Free model access is not a gift. It is a contract with someone else's rate limits, queueing policy, and maintenance schedule. Self-hosting inverts that contract: you own the latency, the GPU, and the 2 a.m. page. Most teams choose between the two by comparing price per token, and that is exactly how they end up with a production agent that stalls at 9:15 every morning.
Agent workloads are moving from demos to production, and the conversation has shifted from what models can do to what they cost to operate. The problem is that agent traffic does not look like chat traffic. A coding agent emits bursts of small requests — a tool call, a diff review, a short completion — separated by long idle gaps. That shape punishes endpoints optimized for steady throughput. A cost-per-token benchmark measures unit price, not whether the endpoint survives your burst pattern. The only honest test is to probe the endpoint the way your agent will actually call it.
Three questions decide the fit before any pricing math. First, what is your traffic shape: steady, bursty, or spiky? Second, what happens to your data when it crosses a third-party boundary? Third, how much operational slack do you have — can you babysit a self-hosted model, or does the endpoint need to be someone else's problem? Free hosted tiers win when the answers are steady, non-sensitive, and no-slack; self-hosting wins when they are spiky, sensitive, and you have the time.
