Cost of Ownership: Why Paying More Upfront Can Save You Money in the Long Run

The cost per month of ownership feels like a great metric that shifts consumer mindset - the longer you own something, the more you save. Seems obvious, but most people don't think that way.

With the ExitReview platform, we can fight planned obsolescence and help people find the most durable products in the world. In addition, this newly introduced metric could help save money. The cost of ownership is a huge concept (a well known metric for cars), explained well in this article:

"Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet."

How to calculate the cost of ownership?

A very simple first version of the calculation could look like this:

if warranty = lifetime, then price/expected lifetime
if warranty > average lifespan, then price/warranty
if warranty < average lifespan, then price/average years owned

Of course, estimating the expected lifespan of a product is very difficult and depends on many factors like frequency of usage, type of use, maintenance etc. As a start, we can do an estimation of the expected lifetime for each category. Once we collected enough data and reviews, we will be able to calculate a more accurate value for each type of product.

Let me know what you think!