Free loans & equipment tool
Equipment Lease vs Buy Calculator
To compare leasing and buying equipment, add up the cash you pay under each option over the same period, then subtract what you keep: the resale value if you buy. For a $120,000 laser over 60 months, an 8% loan with $12,000 down nets to $123,391 after a $20,000 resale value, while a $2,400 lease costs $144,500. Buying is $21,109 cheaper in that case. Change the inputs to match your quotes.
Prepared by Prospyr · Reviewed October 3, 2026 · Free, no sign-up, runs in your browser
Lease vs buy calculator
Compare owning with a loan against a lease over the lease term. The defaults describe a $120,000 laser. Replace them with your quotes.
Buy with an equipment loan
Lease
Documentation fees, deposit you will not get back, advance payments beyond the monthly amount.
The purchase option price: a fixed amount, $1, or fair market value.
Value and taxes
Your estimate of resale value. Counted for the buyer, and for the lessee only if you buy it out. Aesthetic devices can lose value fast.
0 ignores taxes. Lease payments and loan interest are treated as deductible.
Buying costs less over 5 years
$21,109less
Buy: net cost
$123,391
$2,189.85/mo loan payment
Lease: net cost
$144,500
$2,400.00/mo
Buy: cash out
$143,391
down payment + payments
Lease: cash out
$144,500
The lease works out to an implied rate of about 10.3% a year. Compare that with the 8% loan rate.
A comparison in today's dollars, not tax or financial advice. It ignores the time value of money, sales tax, insurance, maintenance and upgrade options. A resale-value guess can swing the answer, so try a low one.
How the lease vs buy calculator works
Both options are measured over the lease term, so you are comparing the same stretch of time.
- Buy, net cost = down payment + loan payments in the window + loan balance still owed − resale value − tax savings.
- Lease, net cost = cash due at signing + monthly payments × months (+ buyout and − resale value if you keep the device) − tax savings.
Peer-reviewed work on medical equipment acquisition compares purchase, installment and rental strategies with the same family of measures: net cost, return on investment, payback and net present value. This tool uses net cost and the implied rate, which are enough to rank two quotes.
Worked example: a $120,000 laser over 60 months
| Buy with a loan | Lease | |
|---|---|---|
| Terms | $12,000 down, $108,000 at 8%, 60 months | $2,400 a month, 60 months, $500 due at signing |
| Monthly payment | $2,189.85 | $2,400.00 |
| Cash out | 12,000 + 131,391 = $143,391 | 500 + 144,000 = $144,500 |
| Resale value at month 60 | − $20,000 | Device returned |
| Net cost | $123,391 | $144,500 |
Buying is $21,109 cheaper. If you choose to buy the device out of the lease for $12,000, the lease net becomes 144,500 + 12,000 − 20,000 = $136,500, and buying is still $13,109 cheaper. The lease's implied rate is about 10.3%.
Drop the resale value to $0 and buying's net cost rises to $143,391, which is about the same as the lease's cash cost. The resale estimate is the number to stress-test.
Equipment loan, lease and financing terms to know
Equipment loan. You own the device and pay principal and interest. Lenders often want a down payment. Interest is tracked separately from principal on your books.
Equipment lease. You pay to use the device. At the end you return it, renew or buy it. The buyout can be a fixed price, $1 or fair market value, and the terms change the math, so enter the buyout from the contract.
Equipment financing. The umbrella term for both. The same device can be quoted as a loan, a lease or an SBA loan. For a government-backed option, try the SBA loan calculator. To see the full payment schedule of a loan, use the loan amortization calculator.
Section 179 and taxes (not tax advice)
Under Section 179, a business can deduct the cost of qualifying equipment in the year it is placed in service. IRS Publication 946 gives a maximum deduction of $2,500,000 for tax years beginning in 2025, reduced dollar for dollar once the cost of equipment placed in service exceeds $4,000,000. Check the current-year figures and whether bonus depreciation applies.
How a lease is treated for tax depends on its terms, including whether it is a true lease or a purchase in disguise, and who is treated as the owner. The tax box in the calculator is a simple estimate: your rate times the deductions you check, with lease payments and loan interest treated as deductible. It is not tax advice, so confirm with your CPA.
After you decide: will the device pay for itself?
Lease vs buy tells you which financing costs less. It does not tell you whether the device is worth having. Put the price per treatment, consumables and a realistic volume ramp into the equipment ROI calculator to see payback and break-even volume. Once the device is running, Prospyr's analytics shows its actual revenue per treatment room.
Frequently asked questions
Is it better to lease or buy a laser or medical device?
It depends on the quotes, the device's resale value and how long you will use it. Buying usually costs less in total when the device holds its value and you keep it for years. Leasing keeps cash free and can make sense when technology changes fast. Run both quotes through the calculator and test a low resale value before deciding.
How do I calculate lease vs buy?
Pick one time frame, usually the lease term. For buying, add the down payment, the loan payments in that window and any loan balance still owed, then subtract the equipment's value at the end. For leasing, add the signing costs and every lease payment, plus the buyout if you keep the device. The lower net number costs less.
What is the implied interest rate on an equipment lease?
It is the rate that makes the lease payments plus the buyout equal to the equipment price you did not pay up front. In the default example, $2,400 a month for 60 months with a $12,000 buyout on a $120,000 device works out to about 10.3% a year, versus an 8% loan. A lease rate well above a loan rate means you are paying for flexibility or a lower payment.
Does Section 179 make buying better than leasing?
It can, if your practice qualifies. Section 179 lets a business deduct the cost of qualifying equipment in the year it is placed in service instead of depreciating it. IRS Publication 946 gives a $2,500,000 limit for tax years beginning in 2025, reduced once equipment placed in service passes $4,000,000. Limits change and eligibility depends on your situation, so confirm with your CPA.
What is a $1 buyout lease versus a fair market value lease?
A $1 buyout lease transfers the device to you at the end for one dollar, so it works like a loan. A fair market value lease lets you buy at the then-current value, return it or renew, so the end price is uncertain. Enter the buyout amount from your lease and choose whether you will keep the device.
What does the equipment loan payment include?
The loan payment shown covers principal and interest on the amount financed after your down payment. It does not include sales tax, installation, training, insurance or service contracts unless you add them to the price. For a full payment schedule on the loan, use the loan amortization calculator.
How accurate is the lease vs buy result?
It is as accurate as the inputs. The biggest swing factor is the resale value, which is an estimate. The calculator also uses nominal dollars and does not discount future cash, so a lease can look slightly worse or better than it would in present-value terms. Use it to compare offers, not to predict your taxes.
Sources and scope
- IRS Publication 946: How To Depreciate Property (Section 179 deduction)
Section 179 limit of $2,500,000 and $4,000,000 phase-out threshold for tax years beginning in 2025. Check the current edition for later years.
- Tanchuco JJQ, Garcia FB. Mechanical Ventilator Acquisition Strategy in a Large Private Tertiary Medical Center Using Monte Carlo Simulation. Acta Med Philipp, 2025 (PMC11936771)
Peer-reviewed. Compares purchase, installment and rental of medical equipment using ROI, IRR, NPV and payback.
- CFPB: How does paying down a mortgage work? (amortization explained)
Explains how a level payment splits between interest and principal, as used for the loan side of this comparison.
A comparison from your own quotes and estimates, not tax, legal or financial advice. Lease terms, tax treatment and resale values vary; confirm with your lender and CPA.