How to use the lease-vs-buy calculator
This calculator compares the total cost of leasing versus buying the same chiller over the same horizon. Use it when a vendor (Trane, York, Carrier, Daikin) is offering both a lease and a finance option — common on larger centrifugal units where the manufacturer wants to maintain a service relationship — and you're trying to decide which one actually saves money over the chiller's life.
You'll need the equipment cost (the same number on both sides), the lease's monthly payment and term (typically 60 to 84 months for chiller leases, sometimes with an FMV residual option), the loan's interest rate and term for the buy side, and your honest estimate of how long you'll actually run the chiller. The horizon is the most important input — a chiller's useful life is 15 to 20 years, but a lease term is typically 5 to 7 years. If you keep the equipment past the lease term, you'll either need to buy out the residual at FMV or roll into a new lease — both of which add to the total cost-of-ownership math.
The output is a side-by-side total-cost-of-ownership comparison. A positive buy advantage means buying is cheaper over your stated horizon; a negative number means leasing wins. Rules of thumb for chillers specifically:
- Lease if you're planning a major facility reconfiguration in the next 5 to 7 years that might change cooling load, OR if you expect to upgrade to magnetic-bearing efficiency mid-life and want flexibility to swap units, OR if your ownership/CFO prefers off-balance-sheet treatment for operating expense reasons.
- Buy if you're confident the chiller will run to end-of-life in its current installation, OR if you want to build equity in a long-lived asset, OR if the lease's residual buyout terms would put you over the equivalent finance total.
For ASHRAE 90.1-driven replacement cycles, lease often wins on flexibility — if the next code revision forces a higher-efficiency unit in 7 years, a 5-to-7-year lease maps to your effective useful life better than a 15-year ownership horizon.