Personal Finance 

When Does Renting Beat Buying?

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If experiences appreciate and things depreciate, is there a way for us to separate the experience of a thing away from the thing itself? Of course there is – rent it. If we’re going on vacation, it makes perfect sense for us to rent a car rather than buy it (though in places in Europe, for long “rental periods,” you actually buy the car and sell it back) and we don’t think anything of it. So why don’t we do it for things we use only infrequently? We don’t realize it’s an option.

Whenever you consider the financial trade-offs between buying something and renting something, it really comes down to a few a few factors and here’s what I think they are.

How To Decide If Renting Beats Buying

How much of a premium are you paying just for the right to rent rather than buy? This is best illustrated by a car lease. The typical car lease requires you to put down a significant down payment because you’re “paying” for the immediate depreciation of the car. That’s a significant premium over buying because, in theory, you can divide that cost over the life of the car. That’s one reason why leasing a car is a bad idea absent compelling reasons to do so.

How long will the product last beyond your regularly scheduled payments? The true value in owning a car comes in after year 5, or when the car note is paid off, and you can drive the car into oblivion. That “drive the car into oblivion” period is where buying is better than leasing because you’re getting the car for “free,” excluding gas and maintenance. With a lease, you are required to enter a new lease or begin a new set of payments if you buy the car directly from the company.

You have to look at how often you use the item. Your monthly payments won’t change but your usage behavior will dictate how much it costs per use (the same idea as maximizing your entertainment dollar). If you live in a city and use a lot of mass transit, it makes no sense to lease or buy a car. If you drive everyday, then you’ll want to consider buying or leasing a car.

With a car, it sounds pretty easy, right? It’s been analyzed to death because it’s such a major purchase. You know where it hasn’t been analyzed to death? Almost everything else! This is especially true for entertainment media like books, magazines, movies, video games, etc. I would argue that in almost all cases, you’re far better off renting or borrowing something instead of buying it. Let’s take each item and make a case for renting.

Rent Video Games

Video games cost around $60 a pop for the new systems like the XBox 360 or the Playstation 3. For $15.95 a month (plus tax), you can get one game a month (sort of like Netflix, but for games). That means each month you’re paying a quarter of a game’s value to rent it. At first that sounds ridiculous, because after four months you won’t actually own that game… but think about how many games you play for more than four months. I don’t mean play every once and a while, I mean hardcore play all the time. There probably aren’t that many games. How many games are in the deadpool part of your library? Probably a lot. How many of those did you play for at least four months straight?


Just look at all the DVDs you own… how many do you watch? (oh by the way, they’re obsolete, time for Bluray) This is why Netflix is popular. Enough said.


We are fortunate enough to live beside a library so we hardly ever buy books, but books are another entertainment media you don’t ever really need to buy. How many books do you read once and then never again? I would argue you should get your books from the library but if you aren’t near one and want an online book rental alternative, Bookswim seems pretty slick but it pricey. The base plan is $19.95 for three books out at a time (about the price of three paperback books). If you’re a voracious reader, that might be a good option is a library is ridiculous far away… otherwise hit the library and “rent” your books.

Clothing & Accessories

With the popularity of Netflix, plenty of other “things” are available for rent by mail such as handbags (Bag Borrow Steal) and fashionable clothes (Rent The Runway). If it makes sense for tuxedos, why not for women’s clothing and accessories? I’ve always wondered why they don’t rent bridesmaid’s dresses as often as they do tuxedos but you can rent handbags.

Think about some of the things you buy and use infrequently, see if there’s a way for you to rent it! Is there something else you can rent, rather than buy, that I missed? I’d love to expand this list.

{ 37 comments, please add your thoughts now! }

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37 Responses to “When Does Renting Beat Buying?”

  1. Dave says:

    The only thing I have rented besides the stuff you mentioned is tools. Being a home improvement guru, there are lots of tools that don’t make sense to buy, but you sometimes need. My favorite tool rental so far was the cement saw – if you’ve never rented one, I’d highly suggest it – its a very manly tool. I’ve also heard that you can “rent” tools from some of the chain car parts stores – if you buy the part and need a specialty tool to install it, they sometimes have them.

