I have a problem I've been thinking about on and off for a while. When should you stop renting something and buy it instead?
The situation in which I am confronted with this is currently when I play badminton. At the place where I play it costs 20 SEK to rent a racket. But you can buy a fair-quality racket for around 200 SEK.
When you start playing you should obviously rent because you don't know if you're going to keep playing, but after how many times should you stop renting and just buy a racket?
If you play 10 times you've spent just as much money on renting as if you would have bought a racket on day 1. The cost of the racket is then 200% of the buying price.
I don't think you should wait 10 rounds of play before you buy, because you can be fairly sure you are going to play more than 10 times before you've played 10 times. But I'm not sure where to draw the limit. I think after about 5 times I'm pretty sure I'm going to play 10 times too. So then cost of the racket is 150% of the buying price.
On the other hand, if you buy the racket right away and not play 10 times, you've only spent 100% of the buying price but the money might be wasted. If you only play twice and bought the racket right away, you've wasted 80% of the cost. What's better: Wasting some of the cost or adding to the cost?
Obviously where you draw the line varies on situation and the amount of money involved, but my question is: How do you calculate where to draw the line?
I think that when the cost is somewhere between 150-200% of the buying price it's the right time to buy. But how do I calculate exactly where the right place is? Leave your thoughts in the comments!
Update: I just found out a fair-quality racket cost more than 200, but my question remains valid.
