Loan Vs. Lease NPV Crossover Visualizer

Leasing usually feels cheaper month to month. Whether it actually is, on a present-value basis including the asset's residual worth, depends entirely on where these two lines end up crossing.

Reading This Tool

How To Use This Visualizer

Enter the asset cost, loan terms, lease payment, and expected residual value.

Both cumulative present-value cost curves are plotted together. Where they cross, and which one ends up lower once the residual value is credited back to buying, is the actual decision.

Your Inputs

Asset Cost $50,000

Loan Interest Rate 6.0%

Term (Years) 5

Monthly Lease Payment $800

Expected Residual Value 35%

Discount Rate (Cost Of Capital) 8.0%

Residual value only benefits the buy option here, a lease typically returns the asset at term end with no residual credit to the lessee.

Which Option Wins

Buy: Net Present Value Cost

Lease: Present Value Cost

Present Value Advantage

Cumulative Present-Value Cost: Buy Vs. Lease

This model excludes tax treatment differences between leasing and buying, which can meaningfully affect the comparison. Lease payments are often fully deductible while ownership involves CCA deductions on a different schedule, factor this in before a final decision.

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