Doesnt it cost more to lease?
Leasing is a practical way to use new equipment and compares favorably with other forms of financing, costing you about the same. That, of course, is no coincidence; the marketplace demands it and leasing rates are set accordingly. Leasing companies look at what typical bank loan rates are and then factor in your interest deduction and depreciation to arrive at what a loan really costs you; your net after tax cost. They then set their rates to be competitive and work backwards, factoring in the greater deductions offered by the lease, to arrive at lease payments that will give you the same approximate net cost.
