Buy, Finance, Lease or Rent? Equipment Calculator

You need the machine. What you don't know is whether to write a cheque, finance it, lease it, or keep renting — and the honest answer turns almost entirely on one number nobody ever asks you:

How many hours a year will you actually use it?

Not how many you hope. How many last year would have used it.

Here's what that number does.

Renting has almost no fixed cost, so the cost per hour barely moves. Owning is nearly all fixed cost, so every extra hour makes it cheaper. Put the two on the same table and the decision makes itself:

In this example the crossover is 300 hours a year. Below it, renting isn't the timid choice — it's the right one. Above it, every hour you rent is money handed to the rental company.

All four routes, priced the same way

Enter the machine once — price, how long you'll keep it, resale, hours of use, maintenance, insurance, storage, your finance terms, your lease terms, and what the rental yard charges. The workbook prices every option over the same period:

• Buy with cash — $80,200 net over five years in the example
• Finance it — $92,330
• Lease it — $84,400
• Keep renting — $141,388

A $61,188 gap between the cheapest and dearest way of getting exactly the same machine.

Things it does that other calculators don't

It separates up-front cash from actual cost. Buying outright looks brutal on day one and is usually cheapest over five years — which is exactly why dealers lead with the monthly payment.

It models lease hour allowances. Watch the lease line stop improving at high usage while owning keeps getting cheaper: that's your overage charges eating the deal, and it's the trap most lease comparisons never show.

It charges interest properly, with a real amortising payment, and only counts the payments that fall inside the years you'll actually keep the machine.

And it tells you when not to trust it.

If your honest usage sits within about 15% of the crossover, don't buy. The forecast isn't that accurate, and being wrong on the rental side costs a few hundred dollars while being wrong on the ownership side costs tens of thousands.

The six questions on the last page

Where did your hours-per-year figure come from — invoices, or optimism? If the work dried up for six months, could you still make the payment? Is the rental yard ever out of stock when you need one? Would buying this consume cash you need for payroll next quarter? Is this machine the constraint on taking more work, or is it the thing you'd enjoy owning?

That last one costs people the most money. Wanting the machine is a perfectly good reason to buy it — but it should be a reason you've said out loud, not one dressed up as a cost calculation.

On tax

This is a pre-tax cash comparison, and it says so. Depreciation, Section 179 and lease deductibility can move this decision, the rules change, and they depend on your situation — so there are two clearly-marked cells for the figures your accountant gives you, rather than assumptions baked in that would be wrong for half of buyers.

Built for

Excavation, concrete, landscaping, roofing, tree work · farms and ranches · shops buying a machine tool · anyone weighing a truck, a trailer, a lift, a mini-ex or a skid steer against another year of rental invoices.

What you get

One .xlsx file, five tabs, instant download. Excel, Google Sheets, Apple Numbers, LibreOffice. No macros, no add-ins, no subscription.

A used mid-size skid steer is already loaded as a worked example. Type over it.