Outright purchase, operating lease, equipment finance. The salesperson has a preferred answer (the one with the best margin on their side). Your real answer is a 5-year NPV that includes the tax shield from depreciation, the interest deduction on financing, the opportunity cost on cash you tied up, and the maintenance liability the lease quietly shifted off your books. Put all three side-by-side. Then choose.
What you're buying, what it costs, how long it lasts, what it's worth at the end. Defaults are typical for a mid-size construction-class machine (Cat 320 excavator class, ~$280K new).
If you finance — a Cat Financial deal, equipment loan from your bank, or a dealer-arranged structure. Typical 2025-2026 rates for qualified equipment buyers: 6-9%.
If you lease — the operating lease most equipment dealers and finance arms (Cat Financial, Sunbelt, Caterpillar Equipment Rental) will quote. True operating lease (off-balance-sheet under prior GAAP; right-of-use asset post-ASC 842). Payment includes use, often includes maintenance.
The two levers most dealer pitches gloss over: how much of the cost the IRS effectively pays via depreciation deductions, and what your cash could have earned somewhere else if you didn't tie it up in steel.
All three structures, side by side, on a true NPV basis. The numbers, then the call.
The CFO & Controller's Guide and the Business Operators Blueprint cover the surrounding workflow — capital allocation across the full fleet, the depreciation strategy that compounds across years, lease accounting (ASC 842), §163(j) interest-deduction limits at scale, and the trade-cycle discipline that determines whether you ever achieve fleet-NPV optimization.
Educational and informational purposes only. This calculator and any output it produces are intended solely for general educational and decision-support purposes. They do not constitute investment, tax, legal, accounting, lending, or any other professional advice, and they do not create a fiduciary, attorney-client, accountant-client, or advisor-client relationship of any kind.
Estimates based on your inputs. All results are estimates derived from the data and assumptions you provide. Tax law (including §179, §168(k) bonus depreciation, §163(j) interest limits, depreciation recapture, MACRS class lives, and lease characterization), accounting standards (ASC 842), regulations, market conditions, and the specific facts of your situation can materially change the answer. Equipment-finance rates, lease structures, and residual-value markets shift quarterly. The Baratelli Institute, its affiliates, and any co-branding professional make no warranty of accuracy, completeness, currency, or fitness for any particular purpose, and disclaim all liability for decisions made in reliance on the output.
Consult your own qualified professionals. Before acting on anything calculated here, consult your own attorney, CPA, equipment-finance specialist, or other qualified professional licensed in your jurisdiction who has reviewed your specific facts and applicable current law. The Baratelli Institute is a publisher of practitioner reference material. It is not a registered investment adviser, broker-dealer, law firm, accounting firm, or lender.
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