Leasing is a financing arrangement designed for medium-to-long-term use with a path to ownership (or a fixed buyout). Rental is short-term, pay-as-you-go access with no ownership path—great for brief jobs or one-off needs.
Use this quick guide to decide which fits your project, cash flow, and tax strategy.
| Dimension |
Leasing |
Rental |
| Time horizon |
Months to years (e.g., 24–72 months) |
Hours, days, or weeks |
| Ownership path |
Yes (e.g., fixed or $10 buyout, % residual, or FMV) |
No (asset returned at end of rental) |
| Monthly cost |
Lower than renting for sustained use; fixed schedule |
Higher on a per-day/week basis; flexible stop/start |
| Upfront cash |
Low to moderate (first/last + fees; sometimes down) |
Low (deposit + first period) |
| Customization & branding |
Usually permitted (decals, upfits) per agreement |
Limited; must return in original condition |
| Maintenance & wear |
Often your responsibility; can bundle add-ons |
Typically included/managed by the rental provider |
| Accounting & tax |
Lease payments often deductible; buyout → capital asset. Confirm with your accountant. |
Rental expense is period cost; no capitalization |
| Best for |
Recurring/longer projects, route commitments, production capacity |
Short spikes, try-before-you-buy, backup during downtime |
Leasing options we offer: Equipment Leases (FMV, fixed/$10 buyout, % residual) and Conditional Sales Contracts. If you want ownership from day one, compare a Loan. Need flexibility for multiple purchases throughout the year? Consider an Equipment Line of Credit. If you already own assets and need cash, look at Refinancing & Sale-Leaseback.
How to choose quickly
Choose leasing when:
- The asset will be used most days for months/years.
- You want predictable payments and a clear buyout.
- You plan to brand or upfit the asset (e.g., trucks, service bodies, attachments).
- You’re scaling routes, crews, or production lines and want to preserve working capital.
Choose rental when:
- It’s a short project, emergency replacement, or one-off job.
- Utilization is uncertain.
- You need a specialty unit for a brief period and can’t justify ownership.
Quick case example
A Greater Toronto contractor has an 8-week retaining-wall job and a 3-year pipeline of subdivision work.
- For the 8-week job: a rental excavator covers the short spike without long commitments.
- For the 3-year pipeline: a lease with a 10% residual lowers monthly costs vs a loan, allows decals and a tilt-rotator install, and provides a known buyout at the end.
Run the numbers in minutes
Not sure where the breakeven sits for your utilization? Model a 48- vs 60-month lease with and without a residual, then compare to a loan using the Equipment Financing Calculator. If you’re evaluating sector-specific gear, these pages can help with requirements and typical structures:
Confirm your target asset is on Eligible Equipment. If you’re ready to acquire, browse Mehmi’s in-house inventory (we own the equipment we sell).
Bottom line
- Leasing = longer-term, lower monthly cost, options to own at the end.
- Rental = short-term flexibility with no ownership path.
Pick based on utilization duration, cash flow, and whether you want the asset long-term.
If you want help structuring the lowest monthly for your workload (FMV vs fixed buyout vs loan), feel free to contact our credit analysts via Contact Us. You can also model scenarios now with the calculator.
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