“Free” Upgrades Aren’t Always Free

A few years ago, I was stuck in a situation where I needed to rent a car. I had a bit of time before I had to rent the vehicle, so I shopped around.

I only needed the vehicle to drive myself around, so I honestly wasn’t really concerned about having a giant vehicle. So, I started shopping for small cars.

As anyone who has rented a car knows, the car rental company was happy to offer me a “free” upgrade to a larger sedan. The price with the rental company didn’t change at all, so it was tempting.

I started clicking through the online forms to sign up for the car rental when I realized I was making a mistake.

I thought about fuel.

So I looked up the fuel mileage of the larger sedans and the options averaged somewhere around 20 miles per gallon. On the other hand, the economy cars were clocking in between 30 and 35 miles per gallon.

I wasn’t planning on permanently owning this car. I just needed it for some short-term driving adding up to about 1,100 miles. Over the course of that trip, the difference between 20 miles per gallon and 35 miles per gallon is 23.6 gallons of gas, and with gas around $3.50 per gallon at the time, the cost difference is $82.50.

In truth, the “free” upgrade would cost me $82.50.

This phenomenon of “free” upgrades not really being free pops up all the time. Take apartment shopping, for instance.

It’s easy to compare apartments by comparing square footage to the cost of rent, but that’s not the full picture of what it will cost to live there. You might see a move from a 600 square foot apartment to an 800 square foot apartment for the same rent as a “free upgrade” but it’s likely not free at all.

What utilities will you need to cover? Electricity? Garbage? Water? Do you have easy access to mass transit? What about parking – are there extra parking costs? What about neighborhood safety? What about the length of the commute?

What about cell phones? Cell phone companies often offer “free upgrades” to smart phones. The “catch” there is that while the phone might be a free upgrade, the data plan usually isn’t a free upgrade. Instead, it’s a new bill that can easily add $20 or $50 a month to your cellular costs.

Whenever you’re comparing two major expenses, don’t get distracted by the initial price ever. Instead, slow down and consider the total cost. What expenses are you going to have as a result of that choice? What will all of those costs add up to?

The “free upgrade” sometimes isn’t free at all. Sometimes it will cost you quite a bit.

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