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Leasing vs. Buying
3 Year | 5 Year
3-Year Lease Comparison for $35,000.00
Leasing |
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Buying |
Equipment Cost $35,000.00 |
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Equipment Cost $35,000.00 |
Monthly Payment $974.30 |
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Taxes $5,250.00 |
PST on Payment $77.94 |
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Total Cost $40,250.00 |
GST on Payment $68.20 |
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Interest Rate 5.25% |
Total Monthly Payment $1,120.45 |
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Monthly Payment $1,210.85 |
Position After 3 Years
Leasing |
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Buying |
Total Payments ** $48,179.30 |
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Total Payments $43,590.66 |
Tax Savings *(48%) $23,126.06 |
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Interest $3,340.66 |
Net Cost $25,053.24 |
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Depreciation (42.4%) $17,066.00 |
Buyout at 43rd Month $10.00 |
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Total Deductible Expenses $20,406.66 |
Taxes of Buyout $1.50 |
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Tax Savings *(48%) $9,795.20 |
Total After Tax Cost $25,064.74 |
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Total After Tax Cost $33,795.46 |
After Tax Benefit of Leasing
After Tax Cost of Purchasing: $33,795.46
After Tax Cost of Leasing: $25,064.74
Cash Savings After 3 Years: $8,730.73
Actual cost of leasing is less than borrowing due to:
- No need to finance PST and GST as it is added to monthly payment.
- Lease payment is 100% tax deductible. (*An advantage of 48% write off if you are in the top marginal bracket)
- Only the interest portion of the loan is tax deductible.
- It takes approximately 10 years to fully write-off equipment through depreciation.
** 43 payments - lease is stretched an additional 7 months to a $10.00 buyout - very advantageous!
Quotes are subject to change and credit approval
For more information, please contact:
Cheryl Hart
1-800-268-6497 ext. 212
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