Two appliances can look similar on a showroom floor and have very different costs over five years. The purchase price is only the starting point. Electricity, water, upkeep, repairs and resale value can change which option represents better value.
What total ownership cost means
Use the same period for each appliance. If you plan to own one washing machine for five years and another for eight, compare an equivalent time frame or convert the result to a cost per year. Estimates are most useful when the assumptions are visible.
Worked example in rand
Suppose Appliance A costs R8,000 upfront and Appliance B costs R10,000. Both have the same delivery cost, so we'll leave it out of this comparison. Over five years, assume the following:
| Cost | Appliance A | Appliance B |
|---|---|---|
| Purchase | R8,000 | R10,000 |
| Electricity and other running costs per year | R1,800 | R1,000 |
| Maintenance per year | R400 | R250 |
| Resale after five years | R1,000 | R1,500 |
| Five-year total | R18,000 | R14,750 |
Despite costing R2,000 more at the start, Appliance B is R3,250 cheaper on these illustrative assumptions. This is not a claim about any real product or manufacturer.
How to make your estimates better
- Running costs: Use expected consumption from a product label where available and multiply it by your local electricity or water tariff and realistic usage.
- Maintenance: Allow for filters, cleaning materials, servicing and likely repairs.
- Lifespan: Be cautious with warranties as a substitute for expected lifespan.
- Resale: Use a conservative estimate. Some appliances have little resale value.
- Time horizon: If you expect to move soon, five-year ownership may not be realistic.
What the simple model does not cover
A simple cash-total calculation does not automatically account for financing interest, future tariff increases, inflation or the time value of money. You can include expected increases in an average recurring-cost estimate, but don't mistake it for a precise prediction. Qualities such as reliability, noise, repairability and accessibility may outweigh a small projected saving.
Compare before you buy
Write down the costs you can estimate, keep unknowns conservative and vary the assumptions. If the conclusion changes with a small adjustment, neither option has a decisive cost advantage.