>I would gladly pay $X/mo for one appliance in perpetuity that I never have to think about it again.

That's a very common model. For example, our business didn't buy a printer/copier - rather it is pay-per-use and ostensibly under perpetual warranty while we're paying. If something breaks, a tech comes in and fixes it or replaces the unit. Coffee machines and commercial dishwashers are another example. All these can be leased and serviced for a monthly cost and typically don't require any up-front capital. It's very convenient but more expensive than an outright purchase.

This model works well for commercial enterprises, but it just isn't worth for consumers. It's like car leases - bad deal for consumers, but attractive due to flexibility for businesses.

That's the thing tho. Make it cheap enough to not be more expensive. Make it a quality product so there's little maintenance cost. Don't replace it every 10years and there's less overheard across the board.

> Make it cheap enough to not be more expensive

Are you expecting it to be cheaper to rent than buy in the long term? That's pretty impossible since the person you are renting from has to buy at least 1 and provide additional services. It doesnt matter how cheap you make it; x<x+1 for all x no matter how small x is.

I think there's a few possible angles here.

* Cheap and Expensive as a subjective thing. Paying a $10 per month fridge bill in perpetuity may feel less uncomfortable than the sudden expense of a $700 fridge every 8 years, even though the latter is cheaper.

* A service can take some of the bad-decision factors out of it. Many appliances are panic-bought when the previous unit fails, rather than waiting for the price to bottom out. A predictable lease price and service organization avoids that risk. It might not be as cheap as the cheapest unit on the best day, but it's competitive with a mid-line product.

* The rental service product could benefit from economies of scale and standardization that direct-to-consumer brands don't offer. Whirlpool sells a few dozen different 25-cubic-foot fridges, with constant model churn. Any given model may only have a total run of a couple thousand units. Fridge-as-a-service may only offer one, and offer it for 10 years, allowing slower amortization of engineering costs and less expensive service/spares management.

* A structured end-of-life program could bring down the cost of leasing. After five years, they swap out the old fridge, but then they can refurbish it and either return it to the lease pool or resell it in a less ad-hoc manner than listing individual units on Craigslist.

This model does not work very well for consumers. It really does raise the prices of goods and drains consumer income and forces an opportunity cost of not investing in retirement, and not paying down mortgage faster (for example). It's almost always better for consumers to lay out the capital up-front and own the item.

For businesses, the calculation is different. Maintaining appliances, or cars, or coffee machines, means redirecting resources (that you're already paying for) away from building widgets to something that isn't your core competency. Plus you get a bit of a discount because you're working with pre-tax capital.

Again, it's why car leases make sense for business, but are a terrible deal for consumers.

Paying $10-20/mo for a fridge is not going to significantly impact retirement savings over the long term. The alternative is putting that little bit extra into savings every month to buy the next fridge when it breaks. It balances out.

>Paying $10-20/mo for a fridge is not going to significantly impact retirement savings over the long term.

First, your numbers are way too low. Nobody is going to lease you, for example, a $2500 fridge where the capital cost will take 20 years to be paid back, especially since cost of service, depreciation of asset, and profit, needs to be priced in as well. You'd be looking at something on the order of $50/mo.

The opportunity cost of putting $50/mo into a tax sheltered investment account (with a reasonable 6% return) is around $15,000 after 15 years. In other words, you paid $15k for a fridge that retails for $2500.

> The alternative is putting that little bit extra into savings every month to buy the next fridge when it breaks. It balances out.

Huh? If you're overpaying for an appliance, you don't really 'fix that' by saving more.

But your fridge is not the only thing you own. Presumably you would do this for all your appliances.

Keep in mind, that $20 a month for 40 years at 4% interest is $23000. If you add in more appliances this scheme can add up to be surprisingly expensive.

Exactly! It's what I see of the spacex model - if you standardize one model and do it well, you find the weak points and either reinforce them or improve them.

The problem is consumer electronics break way more often than business not because they are not designed for heavy duty, but because some consumers are likely to misuse / misplace / misconfiged it. Since the price of your monthly payment is ultimately determined by the percentage of failure. This will drive up the total price, and hence it wont be cheap.

I think it will work well for Rental Apartments with property makers where large quantities are purchased and with design / placement standardise. And those price are included in rent or management fees.

Water heaters and furnaces can be leased instead of purchased, for a few dollars a month. (But it's more expensive in the long run.)

What's different about a furnace vs a fridge or dishwasher?

Furnace longevity depends on how good the owner is at maintaining clean filters, and water heaters depend on water quality. I'd find it difficult for either of those to be offered as-a-service at a reasonable price considering the aforementioned volatility versus just selling them since they're not that expensive in the first place.

Yes but in that case it would be in the interest of the leaser to make the product be as easily maintainable as possible.

I just bought a dishwasher and the whole tub seems to be stainless steel. You just have to look at the higher end ones I guess. This one was a Bosch 500 series one.

> ... it would last a lot longer ...

But they can make more money if you buy a new one every 8 years instead of every 10.

But "they" can make more money if they sell a better product than their competitors for the same price.

There's no monopoly on dishwashers and other appliances. People simply choose to save money and go with cheaper items, or they can't afford ones that come with a 10 year warranty. Or maybe they don't exist. I know miele products exist, but not everyone wants to spring for Miele or Speed Queen washers or other higher quality builds that offer longer warranties.

I know I'd rather save $1,000 or more, invest it, and take my chances with an appliance from Costco since I can get it with a 4 year warranty anyway. If it breaks after 4 years, I'll get a new one. Over the past 10 years, I haven't experienced any appliances breaking.