Break-even is useful when one option costs more now but less later. It becomes misleading when savings are treated as certain, periods are mixed or maintenance and replacement are omitted.
Match the period
Put both options on the same weekly, monthly or annual basis. Recurring saving is current cost minus alternative cost; divide upfront cost by a positive recurring saving.
Include switching friction
Add installation, cancellation, training, downtime and resale value where relevant. State whether tax, financing and opportunity cost are included.
Run a range
Calculate low, expected and high savings, then compare the break-even point with the period you expect to keep the option. A result beyond the ownership period does not support the switch under that scenario.
Worked example
Scroll the table horizontally on small screens to see every column.
| Upfront cost | Current monthly cost | New monthly cost | Monthly saving | Break-even |
|---|---|---|---|---|
| 900 | 160 | 100 | 60 | 15 months |
If the monthly saving falls to 40, break-even moves to 22.5 months; show both scenarios.
Sources and checks
Examples are illustrative and can be checked with the linked tools. Read each tool’s assumptions before applying its result. How we verify methods.