Redbox has become a very popular option for renting movies at the low cost of $1.20 a night for DVDs and $1.50 a night for blu-rays (before tax). In fact,
Redbox is pretty much the only way we rent movies now! We only rent movies when we are going to watch them later in the day and we always return them the very next day so we are only charged for one day. Even though we only keep the movie for one day there are additional expenses we really should consider when renting a movie from Redbox.
You Pay More Than Just the Rental Fee to Use Redbox
Most people consider the cost of a transaction as just the money that gets charged to their credit card or the money that comes out of their bank account. That is not the case though. You really need to consider all of the costs to complete the transaction from getting to the Redbox machine to getting the movie back.
Getting To and From Redbox
The biggest cost for us, other than the movie rental, is getting to and from Redbox. The closest Redbox is two miles from our house. They don’t always have the movie we want so sometimes we have to go four miles to the next nearest Redbox. Of course, we don’t just drive one way, you have to drive there and back so that means we drive 4 to 8 miles to rent each Redbox movie. We also have to return the Redbox rental which kicks us up to 8 to 16 miles driven for a one night Redbox movie rental.
Now that I know how far I have to drive to rent a Redbox movie I have to assign a cost to each mile. There are two main ways to do this in my opinion. The first is just fuel costs and the second is a fully loaded mileage rate that includes depreciation, maintenance items, insurance etc.
If I just want to use fuel cost I need to calculate how much money gas costs per mile. I know my car gets 30 miles to the gallon in the city and right now gas costs about $3.50 a gallon where I live. I take $3.50 and divide by 30 miles to get a cost of 11.7 cents per mile. So, for the nearest Redbox I pay $0.94 cents in gas for each one night rental and for the next closest Redbox I pay $1.87 in gas for each one night rental.
If I want to use a fully loaded mileage rate I defer to the IRS mileage reimbursement rate of 55.5 cents per mile. This is pretty close to accurate for most cars and just in case you were wondering you don’t make money off of mileage reimbursement. So for the nearest Redbox I pay $4.44 in vehicle costs and for the next nearest Redbox I pay $8.88 in vehicle costs if I use this method… ouch.
Redbox Doesn’t Seem so Cheap Now…
The total cost for a one night Redbox rental including gas or full vehicle charges varies anywhere from two to eight times the one night rental cost for me. Of course this assumes that you drive to and from the Redbox machine from your home to both pick up and return the rental and don’t run any other errands when you’re out.
There Is a Way to Avoid Gas Costs
You can avoid the gas costs and vehicle charges by simply picking the movie up when you are out running other errands. Depending on your situation it might make sense to hold on to the movie an extra night rather than making a special trip just to return it. These Redbox machines are actually close enough for us that we could ride our bikes there if we wanted to or take a walk. We normally drive though.
Will This Deter Me from Renting Redbox Movies?
Nope, not one bit! We normally only pick up movies when we’re on our way to or from somewhere. There are quite a few Redbox locations directly on my way to and from work and there are many locations on our way to many of the errands we normally run. After this analysis though we might hold on to a movie one more night rather than paying for gas to make a trip solely to return the movie.
Do you rent movies from Redbox? Had you ever thought to consider the gas and vehicle costs or do you only pick up movies when you are already out running errands?
Photo by Valerie Everett