A lease is a financing agreement that is structured to meet your organization's special needs. Obviously, you will want to factor the cost of leasing into your evaluation. Generally, the cost of leasing is comparable to those of other financing options when looking at the whole transaction. It is important to point out that leases are not loans. As a result, their costs are figured differently from those of loans.
Leases take into account that the equipment is worth something at the end of the lease term.
This is called its residual. Residuals are built into lease pricing, usually making the lease payments lower than a loan. To compare lease products, it is better to compare monthly payments than to try to compare loan interest rates with lease rates. Leasing companies can offer competitive rates for a number of reasons. The lessor also is better able to take advantage of the deduction for depreciation expense that comes with ownership.