Lease vs Buy Calculator
Totals lie about equipment decisions, because they treat money paid in five years as if it were money paid today. This calculator lays the three options out year by year over a single horizon and discounts them at the return your own business earns.
The arithmetic is deliberately plain. Buying with cash puts the whole price at year zero and hands back the resale value at the end. Financing swaps most of that for a down payment and a level instalment. Leasing spreads it across the term and leaves you with nothing at the end — which is why the resale line matters and why the lease term has to cover the same horizon, otherwise you are comparing six years of use with five.
In the sample data the totals and the present values disagree, and that disagreement is the point. Cash costs the least in total at 40,000 net of resale, but 47,555 in today's money. The loan costs more in total at 55,388 and less in present value at 41,597. Leasing is the most expensive both ways here, at 82,800 and 48,267. Rank by total and you pick one option; rank by present value and you pick another.
The second sheet shows where the answer flips. At a cost of capital of 8% buying with cash wins, between 12% and 20% the loan wins, and from 24% upwards leasing does. Nothing about the asset changed — only the return your own money earns elsewhere. A business that can put capital to work at 25% should be reluctant to tie 52,000 of it up in a machine.
Two honest caveats are printed on the sheet. Maintenance, insurance and downtime are assumed equal across the options, so if the lease includes servicing you must add that difference before comparing; and tax treatment differs by country and is left out entirely. Finmap shows what your capital is actually returning, which is the one input this calculation is most sensitive to.
