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Sometimes Cheaper is Better

Written by Nickel - 7 Comments

Back in early July, I wrote an article called “Cheap is Not Necessarily Frugal.” In it, I argued that you’re often better off in the long run if you opt for a more expensive product or service rather than skimping and trying to save a few bucks.

While I still believe that this is often the case, I was recently reminded that sometimes cheaper truly is better…

Park, ride, and save

On a recent trip out of town, I shared a ride to the airport with a co-worker. At our airport, you have three options when it comes to parking: Daily, Economy, and Park-and-Ride. In the past, I’ve always opted for Economy because: (1) it costs about half as much as Daily, and (2) it doesn’t require a shuttle ride like Park-and-Ride, which is by far the cheapest option. As we approached the airport this time, however, my compatriot turned off into the Park-and-Ride lot.

While this wouldn’t have been my first choice, I wasn’t about to complain — after all, I wasn’t driving. Much to my surprise, we were out of the car and into the airport in record time. While I’ve had terrible experiences with Park-and-Ride at other airports in the past, these lots were managed in much the same way that Disney handles their parking. They had signs pointing you to the currently open lot, and there was a shuttle sitting right there in the row in which we parked.

Upon boarding, we were handed a color-coded ticket that would direct the driver back to our car, and we were dropped off curbside just outside our airline’s check-in counter. And when we returned, the driver dropped us off alongside the trunk of our car. All in all, this was far more convenient that the Economy lot — in fact, it was arguably better than the Daily lot. And yet, we paid just a fraction of the price.

Lesson learned

The lesson here, which runs far deeper than optimal parking strategies, is that you shouldn’t assume that a higher price necessarily signals a better or more convenient product or service. While it’s often worth paying extra for quality, it’s important to be sure that you’re actually getting more for your money. In this case, the airport was simply charging a premium for the perception of convenience.

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Published on September 9th, 2008 - 7 Comments
Filed under: Frugality, Travel

About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

7 Responses to “Sometimes Cheaper is Better”

1
Ron@TheWisdomJournal Says:
September 9th, 2008 at 9:21 am
We tend to fall back to the position that more expensive is better when we lack information (ref: Influence, the Psychology of Persuasion by Robert Cialdini).
2
Sam @ Fix My Personal Finance Says:
September 9th, 2008 at 11:50 am
Interesting post. Well they say good things in life don’t come cheap. That includes all that “extra” convenience in everything we buy, be it a product or service.
3
nickel Says:
September 9th, 2008 at 12:11 pm
Sam: Right, but my point here was that the more expensive options were *not* more convenient in this case. Of course, this will vary from case to case, but it’s always worth exploring. Your statement of “good things in life don’t come cheap” is exactly the sort of thing that I was saying we should be wary of. While paying more for quality is generally a good idea, simply assuming that more = better might not be the best way forward.
4
MultifolDream$ Says:
September 9th, 2008 at 12:36 pm
People are creatures of habit. Think about how often we do not explore the unknown options just because we are ok with what we get now.
And I agree – higher price doesn’t always meen better services or porduct.
5
Chris Holdheide Says:
September 9th, 2008 at 8:52 pm
Sometimes cheaper is better. However this is something we should learn to do more of. Evaluate the options and don’t just go with what we think may be easiest option.
The thing is though a lot of Americans have sunk into this belief that if I pay more I will get more than the status quo. Not always true.
Great Post.
6
Jon @capitalistmven.com Says:
September 10th, 2008 at 10:18 am
I had a similar experience at MHT in New Hampshire. They have a parking garage at the top price level and economy lots at the lower price level. There is also a hotel (Highlander Inn) nearby that offers “park and ride” service. The Highlander is not much cheaper $8 per calender day vs. $10 per 24 hours at the economy lot, but it sure is convenient. They pick you up right at your car and take you back right to your car, the shuttles come on-demand instead of waiting at a shuttle stop. And the best service, in the winter they dig you out of your spot and clear your window if it snows! That’s the kind of service you just don’t get at the airport lots.
7
Lise Says:
September 22nd, 2008 at 1:24 pm
*nod* I too need to look into park-and-ride services – the economy lot at Boston Logan is not very economical at all, and I often have to use that airport when I travel.

Interestingly, I wrote an article with a similar theme (but focusing on a different kind of cheap item) a few months ago: When Is Buying Cheap Better Than Buying Quality?

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