Lease vs. Buy Calculator

This calculator compares the total cash cost of leasing versus buying with financing over a defined period. It is intended for planning purposes and client discussions when evaluating equipment acquisition options.

What to Enter

• Client Name / Equipment ID / Acquisition Date – Optional identifiers for your working papers or client file.
• Lease Payment (per month) – The base monthly lease payment (before tax, unless quoted tax-in).
• Lease Term (months) – Number of months to compare (usually the lease term).
• Purchase Price – Cash price of the equipment.
• Down Payment – Cash paid up front if buying.
• Loan Interest Rate (% per year) – Annual financing rate.
• Loan Term (months) – Length of the loan.
• Estimated Residual Value – Expected resale or trade-in value at the end of the period.

How the Calculation Works

• Total Lease Cost = Monthly lease payment × Lease term
• Total Buy Net Cost = Down payment + Total loan payments − Residual value
• Loan payments are calculated using a standard amortization formula (or straight-line if the interest rate is 0%).

How to Read the Result

• If Total Lease Cost is lower → Leasing is cheaper over the period.
• If Total Buy Net Cost is lower → Buying is cheaper over the period.
• If they are equal → The two options cost the same over this time frame.

Important Notes

• This calculator compares cash costs only.
• It does not include:
  • Capital cost allowance (CCA)
  • Lease deductibility vs. depreciation timing
  • GST/HST ITCs
  • Maintenance, insurance, or operating costs
  • Opportunity cost of cash
• For a clean comparison, use the same time period for the lease term and loan term unless you intentionally want a different comparison window.
• Residual value has a major impact on the result — use a realistic estimate.

Tips

• Run the calculator with both conservative and optimistic residual values.
• Use Copy Results to paste directly into your client notes or email.
• Use Download PDF to save a copy to the client file.