Lease Calculator
Compare leasing vs buying options for vehicles, equipment, or property. Calculate monthly payments, total costs, and determine which option saves you money.
Vehicle Lease: Cars, trucks, motorcycles
Equipment Lease: Business equipment, machinery
Property Lease: Real estate, commercial property
Compare with Purchase Option
Lease Summary
Monthly Payment:
$0.00
Total Lease Payments:
$0.00
Total Interest/Finance Charge:
$0.00
Lease End Value:
$0.00
Purchase Summary
Monthly Payment:
$0.00
Total Loan Payments:
$0.00
Total Interest:
$0.00
Asset Ownership Value:
$0.00
Lease vs Buy Comparison
Total Cost Difference:
$0.00
Monthly Savings:
$0.00
Recommended Option:
N/A
Understanding Leasing vs Buying
Leasing and buying are two different approaches to acquiring assets. Leasing provides flexibility and lower monthly payments, while buying offers ownership and potential long-term savings. Understanding the differences helps you make the right financial decision.
Types of Leases
Operating Lease
- Short-term lease agreements
- Lower monthly payments
- Lease term less than asset life
- Off-balance sheet financing
Capital Lease (Finance Lease)
- Long-term lease agreements
- Higher monthly payments
- Lease term equals asset life
- On-balance sheet financing
Sale-Leaseback
- Sell asset then lease it back
- Immediate cash infusion
- Continue using the asset
- Tax advantages
Leveraged Lease
- Third-party financing
- Tax benefits for all parties
- Complex structure
- Large asset purchases
Lease vs Buy Decision Factors
| Factor | Leasing | Buying |
|---|---|---|
| Monthly Payment | Lower | Higher |
| Ownership | No ownership | Full ownership |
| Flexibility | High (upgrade often) | Low (long-term commitment) |
| Tax Benefits | Deductible payments | Depreciation, interest |
| Total Cost | Often higher long-term | Often lower long-term |
Lease Terms and Calculations
Key Lease Components
Capitalized Cost
- Negotiated price of the asset
- Includes fees and add-ons
- Reduced by down payment
- Plus residual value
Residual Value
- Estimated value at lease end
- Percentage of original cost
- Higher residual = lower payments
- Based on depreciation
Money Factor
- Interest rate equivalent
- Money factor = interest rate ÷ 24
- Lower money factor = lower cost
- Negotiable in some leases
Depreciation
- Monthly depreciation amount
- (Capitalized cost - residual) ÷ term
- Plus finance charge
- Equals monthly payment
When to Lease vs Buy
Consider Leasing When:
- You want lower monthly payments
- You plan to upgrade frequently
- You need tax advantages
- You want to preserve cash flow
- The asset depreciates quickly
- You have limited capital
Consider Buying When:
- You want to build equity
- You plan to keep the asset long-term
- You can get better financing rates
- You want customization options
- You have sufficient down payment
- You want to avoid mileage restrictions
Key Takeaways for Leasing Decisions
- Calculate total cost of ownership for both options
- Consider your usage patterns and needs
- Factor in tax implications for business leases
- Negotiate residual values and money factors
- Understand all fees and restrictions
- Compare multiple lease offers
- Consider early termination costs
- Think about your long-term financial goals