Equipment Lease vs. Loan Calculator
Compare the total cost of financing equipment with a loan against leasing it, including the residual value you'd own at the end of a loan and estimated tax savings either way. Every calculation runs locally in your browser.
The equipment
Rates
Tax treatment
Estimated cost, side by side
Loan (own it)
Lease
How this is calculated
Loan net cost = total payments over the term, minus the residual value you still own at the end (since a loan means you keep the equipment), minus estimated tax savings from depreciating the equipment and deducting the interest paid. The depreciation deduction is based on cost minus that same residual value -- you can't deduct value the equipment still has when the term ends -- so a high residual estimate lowers the tax benefit shown here, not just the net cost.
Lease net cost = total lease payments over the term (using the standard lease-payment formula: depreciation portion plus a finance-charge portion on the average balance, based on a money factor), minus estimated tax savings from deducting the lease payment as an operating expense. No residual credit, since a standard lease assumes you return the equipment rather than keep it.
On the loan side, electing Section 179 accelerates the depreciation deduction into year one instead of spreading it out; this calculator shows the same total tax benefit either way and doesn't model the cash-flow-timing advantage of accelerating it, to avoid implying more precision than a self-serve estimate can offer.
Equipment with a long useful life you intend to run until it's fully depreciated usually favors a loan, since you build ownership value the lease's net cost doesn't credit you for. Equipment that gets replaced every few years, or situations where preserving cash matters more than long-term ownership cost, usually favor a lease. See our full lease vs. loan guide for the qualitative tradeoffs behind these numbers.
The calculation itself runs entirely in your browser -- the specific figures you enter are never transmitted or stored, except that the "Get your full pre-qualification estimate" button below carries the amount you entered into the application form's URL so you don't have to type it twice. Separately, we log anonymous usage analytics (that this page was viewed, or that a button was clicked) to see which calculators are useful -- never the numbers you type.
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