    • qixx says:

      Some car parts stores will loan tools needed for a job. You will likely have to leave a credit/debit card number on file and will be charged the price of a new tool if you don’t return it. Worth the trip back to the store for free use of a tool every time i’ve done it.

  2. I’m a fan of driving cars into oblivion. 100K miles is just getting started 🙂 My wife is suggesting that we replace the 98 Contour soon, though (even though it has only 115K miles). Generally, I’ve gotten 130K out of cars before replacing them.

  3. Renting is usually a much better idea. We are always under the idea that we have to buy something to be able to get what we want. I would rather rent something for a fraction of the cost, especially if I am only going to use it a few times.

    The clothing one is a great suggestion. So many people buy tons of clothing and don’t ever wear them. I have even seen places where you can rent or buy wedding dresses used, since they are only used once.

    • Beth says:

      I know a few girls who have bought their wedding dresses used, or sold their dresses after their wedding.

      Really, who has room in the closet? 😉

      • Chris says:

        I wish my wife knew you. I had to buy the dress, then preserve it, all so that it will never be worn again.

        Not frugal, not green, not smart….

    • GT says:

      I don’t want to sound annoying, but the idea of renting is that many people use the same item at different times. So it shouldn’t be a surprise to rent a *used* clothing (even a wedding dress)!

  4. CK says:

    I typically rent large tools and lawn equipment. Things I’m only going to use once or rarely. Even if it doesn’t quite work financially at least I don’t have to store and maintain the item.

  5. cubiclegeoff says:

    Two other, much larger examples are vacation homes and boats. Since you only use a vacation home occasionally, most likely it’s better to rent than to own. This may not always be the case (if you can rent it out when you’re not using it and make enough to pay for the year), but I bet most of the time it’s better to rent than own. Like a ski condo, to rent it, you would really only make enough money during ski season, but that’s also when you want to use it, so it may not work out.

    Also, boats are extremely expensive, and if you live in the northern parts of the country, the boat would be unusable about half the year or longer. You can now join groups and pay for seasonal use of a boat with a select group of others and not have to deal with upkeep and storage, and if you don’t like the boat, or want to use a bigger one, you can without the huge financial loss.

    Another larger purchase is a truck or SUV. Most people don’t need these large cars everyday. It’d be cheaper to have a smaller car and rent the truck or SUV only when you need it.

  6. cubiclegeoff says:

    One thing I find that’s also hard about borrowing books, DVD’s, etc, is during birthdays and Christmas. That’s usually when I get these items because I don’t really want other things and it’s tacky to just ask for money. But it would be nice to be able to say to just give money since it would help me more and I can get everything else a lot cheaper by borrowing from the library or getting it used.

    • Shirley says:

      Oftentimes I give money instead of a gift and tell that person that they are a better judge of what they want/need than I am. Once you get to this point, if the recipient responds telling you what they got and how much they enjoyed it, the die is cast for future gifts.

      You might get this started by saying, “I really enjoy renting DVDs (or whatever) because I seldom watch the same one more than once.” The astute giver will pick up on this clue/hint. 🙂

  7. Beth says:

    Having recently been in a wedding, I would loved to have rented a dress! However, I think the problems with renting bridesmaids dresses are that there are too many options (unlike tuxes, for which there are limited options at the store) and too much altering is required. Women’s clothing in general is much more fitted, and guys don’t have to worry about fitting breasts and hips. (Sorry to be blunt!) I couldn’t wear a dress that a girl a few inches shorter and a cup size smaller wore.

    Hmmmm. Though it would be possible to design a line of dresses that would be suitable for renting… Maybe… But would people go for it?

    • ziglet19 says:

      I would. For my sister’s wedding, she picked out bridesmaid dresses from a popular chain store well in advance of the wedding. I checked in on ebay for a few weeks and found the dress I needed in the correct size and color for only $30! Sure beats the $119 they wanted at the store.

