# Buy vs Lease for Medical Equipment

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Last modified: 2026-05-29T19:39:17+00:00
Type: efin_comparison

## Summary

Buy vs Lease for Medical Equipment. Side-by-side comparison with cost analysis, tax implications, and when each wins.

## Content

For medical and dental equipment, the buy-vs-lease decision is heavily influenced by technology refresh cycles, manufacturer service contracts, and rapidly depreciating equipment categories. Lease structures often win for imaging; buying often wins for less-tech-dependent equipment.

Quick decision framework
If equipment category is...Lean toward...
MRI, CT, PET, nuclear medicine (high-tech refresh)FMV lease (let lessor bear residual risk)
Ultrasound (medium refresh)FMV or $1 buyout depending on practice plans
X-ray, fluoroscopy$1 buyout (long useful life, no rapid obsolescence)
Dental chairs, dental imaging$1 buyout or loan (10-15+ year useful life)
Sterilizers, autoclaves$1 buyout or loan (long useful life)
Robotic surgery (high-cost, manufacturer-controlled service)FMV lease (manufacturer often required)
Lab equipment (PCR, mass spec, etc.)FMV lease (tech refresh cycle)


The technology-refresh cycle issue
Medical imaging especially is subject to rapid technology evolution:

MRI: 5-7 year refresh typical (1.5T → 3T → new generation)
CT: 7-10 year refresh (slice count progression, dose reduction tech)
PET: 7-10 year refresh (PET/MR, time-of-flight, etc.)
Robotic surgery: 5-8 year refresh (da Vinci platform updates)

Buying these and trying to use them past the refresh cycle results in:

Difficulty finding manufacturer service contracts
Higher per-procedure costs due to older tech
Loss of clinical capability vs newer competing facilities
Equipment value drops dramatically (often more than depreciation suggests)

FMV leases align the financing term with the refresh cycle, letting you upgrade without owning an outdated piece.

The manufacturer service contract issue
Major manufacturers (GE, Siemens, Philips, Canon) tier their service support:

Active service contracts: equipment under 7-10 years old, full support
Time-and-materials only: 10-15 years old, expensive service
End-of-service-life: 15+ years, manufacturer no longer services

For equipment past the active-service window, resale value collapses because no buyer wants equipment they can't service. This creates risk for ownership and supports the lease model.

The dental equipment exception
Dental equipment doesn't suffer the same rapid-refresh issues:

Dental chairs and units last 15-25 years
Dental imaging (panoramic, intraoral) has 10-15 year useful lives
Sterilizers and instrument processing equipment last 15-20 years

For dental, ownership (loan or $1 buyout) typically wins. Section 179 + bonus depreciation maximize tax efficiency.

Cost example: MRI
$1.2M MRI machine. 25% tax rate.

Path A: Equipment loan (own)

$1.2M at 8% APR over 84 months
Monthly: $18,718
Total payments: $1,572,300
Section 179 + bonus year 1: $1.2M deduction, $300K tax savings
Equipment value at month 84 (7 years): typically ~$200K (manufacturer end-of-service)
Service contract for years 8-10 (if needed): $50K-100K annually


Path B: FMV lease (true lease, 25% residual)

$1.2M asset, 25% residual ($300K)
Monthly: $14,500 (much lower)
Total lease payments over 84 months: $1,218,000
Operating-expense deductions: $1.2M × 25% = $300K spread over 7 years
At year 7: return MRI and lease new generation
New manufacturer service contract on new MRI


FMV lease saves ~$354K of cash payments + avoids end-of-service risk. For high-tech medical imaging, this is the typical winning structure.
Not legal or tax advice. Consult professionals for your specific situation.