Buy vs lease calculator
Buying costs depreciation; leasing costs payments.
Need a laptop, camera, or van for the business? Buy it and eat depreciation, or lease it and pay monthly.
Enter the price, how long you need it, the lease payment, and what your cash could earn elsewhere. The calculator shows the true cheaper option.
The question behind the question
"Should I buy or lease this laptop, camera, or van?" is really two questions: how long do you need it, and what is your cash worth while it is tied up? Buying eats depreciation; leasing eats monthly payments. The calculator puts both on the same timeline and then adjusts for the return your cash could earn if you had not spent it.
Buying costs depreciation, not the sticker
The true cost of buying is what the asset loses in value over the time you use it — the price minus what you sell it for. A $2,000 laptop you sell for $800 in three years cost you $1,200, not $2,000. That is the number to compare against leasing. Freelancers often overstate the cost of buying because they stare at the sticker and forget the resale.
Leasing costs payments — and maybe a buyout
A lease is a stream of monthly payments, and if it includes a purchase option at the end, that residual is part of the total too. With no buyout, you rent and walk away owning nothing — which is the right call if you only need the gear for a short, one-off project. The calculator adds the residual when you enter one, so a lease-to-own plan is compared honestly against an outright buy.
The cost of capital you forget
If you lease, the cash you would have spent stays in your pocket — invested, earning your return rate. If you buy, that same cash is locked in equipment and earns nothing. For a freelancer who could deploy that money in the business or a high-yield account, that foregone return is a real cost of buying. The calculator’s opportunity-adjusted comparison makes the trade-off explicit instead of intuitive.
When buying wins
Buy when you will use the asset for most of its life, when it holds value well, and when your cash is not earning more elsewhere. Ownership also means no end-of-lease surprises, no mileage or wear penalties, and the freedom to sell whenever you like. For core gear you depend on daily, buying is usually cheaper in the long run despite the scary upfront number.
When leasing wins
Lease when the need is short, the equipment depreciates fast, or your cash is better used elsewhere (landing the next client, a buffer, paying down high-rate debt). It also preserves liquidity during the irregular-income months freelancers live through, and shifts maintenance and obsolescence risk to the lessor. The calculator shows whether those benefits actually beat buying once the capital cost is counted.
Estimates only. The calculator compares depreciation (price minus resale) against lease payments plus any buyout, over the horizon you enter. The opportunity adjustment assumes your cash earns a flat annual return and that buying ties up the full price for the whole period. It ignores tax treatment (lease payments are often deductible, loan interest sometimes is), maintenance, insurance, end-of-lease penalties, and the risk that resale estimates are wrong. Use it to frame the decision, then confirm the real numbers with your accountant.
Frequently asked questions
Why is buying not as expensive as the sticker price?
Because the real cost is depreciation — price minus what you resell it for. A $2,000 laptop sold for $800 in three years cost $1,200, not $2,000. The calculator uses that resale figure, not the sticker.
When does leasing make more sense than buying?
When you need the gear briefly, when it loses value fast, or when your cash earns more deployed elsewhere (a client, a buffer, high-rate debt). Leasing also preserves liquidity through irregular-income months.
What does the "cost of capital" adjustment do?
It counts the return your cash would earn if you had not spent it. Leasing leaves that cash invested (lowering effective lease cost); buying ties it up (raising effective buy cost). The adjustment reveals which is truly cheaper for you.
Should I include the lease buyout?
Yes, if you intend to own the asset at the end — enter it as the residual and the calculator adds it to lease total. If you will walk away owning nothing, leave it at zero; that is the pure-rental case.
Does this account for tax deductions?
No. Lease payments are often fully deductible and loan interest sometimes is, which can tilt the real-world answer. The calculator is pre-tax; confirm the after-tax effect with your accountant.
What about maintenance and obsolescence?
Leasing often shifts those risks to the lessor and lets you upgrade constantly; buying leaves them with you. The calculator does not price that risk — weigh it qualitatively on top of the dollar comparison.