Finance⏱ 4 min read
Cost Per Use: The Smarter Way to Compare Purchases
A £300 jacket worn 200 times costs less per wear than a £80 jacket worn 15 times. Cost per use reframes every purchase decision and explains why cheap things are often the most expensive.
Cost per use is one of the most useful mental models in personal finance. It shifts evaluation from the purchase price (a one-time event) to the ongoing cost of the thing you now own — and consistently reveals that "expensive" and "cheap" are often the wrong labels.
The Formula
Cost Per Use = Total Cost / Number of Uses
Total cost should include:
Purchase price + maintenance + repairs - resale value
Example: Running shoes
Budget shoes: £55, last 400km before worn out
Premium shoes: £140, last 800km
Cost per km: £55/400 = £0.14/km vs £140/800 = £0.18/km
Budget shoes cheaper per km in this case.
But if premium shoes prevent an injury that causes 8 weeks off:
Lost training cost (intangible) + physio fees (tangible)
could easily exceed the £85 price difference.
Worked Examples Across Categories
ItemPriceUsesCost/Use
Cheap knife (lasts 2yr)£15730 meals£0.021
Quality chef's knife (lasts 20yr)£1207,300 meals£0.016
Fast-fashion jeans (worn 10x)£2510 wears£2.50
Quality jeans (worn 150x)£90150 wears£0.60
Gym membership unused£420/yr5 visits£84.00
Gym membership used 3x/wk£420/yr156 visits£2.69
Applying Cost Per Use to Big Purchases
Car comparison:
Car A: £18,000, kept 8 years, driven 120,000km
Cost per km: £18,000 / 120,000 = £0.15/km
Car B: £32,000, kept 12 years, driven 200,000km
Cost per km: £32,000 / 200,000 = £0.16/km
Similar cost per km despite very different prices —
because the expensive car is used far more.
(Don't forget running costs: fuel, insurance, servicing —
these often dwarf depreciation for high-mileage cars)
When Cost Per Use Misleads
Cost per use is most useful when you have reliable estimates of actual use — which requires honest self-assessment. The four traps:
- Optimistic use estimates: Buying a bread maker because "I'll use it weekly" when you use it twice. The purchase justification creates a fictional future self who uses things more than the real you.
- Ignoring alternatives: If a coffee machine costs 20p per cup but you'd be happy buying coffee at £2/cup twice a week, the machine may never recoup its cost.
- Sunk cost continuation: Using something past its useful life to justify the original purchase.
- Quality ceiling: Beyond a certain quality level, further price increases buy diminishing marginal quality gains.