Lease vs. buy calculator - free accounting templates - Netgain

The Ultimate Excel Guide to Lease vs. Buy Analysis Deciding between leasing and buying an asset—whether it's a vehicle, heavy equipment, or commercial real estate—comes down to more than just the monthly payment. Using Excel allows you to compare the of both options, factoring in the time value of money and long-term equity. 1. Key Metrics for Your Excel Model

: Use the =PMT(rate/12, nper, -pv) function to calculate the monthly cost of buying.

: Use =NPV(discount_rate, cash_flow_range) to determine the current value of all future lease payments. This is the most accurate way to compare the cost of a lease to an upfront purchase. Total Cost of Ownership (TCO) : Buy : (Initial Fees + Total Payments) - Resale Value. Lease : Initial Fees + Total Payments + End-of-Lease Fees. 3. Pros and Cons at a Glance

Excel’s built-in financial functions are essential for an accurate comparison:

To build a robust calculator, you must track these core data points for both scenarios: : Purchase Price (MSRP) Down Payment Loan Interest Rate and Term (Months) Estimated Resale/Residual Value at the end of the term Leasing Inputs : Capitalized Cost (the "price" of the car for leasing) Money Factor (the lease interest rate) Lease Term and Monthly Payment Acquisition and Disposition Fees Mileage Allowance and potential overage charges 2. Essential Excel Formulas