My friend’s parents were recently locked in a marital battle.
They wanted to travel from Michigan to Florida for a wedding, and she wanted to fly for free using frequent flier miles they had accrued. The transportation cost for the trip would be limited to the car they would rent for three days when in Florida.
He, on the other hand, thought it was silly to rent a car when theirs worked perfectly fine. He wanted to make the 24 hour drive down to Florida for their three day trip. He was sure this was the cheaper way to travel, even though they would have to pay for gas and put wear and tear on the car.
Ah, the rental battle.
Is it worthwhile to pay for a rental? The answer, in all honesty, is often that it depends. However, in this case, simple math would have shown him that her plan would have been the cost saver.
Marital battle aside, we Americans don’t often think of renting outside of cars and apartments. Instead, our first thought tends to go to ownership.
There are just a few things we automatically think of renting–of course, cars when we are traveling, tuxedos when our children are going to prom or when men get married, apartments, sure. But for most other temporary needs, we tend to buy instead of rent.
However, if we could let go of this mindset, we may save a substantial amount of money.
How to Determine If It Is Better to Rent or Buy
There are some calculations you can do to determine if it is best to rent or buy.
1. How often will you use this item?
If you will use the item frequently, it will often be a better financial move to buy rather than rent.
When I was breastfeeding my son, I chose to buy a breast pump rather than renting. (Did you even know you can rent breast pumps? You can, often from a hospital.) Renting one cost $20 per month, and buying one cost $250. Considering that I breastfed my son for 12 months and had to pump at work, this purchase looks on the surface to be a wash. However, I used the pump, though not as much, for my two other children. In addition, when I was finished, I sold the pump for $60.
I definitely saved money buying instead of renting.
2. Have you used this item before?
If you haven’t used the item before, you may want to rent just to try it out rather than making a purchase only to discover that you won’t likely use it again.
My husband made our wooden bed frame, and we thought he would use a circular saw for many other homemade projects. Rather than renting the tool for $50, we elected to purchase it for $100. He only used it once and now it is in my pile of items to sell on Craigslist. If we are lucky, we will earn $50 for it and the purchase will be a wash compared to the price of renting. However, we should have rented.
3. Is this a once in a lifetime item?
Many items that we only use once are pricy. Think of wedding dresses, for instance. You wear them once, pay an expensive fee for the dry cleaner to clean and preserve it, and then it sits in the closet. Why not buck the trend and rent a wedding dress instead?
Did you know that girls can rent their prom dresses? Why not? Boys rent their tuxedos. According to MainStreet, “Wear Today Gone Tomorrow rents out dresses and accessories by top designers, many for 90% off the retail price, such as Kay Unger strapless silk ruched dress for $57 for a seven-day rental (retails for $570).”
You may be surprised by other things you can rent:
- Caskets (Yes, caskets–pay $800 to rent vs. $2,500+ to buy. This is typically an option for those who have a funeral, but then plan to cremate the deceased.)
- Textbooks [See our article about saving on textbooks.]
- Camping gear
- Musical instruments
Another Way to Save
While renting can save you a great deal of money, don’t forget the other option–buying used.
Sometimes you can buy things used for less than you may pay to rent them. A case in point may be a musical instrument, especially if your child will be playing the instrument for several years.
We live in an expensive world, but you can save yourself a bundle by strategically renting what you need or buying used.
I have found that using a rental car to rack up thousands of miles in just a few days will be cheaper than running your car into the ground. Even if you have a beater, it will work out to keep that beater longer by putting the miles on the rental.
David Leonhardt says
Or sharing. Four families sharing a lawn tractor is much more economical than each of those four families buying their own.
Glen Craig says
Great idea! I’ve heard of people doing this with snow blowers too. You just reminded me that a few families, including mine, would chip in for a garage in our development since we all didn’t need the whole thing.
John S @ Frugal Rules says
We look at how often it’ll be used by us and if we can justifiably find uses for it. If we can’t then we generally rent or borrow from a friend that has the item in question.
Jenny @ Frugal Guru Guide says
I rented a floor sander–and bought a wood chipper!–after exactly that kind of math. It will take 2 years for the wood chipper to be worth more to buy than rent, and it’ll pay itself back in mulch in time.
For home improvement jobs/repairs, Home Depot has a plethora of tools they will rent out. This saves a bucket load of money if you only need the tool for a single project/repair.
I rented a car to drive 700 miles (round trip) because my 17 year old car probably did not need more miles on it. The rental car was a high MPG hybrid! I think it is cheaper and more efficient to fly and rent a car too.
Greg @ Thriftgenuity.com says
My parents rented my guitar before buying me one so they knew I would stick with it. I have tried to employ similar principles myself, especially in the world of tools. That said, if I can borrow from somebody, even better than renting :)!
New cars are often more economical anyway, so you have to factor that in if you have an older car – it will probably use more fuel.
I often rent tools as I don’t have the space to keep them, and I often find I only need to use them once so buying them doesn’t make sense for me.
Jeff @ Money and Potatoes.com says
It might be a good idea to take advantage of the car rental companies that offer great weekend or discounted rates once a month or so. You can save some wear and tear on your car and you also get to drive a new car for a few days out of the month. I have done this many times in the past when they have $20.00 per day weekend rates or even cheaper than that.
You might actually break even or save money if you get a compact car that is much better on gas than your current vehicle and you plan on driving a long distance.
Manette @ Barbara Friedberg Personal Finance says
Although that I agree that there are certain situation when renting is better than buying, I prefer to borrow first if I am going to use an item only once. I ask friends and relatives if they have the particular item (carpentry tools, evening gown, tent, sleeping bag, etc.) and borrow them before renting or buying.
Ralph Beale says
Interesting debate – buying vs renting vs sharing. I have often wondered how much money is wasted because neighbors can’t get together and share stuff like power tools and garden machinery. Snow blowers and lawn tractors have been mentioned. Across the country this must run into million of dollars being unncessarily spent every day. We can create Neighborhood Watch groups, can’t be that big of a leap to have Power and Garden Tool Watch groups? (Yeah I know, needs a catchier title :-))
My rule of thumb is that if I think I’m going to use something less than twice a year I rent it if I can. On the other hand I prefer to drive my own car rather than flying and picking up a rental. Yes it’s more expensive but I’m one of those strange people that loves road trips 🙂
As you said, the trick is figuring out all the hidden costs of both renting and buying. All the minute costs – including rental insurance and taxes – might make or break the decision.
I also love that you included buying used items to save money. As an avid thrift store junkie, I get most my work suits and blouses from second-hand stores for a few dollars. Not only do I save in costs of work outfits, but I also am able to find a large selection of real people’s sizes in thrift stores!