Fill in the purchase price, loan terms, and lease payment to compare the true net present cost of buying vs leasing this equipment.
Beyond the numbers — qualitative factors
Consider buying when:
✓ You will use it for its full useful life
✓ Equipment appreciates or holds value
✓ You want to build equity / balance sheet asset
✓ Section 179 / bonus depreciation provides large first-year deduction
✓ Cash flow supports down payment and payments
✓ You need to customize or modify the equipment
✓ Technology does not change rapidly in this category
Consider leasing when:
✓ You need the latest technology / upgrade regularly
✓ Cash preservation is a priority (lower monthly)
✓ Equipment has high obsolescence risk
✓ Off-balance-sheet financing desired
✓ 100% payment deductibility helps your tax position
✓ Maintenance is included in lease
✓ Shorter commitment matches uncertain business outlook
Estimate only. NPV calculations use the discount rate to express future costs in today's dollars. Tax shields depend on actual taxable income and applicable depreciation schedules (MACRS). Section 179 and bonus depreciation limits change annually. Lease deductibility depends on lease classification (operating vs finance). Always consult a CPA and tax advisor before making major equipment acquisition decisions.