Buy vs. Lease Equipment Calculator

Compare upfront cash, the payment schedule, ownership and resale value, maintenance, and how long you need the equipment. A lease may require deposits or advance payments, and tax treatment depends on the agreement and eligibility. This calculator compares simplified five-year costs; check its assumptions before applying the result to your financing decision.

There is no universal tax winner. Rent under a qualifying business lease may be deductible, while a purchase may qualify for tax depreciation, Section 179, or bonus depreciation. For tax years beginning in 2026, Section 179 has a $2,560,000 maximum, with phaseout starting above $4,090,000 and a business-income limit. Bonus depreciation depends on qualifying property and relevant dates. This tool applies simplified deduction assumptions; it does not model those tax provisions or determine whether a lease is treated as a purchase.

The break-even point is how long you need to own the equipment before buying becomes cheaper than leasing. This calculator shows the net 5-year cost of each option — if you plan to use the equipment longer than the break-even point, buying is usually better. Shorter-term needs or rapidly obsoleting equipment (computers, medical devices) tend to favor leasing.

Lease when: technology changes quickly (computers, copiers, medical devices), you need flexibility to upgrade every 2–3 years, or cash is tight. Buy when: equipment has a long useful life (heavy machinery, vehicles, HVAC), you qualify for Section 179 full expensing, or the 5-year lease cost clearly exceeds the purchase cost.

Section 179 allows an election to expense qualifying property, subject to limits. The maximum is $2,560,000 for tax years beginning in 2026, reduced above $4,090,000 of qualifying property and limited by business income. This calculator uses a simplified five-year straight-line deduction and does not apply Section 179, bonus depreciation, or MACRS. Those provisions may change the timing of deductions, but savings depend on eligibility and your tax position. See IRS Publication 946.

No. Maintenance is not included because costs vary widely and some leases include full maintenance (full-service lease). If your lease includes maintenance, the lease is even more attractive relative to buying. Add your expected annual maintenance costs to the buy-side cost for a complete comparison.