obsolescence risk favors leasing for fast-depreciating equipment.
  • Lease terms may include buyout options not reflected here.

Frequently asked questions

Leasing is better when you need to upgrade equipment frequently — every 2–3 years for computers and phones — when cash preservation matters, or when lease payments are fully tax-deductible in your jurisdiction. Buying is better for long-lived, stable equipment you'll use for 5+ years.

Disclaimer: KalkWise calculators are provided for general informational and educational purposes only and do not constitute financial, investment, tax, or legal advice. Results are estimates based on the figures you enter and the assumptions described above. Actual outcomes will vary. Consult a qualified professional before making financial decisions.