Buying vs. Leasing - Equipment

You can use this calculator to compare the cost of buying or leasing equipment.

To open this calculator, click Calculators in the toolbar, and then click Business > Buying vs. Leasing - Equipment in the left panel.

You can export the data as a PDF file or clear all data that you entered. For more information, see Financial calculators.


  • Since the option to buy provides equity in the equipment, the calculator subtracts this amount from total costs to arrive at the amounts in the Net Cost section.
  • The calculator determines the ending market value by multiplying the amount in the Residual Percentage field by the amount in the Purchase Price field.
  • The Lost Interest on Payments section displays the interest you could have earned if you had invested the money spent on the equipment.


Field Input
Purchase price $20,000
Sales tax rate 7%
Residual percentage 60%
Buying Leasing
Down payment $1,000 $1,000
Term of loan or lease in months 60 24
Annual interest rate 8%
Monthly payment $424.35
Annual rate of return 8% 8%

In this comparison, leasing costs less than buying over a 24 month period. The difference between the two options is $922.18.


  • The annual interest rate is the interest rate on the loan used to purchase the equipment.
  • The annual rate of return is the rate of return expected on invested funds.
  • The residual percentage equals the value of the equipment at the end of the lease period.

Internal notes


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