Equipment and vehicle lease calculator

Enter the asset value, anything paid at the start, the rate, the term and the residual, and this works out the lease payment and what the arrangement costs.

It models the lease cashflow only. What a lease does to your tax position depends on the entity and the contract, and is not modelled.

Asset value ($)

The value of the asset being leased, before any amount paid up front.

Paid up front ($)

Anything paid at the start — a first payment in advance, or a contribution.

Finance rate (% p.a.)

Nominal annual rate implicit in the lease.

Term (months)

Length of the finance contract.

Residual value ($)

Amount owing on the asset at the end of the lease. Set by the financier under its own framework, so it is entered here rather than estimated.

Payment frequency

How often the lease payment is made.

Lease payment

$1,848.62

Amount financed by the lease: $75,000.00
Paid up front: $0.00
Total of lease payments: $88,733.89
Total paid during the lease: $88,733.89
Residual at the end of the lease: $0.00
Total including the residual: $88,733.89
Finance cost in the payments: $13,733.89
Lease payments per year: $22,183.47
Number of payments: 48

What to enter

Paid up front
A first payment in advance or a contribution at the start. It reduces what the lease finances, which is why the payment falls when it rises.
Residual value
What is owing on the asset at the end of the lease. It is set by the financier under its own framework, so it is entered here rather than estimated.

Reading the result

The annual figure is usually the more useful one for a business, since it is what appears in a budget. The per-payment figure is what leaves the account.

Total including the residual is the number to compare against buying the asset outright. Comparing lease payments alone against a purchase price ignores the residual entirely and makes leasing look cheaper than it is.

The finance cost line separates what you are paying for the asset from what you are paying for the arrangement.

Worked examples

Every figure below is computed by the same calculator on this page, from the inputs described. Nothing here is typed in by hand, so an example cannot disagree with the tool.

A $75,000 asset leased over four years

Lease payment: $1,849
Amount financed by the lease: $75,000
Paid up front: $0

With no residual the lease clears the whole value. Compare the total against the asset value to see the finance cost on its own.

The same asset with $7,500 up front and a $20,000 residual

Lease payment: $1,312
Amount financed by the lease: $67,500
Paid up front: $7,500

Both changes lower the payment for different reasons: the upfront reduces what is financed, the residual defers part of it. Only the first actually reduces the total.

How it is worked out

What the lease finances is the asset value less anything paid at the start. The payment amortises that down to the residual over the term.

The same arithmetic drives the chattel mortgage calculator. The two exist separately because the questions differ, not because the formulas do.

How every calculator on this site is built

What it assumes

Payments in arrears
Payments are treated as falling at the end of each period. A lease paid in advance costs slightly less in interest, and the difference grows with the rate.
No fees or excess charges
Establishment fees, excess kilometre charges and end-of-term condition assessments are excluded and can be substantial on vehicle leases.
Nothing about packaging
Novated leases involve salary packaging, fringe benefits tax and employer arrangements. None of that is here, and treating a novated lease as an ordinary one will mislead.

Where it stops being right

Ownership is not modelled
A lease is not a purchase. What happens to the asset at the end — return it, buy it at the residual, or refinance — is a decision this calculation does not make.
Not a comparison against buying
Comparing leasing against buying properly needs the tax treatment of both, which is exactly what is excluded here.

Chattel mortgage calculator
Works out the payment, total cost and interest on a chattel mortgage for a vehicle or item of equipment, including a balloon or residual where the contract has one.
Business debt service calculator
Solves for the additional facility a business cashflow supports at a debt service coverage ratio you set, after existing commitments.
Business term deposit calculator
Works out interest, maturity value and effective return on a term deposit held by a business, before and after tax at the rate that applies to the entity.

All business and equipment finance calculators

Putting this calculator on your own site

This calculator can be embedded on a business website, branded to match it, with a call to action that sends the enquiry to that business rather than collecting anything here.