Buy vs Lease Equipment Calculator
Compare the total cost of financing and owning equipment against leasing it. See which option costs less over your chosen period and what each costs you every month.
Compare Your Equipment Costs
Enter the purchase and lease terms below. The calculator totals every cost over the comparison period, including loan interest, maintenance and resale value, to show whether buying or leasing is cheaper.
Buy vs Lease Estimator
See how financing a purchase compares to a lease for your equipment.
Understanding the Numbers
Key factors that decide buy vs lease
Total Cost of Buying
Deposit plus loan repayments made in the period, plus any loan balance still owed, plus maintenance, minus what you can sell the equipment for.
Total Cost of Leasing
Upfront fees plus every monthly lease payment, plus any maintenance the lease does not cover. You normally own nothing at the end.
Resale (Residual) Value
The biggest swing factor. A higher resale value favours buying, while fast-depreciating equipment often favours leasing.
Cash Flow
Leasing usually needs less cash upfront. Compare the monthly figures as well as the totals to see what suits your budget.
Buying vs Leasing Equipment
A general comparison to help you weigh up the differences beyond the headline cost.
| Feature | Buying (Loan) | Leasing |
|---|---|---|
| Ownership | You own the asset once the loan is repaid | Lessor owns it; you may return or buy out |
| Upfront Cash | Higher (deposit required) | Lower (first payment and fees) |
| Depreciation Risk | Carried by you | Carried by the lessor |
| Maintenance | Usually your responsibility | Sometimes included in the lease |
| Upgrades | Sell and replace yourself | Easy to upgrade at lease end |
| Tax Treatment | Capital allowances may apply | Payments may be deductible; rules vary |
Buy vs Lease Calculator FAQ
Answers to common questions about leasing or buying business equipment.
For buying, add the deposit, loan repayments made during the period, any remaining loan balance and maintenance, then subtract the resale value. For leasing, add upfront fees, all lease payments and any maintenance not covered. The lower total is the cheaper option.
Buying is usually cheaper over the long term if the equipment holds its value and you will use it for many years. Leasing is often cheaper for equipment that depreciates quickly or becomes obsolete, and it preserves cash flow.
Residual value is the estimated resale value of the equipment at the end of the comparison period. A higher residual value makes buying more attractive because you keep an asset worth money.
No. The calculator compares pre-tax cash costs. Capital allowances, VAT treatment and corporation tax relief differ between buying and leasing, so speak to an accountant to model the tax effect for your business.
Increase the comparison period and the resale value will usually fall, but you would also need to include extra lease payments or a new lease. The longer you keep equipment, the more buying tends to favour you.