Lease vs Buy Laptops for a Startup: How to Run the Numbers

The sticker price is only part of it. For every option, compare these over the same period, such as 36 months:

• Purchase or payment. The upfront price for buying, or the monthly fee times the number of months for a rental or lease.
• Setup. Imaging, software install, security configuration and shipping to the employee.
• Support and repair. Warranty length, repair costs, and the cost of a loaner when a device fails.
• End of life. Resale or trade-in value if you buy, or the return terms, buyout price and any damage fees if you lease.
• Offboarding logistics. Retrieving a device from a departing remote employee, wiping it and redeploying it.
• Cash and tax timing. When you pay, and how the purchase or payments are treated for tax.
• Insurance and loss. Coverage for theft or damage, and who bears the risk.

Get a written quote from each provider with every fee itemized, and ask what isn't included.

In this example, say a laptop costs $1,600 to buy, and you plan to keep it for three years. In this example, setup and shipping add $150, and a repair reserve of $100 covers a screen or battery issue. In this example, you expect to resell it for $250 at the end. In this example, buying costs $1,600 plus $150 plus $100 minus $250, or $1,600 net, which is about $44 a month.

In this example, a rental provider quotes $65 a month for the same class of laptop, with shipping, support and returns included. In this example, over 36 months that's $2,340, or about $740 more than buying.

In this example, the question is whether the extra $740 buys enough. If your team is remote, you replace devices often, or nobody wants to run setup and returns, it may. If you have an IT person and a stable team, buying is cheaper. Change the inputs to match your own quotes, especially the resale value, which is the least certain number.

It tends to fit in these situations:

• You're preserving cash. Spreading cost over months protects your runway when every dollar counts.
• Your headcount is uncertain. If you may grow or shrink quickly, you don't want to own idle devices.
• Your team is distributed. Shipping, tracking and retrieving laptops across states or countries takes time that a provider can handle.
• You have no IT staff. Someone has to set up devices and deal with repairs, and a provider can do that.
• You want predictable refresh. Regular swaps keep people on working hardware.

Buying tends to fit when you have IT capacity, a stable team, a long keep-time and the cash to pay upfront. Some companies mix both, buying for core staff and renting for contractors or seasonal hires.

It can change the answer, and it depends on your situation. Purchases may be depreciated or deducted under rules that vary by year and by your circumstances, while rental payments are generally treated as an operating expense. Leases can be structured in different ways with different treatment.

Don't guess. Ask your CPA how each option would be treated for your business this year, and whether timing a purchase affects your taxes. Then rerun the worksheet with the after-tax cost in mind.

Use this list when you compare quotes:

• What is the minimum term, and what happens if you need to end early?
• What does the fee include: shipping, setup, support, device replacement?
• What are the damage, loss and late-return fees, and how are they assessed?
• Can you buy the device at the end, and how is the price set?
• How do returns work for a remote employee who leaves, and how fast is the device wiped and redeployed?
• Which security and device management tools work with the devices?

A device management tool matters whichever option you choose. To compare options, see device management tool comparison, and use the employee laptop provisioning checklist to standardize setup.

For a comparison of rental providers and an HR platform's device features, read rental provider and HR platform comparison and laptop options for distributed teams. If purchases go through a spend tool, spend management tool comparison covers approval controls.