Lease vs. Buy Calculator
Compare the cost of leasing an asset against buying it with a loan, in total rupees and in present-value terms.
Lease vs. Buy Calculator
Buy
Lease
Comparison
Difference in PV cost
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Buy: PV of Cost
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Lease: PV of Cost
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Buy: Total Cost (net of resale)
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Lease: Total Cost
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Break-even Resale Value
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Present value of cost
Cash Outflow by Year
| Year | Buy (₹) | Lease (₹) | Cumulative buy (₹) | Cumulative lease (₹) | Lease − Buy (₹) |
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Present-Value Cost Breakdown
| Component | Buy (₹) | Lease (₹) |
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Assumptions & method
- The comparison period equals the lease term. Buying is assumed to end with a sale of the asset at the resale value you enter, and any loan balance still outstanding is paid off from that point.
- Loan instalments are level monthly payments: P = L × i ÷ (1 − (1 + i)^−n), with i the annual rate ÷ 12. If the loan term is shorter than the comparison period, payments stop when it ends.
- Buy costs = down payment + purchase fees + loan instalments + maintenance + outstanding loan balance − resale value. Lease costs = upfront payment + monthly payments + maintenance + end-of-lease fees.
- The comparison is pre-tax and tax-free. Depreciation deductions, lease-payment deductions, interest deductibility and GST or sales tax are not included. Enter amounts net of anything you can recover.
- Cash flows are monthly and arrive at the end of each month. Upfront amounts are at time 0 and end-of-period amounts at the last month. PV discounts each at (1 + annual rate)^(−months ÷ 12).
- Break-even resale value is the resale figure at which buying and leasing have the same PV cost. Insurance, usage limits, penalties and the option to keep the asset after the lease are not modelled.
Results are estimates based on the figures you enter. They are not guarantees and not financial advice.
How to compare leasing and buying
Leasing and buying move the same asset costs around in time. Leasing usually has lower upfront cost and lower monthly payments, but you give the asset back and have nothing to sell at the end. Buying needs more cash at the start and brings maintenance, but you keep an asset with a resale value. A simple sum of payments hides the timing difference, so this calculator also discounts every outflow to today at your own rate, which is usually your cost of borrowing or the return you could earn elsewhere. The resale value is typically the most uncertain input and often swings the answer, so the break-even resale value tells you how low the asset can sell before leasing wins. Because this is a pre-tax comparison, add back any tax benefits separately.