MarginWorkshopLease vs. Buy Vehicle
Compare the total cost of leasing versus buying your next work vehicle over your actual expected hold period.
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Methodology
Formula: Buy cost/year = straight-line depreciation + financing + maintenance. Lease cost/year = (monthly payment × 12) + annual fees. Each multiplied by the expected hold period.
Assumption: Uses straight-line depreciation and a flat annual financing cost, not loan amortization, consistent with Equipment Hourly Cost & Rent vs. Buy’s existing convention.
Limitation: Plug in your own lender’s actual interest cost for more precision if you want it.
Frequently Asked
- What does "apples to apples" mean in this comparison?
- Both options are evaluated over the same expected hold period, so a short expected hold favors leasing's lower short-term exposure while a long expected hold gives buying more time to recover its higher upfront cost.
- Does this include the vehicle's resale value if bought?
- Yes, an owned vehicle's expected value at the end of the hold period is netted against its total cost; leasing has no equivalent residual value to the business.
- What if the actual hold period ends up different than planned?
- Re-run the comparison at a shorter and longer hold period; the cheaper option can flip well before or after your original planned hold length, especially near a lease term's natural end.
- Does this account for mileage limits on a lease?
- Not directly; if a work truck is expected to exceed typical lease mileage limits, factor the resulting overage fees into the lease cost input, since they can materially change the comparison.