Equipment Lease vs. Buy Calculator
Compare after-tax net cost including Section 179 deductions
The monthly payment isn't the right number to compare when deciding whether to lease or finance equipment. The right comparison is after-tax net cost — which depends on whether you can use the Section 179 first-year expensing deduction, your tax bracket, and the lease structure. This calculator does that math for you.
- ✓Side-by-side after-tax net cost: lease vs. finance
- ✓Section 179 deduction savings (up to $1,160,000 in 2026)
- ✓Adjustable tax bracket (10%–37%)
- ✓Lease residual value / buyout support
Equipment Lease vs. Buy
Compare true after-tax cost including Section 179 deductions
Loan (Buy)
Lease
Monthly payment
$1,503/mo
Monthly payment
$1,400/mo
Section 179 deduction assumes full equipment cost is deducted in year 1 (2024 limit: $1,160,000) and you have sufficient taxable income. Consult a tax professional for your specific situation.
Frequently Asked Questions
What is the Section 179 deduction?
Section 179 allows businesses to deduct the full purchase price of qualifying equipment in the year it's placed in service, rather than depreciating it over multiple years. The 2026 limit is $1,160,000. This can dramatically reduce the after-tax cost of financing vs. leasing.
When does leasing win over buying?
Leasing is often better when: (1) the equipment has high obsolescence risk (technology, medical equipment), (2) you want to preserve capital or credit lines, (3) your tax position doesn't benefit much from Section 179, or (4) the lease includes maintenance/service.
When does financing win?
Financing wins when Section 179 is available, the equipment has a long useful life, and you want to own the asset at the end of the term. The tax savings can be substantial for businesses in the 21%+ bracket.
Does Section 179 apply to leased equipment?
Not typically. You generally must own the equipment to take Section 179. Some 'finance leases' (capital leases) may qualify — check with your CPA.