How the Buy, Rent or Finance Equipment works
Buying costs what the equipment loses in value each year (price minus what it's worth at the end, spread over its life) plus upkeep.
Renting costs the daily rate times the days you'd use it.
Financing costs the same as buying plus the interest, spread over the equipment's life. The monthly payment uses a standard loan formula.
Buying wins after shows how many days of use a year make buying cheaper than renting.
Tips from the trade
- Rent first if you're not sure how often you'll use it. Real use beats a guess.
- Count the time spent picking up and returning rentals. It's paid time too.
- If you finance, make sure the jobs it makes possible cover the monthly payment.
A worked example
Here's the example that's already filled in above, so you can see how the Buy, Rent or Finance Equipment works before you enter your own numbers.
- Price to buy$3,000
- Years it will last4
- Worth at the end (% of price)20%
- Upkeep per year$200
- Days a year you'd use it60
- Rental price per day$120
- Finance rate (APR)9%
- Finance term (months)24
The result: buying, per year $800; renting, per year $7,200; financing, per year $872; buying wins after 7 days a year.
At 60 days a year, buying costs the least. Buying beats renting once you use it more than about 7 days a year. Financing would be about $137 a month.
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When you need more than the free Buy, Rent or Finance Equipment
This calculator answers one quick question. Running a business means doing it on every job, with your own rates saved and a quote you can send.
Buy, Rent or Finance Equipment questions
Is it better to buy or rent equipment?
Buy if you'll use it often enough that the yearly cost of owning is less than renting. This calculator shows the number of days a year where buying starts to win.
What about financing?
Financing spreads the cost into monthly payments but adds interest. It can make sense when the equipment brings in more work than the payment.
How long does equipment last?
It depends on the equipment and how hard you use it. Use your own experience or the maker's guidance, and adjust the years.
Does this include taxes or depreciation deductions?
No. Tax treatment can change the picture, so ask a tax professional how buying would affect your taxes.