Equipment Lease Calculator

Use our calculator to determine the approximate monthly payments your lease will cost you based on the lease type. You will also be able to calculate your annual average costs according to the terms of your lease.

* N.B. Your lease payments may increase or decrease as a result of applicable credit reviews conducted by the lessor.

Using the calculator

To calculate your approximate monthly payments, simply fill in the calculator fields – equipment cost, lease type, lease term, interest rate – and click on "Calculate".

Equipment Lease Calculator

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The difference between operating and capital leases

A lot of companies, in particular, SMEs, may find leasing a more flexible and affordable choice than traditional equipment financing avenues, such as bank loans to purchase equipment outright.

Capital and operating leases are the two main categories of equipment leases. Under the terms of a capital lease agreement, the lessee is responsible for the management of the asset and all related tax and insurance payments. A capital lease is the right choice for businesses looking to lease equipment long term with the aim of owning the equipment at the conclusion of the lease period.

In contrast, under the terms of an operating lease agreement, the lessor remains the owner of the leased equipment and is responsible for any tax, insurance, and other associated obligations. This form of agreement is ideal for businesses that want to use equipment in the short term and then replace it at the conclusion of the lease agreement, most commonly with a newer version.

Equipment lease types

With our calculator, you can choose from three of the most popular equipment lease types to calculate your payments.

These are:

  1. The $1 buyout lease, a capital lease, in which the lessee makes fixed payments each month and then has the right to purchase the leased equipment for $1 at the conclusion of the lease period.
  2. The 10% purchase lease, which is a combination of an operating and capital lease. It gives you the right to purchase the leased equipment for 10% of its price when the lease ends. This residual cost to be paid at the end of the lease means that the lessee will pay lower average monthly payments, making this a popular lease type.
  3. The fair market value lease, an operating lease also known as a 'true' lease, provides the lessee with a great deal of flexibility at the conclusion of the lease period. When the lease ends, the lessee can give the equipment back, renew the lease, or opt to buy the equipment for its market value. This option is popular among companies that use equipment that typically reduce in value very quickly.

You may also be interested in our Lease Versus Buy Car Calculator

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