I Ditched Paid AI APIs for Local Models — 3 Months of Real Numbers

Three months ago my API bill hit $41. Not huge, but I was just prototyping — paying per token to iterate on prompts felt like renting my own keyboard. So I moved the whole workflow to local models with Ollama. Cost since then: $0. Here's the honest version, including what got worse.

What I actually run

My machine: RTX 4070 (12GB VRAM), 32GB RAM. Nothing exotic.

ollama pull qwen2.5-coder:14b
ollama run qwen2.5-coder:14b

And since Ollama exposes an OpenAI-compatible endpoint, my existing code didn't change — just the base URL:

from openai import OpenAI

client = OpenAI(
    base_url="http://localhost:11434/v1",
    api_key="not-needed",
)

resp = client.chat.completions.create(
    model="qwen2.5-coder:14b",
    messages=[{"role": "user", "content": "Write a pytest fixture for a FastAPI app"}],
)
print(resp.choices[0].message.content)

The numbers after 90 days

	GPT API (paid)	Ollama local
Monthly cost	$28–41	$0
Requests/day (my usage)	~200	~200, unlimited
Latency (first token)	~0.8s	~1.5s (14B on 12GB VRAM)
Works offline	no	yes
Data leaves my machine	yes	no
Refactor quality (my scorecard)	9/10	7/10

What got worse (the part people skip)

• Long-context refactors are weaker. On a 40-file refactor, the local 14B model lost track of an interface change twice. The paid API didn't.
• You become your own ops team. Model updates, VRAM juggling, the occasional OOM at 2am.
• Cold start. First request after idle takes 20–30s to load the model into VRAM.

What got better

• I prototype recklessly now. 500-token system prompts, ten variations, no meter running.
• Client code stays on my machine. For one contract gig this wasn't optional.
• The 7B models (qwen2.5-coder:7b) are genuinely fast for autocomplete-style tasks — sub-second responses.

My current split: local for iteration and anything sensitive, paid API for the final big refactors. I pair Ollama with this free open-source coding assistant for the editor side: https://ly.cyberserval.tech/iIETXiF

Anyone else running a hybrid setup? Where do you draw the local-vs-API line?