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Asset Financing

Lease vs. Buy Equipment Analyzer

Compare the true net present value cost of leasing versus buying, tax shields, resale value and the time value of money included.

Reading This Tool

How To Use This Calculator

Enter the purchase price and the lease terms you've actually been quoted, then set your tax rate and cost of capital.

The chart tracks the cumulative net present value cost of each path across the full term, whichever line ends lower is the cheaper option in today's dollars, not just on the invoice. Pick the CCA class that actually matches the asset, since it drives how quickly the tax shield from buying shows up.

Your Inputs

CCA is modeled using the standard half-year rule on a declining balance. Resale value is treated as a simple taxable-neutral cash inflow, real transactions may trigger recapture or a terminal loss depending on the remaining UCC pool.

Recommendation

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NPV Cost, Buy

$0

NPV Cost, Lease

$0

NPV Savings, Cheaper Option

$0

Cumulative NPV Cost Over The Term

Buy Lease

The Structural Trade-Off

Buying captures the CCA tax shield and any resale value, but ties up capital upfront. Leasing preserves cash and is often fully deductible, but you own nothing at the end. The right call usually comes down to your cost of capital and how fast the asset depreciates in practice.

This model assumes lease payments are fully tax-deductible (typical of an operating lease) and ignores financing interest if the purchase is debt-funded. If you're financing the purchase with a loan, run the interest cost through separately, this tool isolates the lease-vs-own decision, not the financing structure.

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