Lease vs Own Analysis Calculator

Work out lease vs own analysis instantly with clear inputs, formula shown and shareable results.

About Lease vs Own Analysis Calculator

Comparing lease and own means valuing the capital tied up in ownership. Total leasing cost is straightforward, while ownership cost is running expenses plus the opportunity cost of the purchase price, taken here at eight percent a year. Any appreciation in the asset offsets that opportunity cost and should be assessed separately.

Formulas

Lease cost

Total = annual lease cost x years

Ownership cost

Total = running cost x years + purchase price x opportunity rate x years

Worked example

With the default values below, Lease vs Own Analysis Calculator returns Advantage of owning over leasing of -$12,000,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Annual lease costminimum 0: 6,000,000
Purchase priceminimum 0.01: 60,000,000
Annual ownership running costminimum 0: 2,400,000
Analysis periodminimum 1 years: 10 years

Results

Advantage of owning over leasing: -$12,000,000.00
Total cost of leasing: $60,000,000.00
Total cost of owning: $72,000,000.00
Indication: Leasing is cheaper over the analysis period

Step by step

1Values used
2Lease cost
3Ownership cost
4Advantage of owning over leasing= -12,000,000.00
5Total cost of leasing= 60,000,000.00
6Total cost of owning= 72,000,000.00
7Indication= Leasing is cheaper over the analysis period

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation or tax into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How is the Lease vs Own Analysis figure worked out?

Total = annual lease cost x years. Comparing lease and own means valuing the capital tied up in ownership.

Why not just compare rent with mortgage payments?

Because a mortgage payment includes principal repayment, which is saving rather than cost. Comparing it with rent systematically flatters leasing.

What values do I need to enter?

This calculator takes 4 inputs: Annual lease cost, Purchase price, Annual ownership running cost, Analysis period. The pre-filled defaults are a realistic worked example — replace them with your own site or project figures.