Lease vs. buy calculator
Run an Equipment Finance Agreement and a lease side by side on the same equipment, with a simplified Section 179 tax comparison, to see which fits your numbers better.
Equipment Finance Agreement (own it)
Lease (purchase-option / FMV)
This tool gives an estimate for planning purposes only — it is not a loan offer, a lease quote, or a guarantee of terms. Your actual rate, payment, and approval depend on your credit, time in business, and the specific equipment. Tax figures are simplified and not tax advice; talk to your accountant about Section 179 and your actual tax situation. Contact us for real numbers on your deal.
Want numbers specific to your deal?
Submit an inquiry and Darlene will find the financing program best suited to your equipment purchase.
How this is calculated
The EFA side is a standard amortizing loan — the amount financed is paid off in equal monthly installments by the end of the term. The lease side uses the industry-standard money-factor method: a depreciation fee based on the value used, plus a finance fee based on your rate. Both are then compared after a simplified Section 179 tax adjustment, if you turn it on.
Full background on EFAs, leases, and what to watch for in the contract (including the FMV and evergreen clauses) is on the ABC's of Financing page.
Frequently asked
What's the real difference between leasing and an Equipment Finance Agreement?
With an EFA, you're financing toward ownership — the loan is paid off in full and the equipment is yours. With a lease, you're only financing the portion of the equipment's value you use during the term (cost minus residual value), which usually means a lower monthly payment, but you either return the equipment, or pay the residual/buyout to keep it.
How is the lease payment calculated?
This tool uses the standard equipment-leasing convention: a depreciation fee (equipment cost minus down payment minus residual value, divided by the term) plus a finance fee (based on a money factor derived from the rate you enter). That's the same method used across auto and equipment leasing.
What is Section 179, and why does it matter here?
Section 179 lets qualifying businesses deduct the full purchase price of financed equipment in the year it's placed in service, instead of depreciating it over several years. Toggling it on in this calculator models that upfront deduction for the buy scenario. This is a simplified model for comparison purposes, not tax advice — confirm your actual eligibility and numbers with your accountant.
Which one is cheaper, leasing or buying?
It depends entirely on your rate, residual value, tax situation, and how long you plan to keep the equipment. Past 5 years of expected use, an EFA usually pencils out better since you're building toward ownership. If you like refreshing equipment regularly, a lease's lower payment and flexibility may win. Run your own numbers above — that's what this tool is for.