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Leasing vs. Buying
3 Year | 5 Year
5-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 $707.47 |
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Taxes $5,250.00 |
PST on Payment $56.60 |
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Total Cost $40,250.00 |
GST on Payment $49.52 |
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Interest Rate 5.25% |
Total Monthly Payment $813.59 |
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Monthly Payment $764.19 |
Position After 5 Years
Leasing |
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Buying |
Total Payments ** $53,697.04 |
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Total Payments $45,851.15 |
Tax Savings *(48%) $25,774.58 |
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Interest $5,601.15 |
Net Cost $27,922.46 |
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Depreciation (42.4%) $25,413.85 |
Buyout at 43rd Month $10.00 |
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Total Deductible Expenses $31,015.00 |
Taxes of Buyout $1.50 |
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Tax Savings *(48%) $14,887.20 |
Total After Tax Cost $27,933.96 |
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Total After Tax Cost $30,963.95 |
After Tax Benefit of Leasing
After Tax Cost of Purchasing: $30,963.95
After Tax Cost of Leasing: $27,933.96
Cash Savings After 5 Years: $3,029.99
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.
** 66 payments - lease is stretched an additional 6 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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