2009 Lamborghini Gallardo
Recently I paid almost $1,000 to drive a Ferrari and a Lamborghini as fast as I could around a racetrack for a total of about 10 minutes. It was one of the most financially responsible things I've done in a long time.
Your off-the-cuff reaction might be to think I've lost my marbles. Who would pay that much for anything? While the cost on a per-hour basis was astronomical, the outlay pales in comparison to actually owning one of these exotic cars. Instead of buying the car, I bought the experience. Besides, I could never afford the car, so I feel like I saved $299,000.
A recent American Express study found that a "rentail" mentality doesn't just apply to the finer things in life. Quoting from the study, "Cost-conscious young consumers aged 18-34, brought up in an era of online sharing and collaboration, are choosing to downsize and simplify their possessions, experiencing products and services rather than owning them."
Consider the growing number of car-sharing services like Zipcar and Autoshare: For young, urban professionals, owning a car is a very expensive proposition. Covering finance or lease payments, insurance, gas, maintenance and parking doesn't make much sense if your driving averages less than an hour a day. Renting a car that is readily available from a car-sharing service can be a practical, efficient solution.
Entertaining company? You can rent plates, silverware and crystal. Want to glam it up while out on the town? You can rent high-end purses and there are even long-term leasing options. Camping? Yep, you can rent all the gear you'll need. Heck, you can even borrow a spouse at rentawife.ca or hire-a-husband.ca.
Another bonus of the "rentail" trend is that it's green. Why acquire materials required for hobbies and sports if you're only going to partake in the activities once in a while? Perhaps you rent golf clubs five times a year. If it becomes a regular pastime, you are going to want to your own set. Some might argue that not only will it make more financial sense to buy your own set, but you'll get better consistency using the same equipment. The math might be break-even now, but unless you keep it up, you'll just find yourself with equipment taking up room in your home. And if you are only golfing five times a year, believe me, your high scores aren't due to your clubs.
The flipside to this discussion is that sometimes we rent things we should be purchasing. Your TV's digital box is a prime example: I noticed the model we rented went on sale at an electronics store for the equivalent of one year's rental cost, so we sent our rental unit back to the cable company.
Something else you should consider buying is a water heater. To buy your own, including installation, might run you $1,000, yet the latest door-knocker who came to my home seemed convinced a 15-year contract that would have me pay a total of more than $5,000 was a better option. I'm pretty sure I'm not going to go through a tank every three years.
So while more companies are specializing in rentals of products and experiences, remember to not only crunch the numbers but to take a hard look at the expected actual use of these items. You may find that while many things are better rented, some things are indeed better owned.
Preet Banerjee