Lease vs Buy Calculator

This calculator compares the total cost of ownership between leasing and buying an asset over a specific period. For the buy option, it calculates the purchase price plus maintenance costs, minus the asset's residual value at the end of the term. For the lease option, it totals all lease payments, down payment, and maintenance costs. The option with the lower net cost is typically more financially advantageous, though other factors like flexibility, tax benefits, and cash flow should also be considered.

1. 1

   Step 1

   Enter the full purchase price of the asset

2. 2

   Step 2

   Input monthly lease payment and any down payment required

3. 3

   Step 3

   Specify the comparison term in months (typically 24-60 months)

4. 4

   Step 4

   Estimate the asset's value at the end of the term if purchased

5. 5

   Step 5

   Include monthly maintenance costs for both scenarios

6. 6

   Step 6

   Calculator compares total net costs and shows potential savings

7. 7

   Step 7

   Review recommendation while considering non-financial factors

• 1

  Buying typically makes sense if you plan to keep the asset beyond the lease term

• 2

  Leasing offers lower upfront costs and predictable monthly expenses

• 3

  Consider tax implications: businesses may deduct lease payments as operating expenses

• 4

  Factor in opportunity cost: money used to purchase could be invested elsewhere

• 5

  Maintenance costs often favor leasing for high-maintenance assets under warranty

• Ignoring Opportunity Cost

• Not Factoring Tax Benefits

• Overlooking Flexibility Needs

• Misjudging Residual Value