  8. Shirley says:

    We have rented large bowls and fancy tableware for family occasions, a cement mixer for a one-time backyard job, and skis and skates wherever needed.

    My friend rents large potted plants for temporary landscaping.

    Another rents a ‘station’ at a beauty salon where she works whenever she has appointments.

    • Ryan says:

      I think sporting equipment would be a better buy than rent. For example, I used to rent skis whenever I went skiing (living in Florida, I don’t get to ski a whole lot), but if you just buy your skis, you break even after a couple of multiday trips to the slopes. There also isn’t much upkeep and not a lot of storage space required.

  9. zapeta says:

    I’ve rented things like canoes for some outdoors trips we have taken. We have the basic outdoor gear but anything specialized that we don’t use often we rent.

  10. Jon5475 says:

    I found what I think is a smart way to lease a car: lease a used car that’s still under warranty. That’s what I did. When I was out of college, I had cash flow but very little money saved up, and I knew I was going to get married and start a family soon. Buying a new car and driving it forever didn’t make sense for me. So I leased a 2-yr old Honda that was still under warranty. I didn’t have to pay the initial depreciation, and I wouldn’t have to shell out cash I didn’t have for repairs. When the lease was up, I had the option of turning the car in or negotiating a buyout that made the lease a decent deal for my circumstances.

  11. Jes says:

    Something I wish I could rent, but have never seen offered — a sewing room. I occasionally (not often) get a fit to sew something, but have no space even to keep a portable machine, let alone set one up. If I could rent by the hour a space with a machine, ironing board, cutting table, tools (like scissors, straight pins etc.), maybe a serger, I’d sew something every once in a while. I’d also rent it for a couple of hours maybe once a month or so to do alterations and repairs.

  12. WR says:

    Things I buy:

    1. My home. Bought a ‘used’ home and got a bargain. Big debate now is whether it makes more sense to own or to buy. We are in a unique time. Interest rates are low and home prices are low. You have to really shop around for both, though. Buy a good home in a nice neighborhood at a bargain price and you can hardly go wrong.

    2. A car. In my case a truck. Again bought it used and got a bargain.

    3. Gaming Boxes. Got a Wii new about 3 years ago and buy the games used from Gamestop. Got an XBOX360 used for 99.00 and get the games used as well. Mainly use the XBOX to watch Netflix ‘watch it now’ on TV. After we finish playing the games we either sell them back or trade them with friends.

    Things I Rent:

    1. Large Boat. Very few people should own a boat. I inherited a sailboat once and the adage “A hole in the water in which you pour money” is startlingly accurate!. This is true especially for any boat that a. has a motor, b. needs to be winterized c. needs to be towed around (gotta have a big 4WD truck now to yank around my big boat…). I will only own a boat that I can lift myself 🙂

    Every significant body of water we have ever been to. Ocean, Sea, Lake, River even ponds in some instances, have had a boat rental facility. The prices are usually excellent. If you are willing to negotiate they will sometimes throw some extra stuff in. Instead of trying to drive down their price, ask them to throw in the fishing gear for example.

    2. Heavy Equipment. I rented a ditch witch, a bobcat, a tractor and a compressor for various projects. If you get up early and finish the job in as few days as possible you can save even more.

    3. Movies. Netflix is awesome. Love watch it now and the low prices.

    4. Vacations: You can rent an RV, a hotel room, camping equipment and the like. This is a personal decision as it depends on how you vacation. We (my family) are all over the place in respect to how we vacation. Often we take the small POP-UP camper that we own and rent a spot on the beach. Other times we fly to Europe and rent a cottage. We have driven cross-country and stayed in hotels all along the way at deep discounts. I own a kayak but we rented one anyway (The relative Pain in the arse to haul a kayak around on our vehicle proved to be too much). We live near whitewater so it ‘also’ makes sense to own.

    Here are my weaknesses:

    1. I buy way more books than I should. Maybe it makes me feel smart or something. I buy hardcovers too (Gasp!). I should go to the library and/or used bookstore more. I am a sucker for big box bookstores.

