About this calculator
Renting and buying a device are not two prices for the same thing. A rental payment buys the use of the device plus the option to hand it back and take a newer one — and the rental company carries the resale risk. A purchase buys the device itself, and its true cost is not the price on the box: it is the value the device loses while you own it. A $1,500 phone that resells for $700 after two years really cost $800, not $1,500.
This calculator compares the two paths month by month. For buying, cumulative cost is the price plus any care plan, minus what the device would resell for that month — resale value falls by the depreciation rate each month, with a 10% floor, because even an old device is worth something for parts or refurbishment. For renting, cumulative cost is the monthly rent times the months plus any upfront fees. The first month buying's cumulative cost drops below renting's is the breakeven month. The page works for phones, laptops, cameras and any gadget with a rental market: only the numbers change, and the currency menu at the top swaps the symbols without touching your figures.
How to use it
- Enter the device price and the monthly rent for an equivalent rental.
- Add any one-time costs: upfront rental fees, and a care plan or extended warranty if you would buy one with the device.
- Set the monthly depreciation rate — 3% a month is a typical phone-like pace; laptops and cameras usually fall slower, closer to 1–2%.
- Set how long you keep the device, then read the cheaper path first and the table second: if the breakeven month is beyond your horizon, renting wins on the numbers.
The formula
Resale value decays geometrically: each month the device keeps (1 − depreciation) of the previous month's value, which matches how electronics actually lose value — fast at first, slower later. The 10% floor stops the model from pricing a working device at zero. Buying's cumulative cost therefore rises quickly at first (when depreciation is steepest) and flattens as resale approaches the floor, while renting's cost rises in a straight line — which is why the two curves cross at most once.
Worked example
A $1,500 device rented at $39 a month, depreciating 3% a month, over 24 months: after 1 month buying has cost $45.00 (the value lost) against $39.00 of rent, so renting is ahead by $6.00; after 6 months buying is at $250.54 against $234.00 of rent. Buying pulls ahead in month 11 — $427.05 against $429.00, ahead by $1.95 — and by month 24 buying costs $777.87 total against $936.00 for renting, ahead by $158.13, or $32.41 a month against $39.00. The sensitivities show what matters: raise the rent to $59 a month and buying wins from month 1; add a $199 care plan and renting wins the whole horizon ($976.87 against $936.00); raise depreciation to 5% a month and renting wins too ($1,062.02 against $936.00). Depreciation and care-plan costs, not the price tag, decide this one.
Frequently asked questions
When does renting a device actually win?
Three cases: a short need (a camera for a project, a laptop for a semester), a habit of upgrading every year (where buying means paying the steepest first-year depreciation over and over), and a company that reimburses rentals or deducts them as an operating expense. At the defaults, a 24-month horizon favors buying by $158.13 — but cut the horizon to 6 months and renting wins by $16.54, because buying has barely had time to cross over.
What affects the result most?
The resale value — which means the depreciation rate and, in real life, the channel you sell through. A manufacturer trade-in typically pays less than a private sale, and a refurbished buyback program sits in between; a 10-point swing in what you actually recover can flip the winner, as the example shows (3% monthly depreciation: buying wins; 5%: renting wins). Before deciding, check a real resale quote for your exact model instead of trusting the default rate.
What about damage and wear fees when returning a rental?
They are real and they are not in the defaults: most rental contracts charge for damage beyond normal wear — cracked screens, deep scratches, missing accessories — and the bill arrives at return. If your use is rough, add an expected damage amount to the upfront fees or the monthly rent before comparing. A single $150 screen repair charged at return would erase most of renting's $158.13 edge at the defaults.
How does battery health affect the result?
Directly, through resale value. A phone at 85% battery health sells for noticeably less than the same phone at 95%, and some buyback programs grade by battery health alone. If you run a phone hard for two years, assume a faster depreciation rate (or a lower resale floor) than the default — that pushes the breakeven month later and can flip a close call to renting.
What formula does this device rent vs buy calculator use?
Resale value (month m) = price × max(10%, (1 − depreciation)^m); Cumulative buying (month m) = price + care plan − resale value (month m); Cumulative renting (month m) = monthly rent × m + upfront fees Resale value decays geometrically: each month the device keeps (1 − depreciation) of the previous month's value, which matches how electronics actually lose value — fast at first, slower later. The 10% floor stops the model from pricing a working device at zero. Buying's cumulative cost therefore rises quickly at first (when depreciation is steepest) and flattens as resale approaches the floor, while renting's cost rises in a straight line — which is why the two curves cross at most once. The worked example on this page applies the formula step by step with real numbers, so you can verify the result by hand.