Lease vs buy decision calculator

What the lease vs buy decision calculator does

Should you buy with a loan or lease? Enter the price, the deposit, the loan interest and term, the resale value, the lease payment and the running costs of each, and the workbook works out the loan payment, the cost of each option year by year and in total, and which is cheaper over the period.

Who it is for

Business owners deciding on a vehicle, machine or equipment, and accountants or bank officers who must justify the choice.

How to use the workbook

1. Enter the purchase price, the deposit, the loan interest rate, the loan term and the expected resale value.
2. Enter the monthly lease payment, the lease term and the yearly running costs of each option.
3. Read the monthly loan payment and the total cost of buying and of leasing.
4. Check the year-by-year table to see when one option overtakes the other.
5. Save a copy under a new name for each month or year, so earlier records stay as they were.

What is inside

• Monthly loan payment worked out for you
• Total cost of buying after resale value
• Total cost of leasing
• Year-by-year cumulative cost of both options
• The cheaper option and the difference shown at the top

The workbook has these sheets: Instructions, Compare. The main table has the columns Year; Cost of buying; Cost of leasing; Cumulative buying; Cumulative leasing; Cheaper so far. Yellow cells are for you to fill in and grey cells calculate by themselves, so leave the grey cells alone. The example rows show how it works; type over them with your own entries.

Tips for getting it right

• Use a realistic resale value; vehicles lose value quickly.
• Include insurance, maintenance and licences in the running costs.
• Consider cash: a lease may need less money upfront even if it costs more overall.
• Compare tax treatment too, since capital allowances and lease payments are treated differently.

Why keep this record

Running a business on memory works until it grows. Writing the numbers down turns opinions into facts you can compare month to month, and shows early which products, customers or costs deserve attention. Even a simple workbook, used every week, usually beats a sophisticated one that is opened once a year.

Questions people ask

Do I need to know Excel formulas? No. Type into the yellow cells and the rest is worked out for you. The formulas are visible if you want to see how a figure is reached.

Can I add rows or change the layout? You can add your own columns to the right and your own notes. If you insert rows inside a table, copy the grey formula cells down so the new rows calculate too.

Will it work on my phone or in Google Sheets? Yes for viewing and typing, but dropdown lists and the charts look best in desktop Excel or LibreOffice.

Keeping it safe and up to date

A plan is only as good as the numbers you put in. Start with honest estimates, update the workbook as real figures arrive, and compare the two so your next estimate is better. Save a dated copy each month so you can see how your thinking changed.

Read how to build a cash flow forecast for the wider picture. Free calculators that go with it: Capital allowances calculator. See more business templates or ask us for a custom one.

The workbook works in Microsoft Excel, LibreOffice and Google Sheets. It is a tool to help you work out and record figures, not tax, legal or accounting advice, and it is not affiliated with the Kenya Revenue Authority. If something does not work as described, contact us and we will put it right.

Related guides, calculators and templates

• Free calculator: Capital Allowances Calculator
• Guide: Lease or buy: how to decide on equipment and vehicles
• Guide: Capital allowances are now straight-line: what changed and what it means
• Guide: How to screen tenants and write a tenancy agreement in Kenya
• Another template: Equipment maintenance schedule and log
• Another template: 12-month cash flow forecast
• Another template: Break-even and pricing calculator

Need something different? Request a custom template, browse all guides or see every Excel template.