Take the case of my car. I own a 2008 Honda Civic which I bought new and financed for 4 years. Which means it was fully paid for in 2012. Total cost including financing, , new tires, insurance and maintenance is about 1 million Php spread over those 4 years and excluding only gasoline expenses. I have now been using it for 7 years which comes out to about 11,900 pesos a month of cost of ownership. I do have the means of buying a new car (in cash as I did not stop "paying" for the car mortgage) but have found the car that i own immensely reliable and very practical as it looks and feels new. The manual shift "snicks" when you change gears, the doors close with a satisfying "thunk", and the engine revs enthusiastically when I (on the rare times when there's a free stretch of road) I stamp on the gas pedal. I think that what even prevents me from buying a new car is the thought of having to shell out money and losing the opportunity to invest more in bonds or stocks (or even pay off more of my mortgages).
There is some pressure to upgrade and buy a replacement though. Co workers ask me when I will buy that new Subaru that I've always admired. My family sometimes gets visitors and needs a few more seats for roadtrips. I myself think. I imagine myself driving around in a more comfortable and flashier vehicle. But then I stop and appreciate the fact that I already own something immensely reliable and a car that will last me many more years to come. In fact, I aim to bring down the cost of ownership to about 7,000 a month which means I plan to own this car for at least 4 years or more. Coupled with its resell value (of maybe 300k at that time), I would have squeezed a lot of value from that car.
I have been doing the same for the other items my family owns. We look to reliability, and total cost of ownership when buying our stuff. When we bought a coffee maker for example, we chose the brand Krupps over the Imarflex appliance even if it was almost double the initial cost. We knew based on consumer reviews that the Krupps would outlast the other appliance by a factor of 3 hence bringing down total cost of ownership over the course of 8 years to half that of the Imarflex appliance.
We plan to apply the same thought process to any future processes including shoes, a new computer we are eyeing, mobile phones, and another house we are building as my retirement home.
How about you? Do you buy due to initial cost or do you consider total cost of ownership?