Why does salvage value matter for the buy scenario?

If you buy the equipment, you still own something at the end of the loan term — its resale or continued-use value offsets the cash you spent. Leaving it out would overstate the true cost of buying compared to leasing, where you typically own nothing unless you pay the buyout.

What if I plan to keep using the equipment well past the loan term?

This tool compares costs only through the end of the loan/lease term you enter. If you’ll keep owned equipment running for years after the loan is paid off, buying’s advantage grows since there are no more payments — a comparison limited to the financing term understates that long-run benefit.

Business & Enterprise

Equipment Lease vs Buy Calculator

Compare the total cash cost of leasing equipment against financing a purchase, salvage value included.

Formula reviewed against standard lease-vs-buy total cost of ownership comparison · Last checked Aug 2026 · methodology

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Formula

Two total-cost calculations

Buy cost = Down + Loan payments − Salvage | Lease cost = Payments + Buyout

Buy total costDown payment plus every loan payment, minus what the equipment is worth to you afterward

Lease total costEvery monthly lease payment, plus any end-of-term buyout if you keep the equipment

FAQ

Common questions

No — this compares raw cash outlay only. Lease payments are often fully deductible as an operating expense, while a purchased asset is depreciated over time (potentially accelerated via Section 179 or bonus depreciation). Those tax effects can meaningfully change the real after-tax comparison, so run the after-tax numbers past your accountant before deciding.

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