Commercial equipment
Equipment rent vs buy
Find utilization where renting and ownership have equal modeled cost.
Your inputs
Complete the fields for your selected method. Zero means intentionally zero, not unknown. Currency selection labels amounts; it does not convert exchange rates.
How this calculation works
break-even hours=annual fixed/(rent hourly-variable owned hourly).
Rental and owned scenarios must provide the same capability. Include rental fees in the effective hourly quote. No financing or tax effects.
What information do I need?
Use records for the same job, equipment or accounting period. Only the fields for your selected entry method are required. An unknown amount is not zero.
Input definitions and where to find them
- Annual ownership fixed cost (selected currency): Matching invoice, quote, statement, bookkeeping record or explicit budget amount for annual ownership fixed cost. Use the stated period and exclude amounts already counted in another field. Zero means intentionally excluded/not incurred, not unknown.
- Rental cost per hour (selected currency): Effective hourly rental quote for equal capability, with fees allocated on an explicit use basis.
- Owned variable cost per hour (selected currency): Owned usage-dependent expense ÷ matching operating hours.
- Planned annual use (hours/year): Use matching records or a clearly identified owner assumption for planned annual use, in the displayed unit and the stated row/period scope.
Use the Where to find this value controls beside the inputs for available work-it-out helpers. Estimates remain your assumptions; a helper does not verify the source figures.
Worked example
Example amounts use US dollars (USD).
Example answer: Equal-cost utilization is 500.00 hours/year for the illustrative inputs below.
Example inputs
- Annual ownership fixed cost: $12,000.00
- Rental cost per hour: $40.00
- Owned variable cost per hour: $16.00
- Planned annual use: 600.00 hours/year
- Equal-cost utilization
- 500.00 hours/year
- Rent at planned utilization
- $24,000.00
- Own at planned utilization
- $21,600.00
These illustrative values are not recommended rates or industry averages. Replace every example input with your own figures.
Use the result well
Find utilization where renting and ownership have equal modeled cost.
Keep inputs on the same scope and time basis. Calculations retain precision internally; displayed values generally round to two decimal places, with extra precision for very small values and whole-unit rounding where required. Economic comparisons describe your supplied assumptions and do not guarantee future results.
This tool provides business arithmetic. It does not approve engineering designs, establish legal or tax treatment, select equipment or certify safe operating conditions.