    2. When we do rent, I sometimes go a bit overboard. Did I really need a 40′ boat? Did I really need the 81HP earth mover to prep the driveway? I justify it by saying I “saved” so much by not buying blah blah blah.

    Storage and maintenance is a huge issue and is not cheap. If you have a ‘rental storage unit’ you are paying for, you might want to just donate all the crap you are paying to store, take the tax break and call it a day.

    Overall, I think renting is probably better than owning in a lot of instances.


  13. RJ Weiss says:

    I apply this concept to a lot of things. First things that come to mind include movies (redbox), books (library), and tools and equipment (anything I just use once a year like I rent).

    Where I don’t rent, cars and house.

    • qixx says:

      Renting a car can be a much cheaper option. Besides the obvious rental car on vacation you can find “fancy” vehicles for rent in some cities. Ever want to drive a classic muscle car or a Lamborghini? Rent one for the day.

      Also renting a home can be a better option in some situations. My last rental was $425 a month in West Seattle. Normal rent in the area was $850-$1200 a month. My rent was less than half what a 30 year mortgage payment would have been. To make buying cheaper than renting would have taken over 60 years; Not counting any other home ownership costs.

      I do agree renting things you will use over the course many months/years is usually a bad idea. But some times the math shows otherwise.

  14. hoht says:

    I wholeheartedly agree. Renting video games and movies is a lot cheaper since I’m always studying. So when I do have some free time, I love a shooter game or movie to take the stress away.

    • Chris says:

      Family members often want a movies for gifts and it bothers me to give that to someone, unless I know it is there favorite and that they will watch it over and over again.

      • Shirley says:

        This is the perfect opportunity to ask, “Can I give you the money for a movie instead and then you can pick out which one you would like to buy or rent?” You will probably get an enthusiasic “YES”.

  15. I rent where I live. Hopefully I won’t get alot of email over this. But it is nice to take off part of my rent and utilities for my home office on my taxes….

  16. Chris says:

    Scuba gear. I own mine but use it often. Many divers will never need to own theirs.

  17. jsbrendog says:

    i was thinking about gamefly. does anyone have any experience with it or another video game rental service? can you actually get games or is it slim pickens? worth it?

    other than that this is a great idea. Long live the library with books, cds, and dvds (and in my library’s case, vhs tapes WOOO)

  18. Paul Sokal says:

    As for ‘renting’ books, you should consider actually supporting your library – then you’ll really be renting. You can donate the money and have your library buy a book that you’re interested in reading.
    The focus here is about smart investing and getting a good bargain. Contributing to the cause of civilization is a good investment that pays excellent dividends.

  19. One of the best things about renting an apartment or house is that if anything goes wrong — and things are always going wrong — you can pick up the phone and dump the problem on the landlord. Let him worry about roof leaks or broken windows or furnace problems. Let him shell out for a new refrigerator or paint job or roof. Renting an apartment or home saves you a lot of time that you can use for more interesting things.

    • cubiclegeoff says:

      This assumes you have a landlord that cares and will actually make an effort to fix all of the problems.

      • I do. When anything big goes wrong, he’s right there. Just received a new fridge in fact.

        NYC tenants are pretty verbal about bad landlords. They complain to city agencies, TV Stations and if the landlord STILL doesn’t get the message, they’ll write big message posters in their front windows for all the world to see, like the ones I once saw in an apartment house on 96th Street. Paraphrasing,”Thanks for no heat, Mr Goldman, and all the icicles on my stove”…”Thanks for all the roaches and rats, Mr.Goldman. We’re training them for the circus.”

  20. Cheap Bastard says:

    why was my post deleted?

  21. Mike says:

    I believe renting videogames is a stupid idea for my situation. The games I like are usually played online and with other people. This doesn’t usually doesn’t work well if you are renting. If I like a videogame, I’d rather own it and play it for my entire life. There are cheap quality ps2 games that you can get also.

  22. eric says:

    There’s a lot to be said about ownership and the feelings accompanying it. It’s definitely worthwhile to sit down and break down the cost of renting vs buying.

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