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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 June 2026 · Editorial standards

Equipment Details

$
$
mo
%
mo
$
Total Lease Cost
$43,200
Total Buy Cost (net)
$47,998
Monthly Loan Payment
$967
Savings (Buy vs Lease)
$4,798 (Leasing cheaper)

Total lease cost: $43,200 over 36 months. Total buy cost (after $10,000 salvage): $47,998. Leasing saves $4,798.Buying builds equity and may be cheaper long-term, but ties up capital. Leasing preserves cash flow and may offer tax deductions on payments. Consider technology obsolescence — leasing is often better for fast-depreciating equipment.

By the KalkWise Editorial Team Reviewed for accuracy Updated June 2026

What is the lease vs buy equipment calculator?

In short

Leasing typically costs more long-term but preserves cash flow and allows easy equipment upgrades. Buying costs less over the full lifecycle and builds equity. The break-even depends on equipment lifespan, salvage value, and financing rates.

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 (e.g., computers, phones), when cash preservation matters, or when lease payments are fully tax-deductible in your jurisdiction. Buying is better for long-lived, stable equipment.

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.