This calculator from Tealwood Funding Group in St. George, Utah estimates loan payments on equipment and shows how to compare them with a lease quote, including fair market value and fixed buyouts.
Equipment Lease Buyout Calculator: Hydroseeders and Telehandlers for Landscaping Crews
A lease buyout is the price to own the machine at the end of a lease. With a fixed buyout (often a nominal amount or a set percentage), the lease works much like a loan. With a fair market value buyout, the price is set at the end and can be higher.
Illustration only, invented figures: a $96,000 telehandler. Over 60 months at an invented annual rate of 9.5%, a loan would run near $2,016 monthly and $120,971 in total (our arithmetic). A lease at $1,890 a month for 60 months plus a $9,600 buyout totals $123,000 (our arithmetic), $2,029 more than the loan.
A landscaping crew comparing a hydroseeder lease does the same: total every payment and the buyout, and set it beside the loan.
Lease quotes sometimes include a security deposit, an advance payment or a documentation fee. Add those to the lease total, and subtract any refundable deposit returned at the end, before comparing.
FMV Lease Calculator in St. George, UT for Telehandlers and Skid Steer Attachments
A fair market value lease has lower monthly payments, because the lessor expects the machine to have value at the end. If the business plans to keep the machine, the end-of-term price matters as much as the monthly figure.
Ask the lessor how fair market value is determined, and whether there is a cap. For telehandlers and skid steer attachments, resale values vary with hours and condition.
If the business plans to return the machine, a fair market value lease can cost fewer total dollars than a loan; compare the payments alone in that case.
A nominal buyout lease and a fixed-percentage purchase option lease are both fixed-buyout structures. The higher the fixed buyout, the lower the monthly payment, so compare totals, not monthly figures.
What the Equipment Buy vs. Lease Calculator Needs From You
- The price from the dealer quote.
- Any down payment or trade-in.
- An annual rate, from an offer if you have one.
- The term in months.
- For the lease: the monthly payment, the number of payments and the buyout amount.
The calculator covers the loan side. Taxes, fees, insurance and maintenance terms are not included; add them from each offer.
Tax treatment differs between a loan and a lease, and between lease types. Ask your accountant how each would be treated for the business; the calculator does not account for taxes.
Use the same term for both options when you can. A 48-month lease beside a 60-month loan makes the lease's monthly figure look smaller while its yearly cost runs higher; matching terms keeps the comparison fair.
Reading Equipment Buy vs. Lease Calculator Results as a St. George, UT Contracting Business
Results are arithmetic, not offers. A contracting business reads them in three ways: the monthly payment against the machine's billable hours, the total paid against the machine's expected resale value, and the lease total against the loan total.
If the payment looks heavy against the work, a longer term lowers it but adds interest. If the lease total is close to the loan total, the deciding factor may be whether the crew wants to own the machine. The equipment financing page and the mower lease-or-buy article go further; when ready, use the request form.
Run the numbers twice: once at the rate in the offer and once at a rate two points higher. If the payment still fits the machine's work at the higher rate, the decision does not hinge on the exact rate offered.
By Tealwood Funding Group · Updated