I would nearly always buy on lowest price, but service is important too, so...
To analyze this, first of all, I will lay aside the really expensive registrars and also the really crappy services, both of which I would simply avoid, though others may have their reasons for choosing such services, I can see no point in paying 10 or 20 times the going rate for a domain, and neither can i see any point in saving mere pennies per year while sacrificing a decent registrar interface.
So aside from those providers my reasons for paying more/less within the remainder of the playing field in my opinion would go like this:
The two important things for me are A) quality/style/structure/capability etc of the domains control panel and B) provider support system. If I get a high quality control panel for my domains which has a fair bit of capability and this is backed up with quality support plus a decent help/knowledge base/community then I'd consider that worth extra money, how much really depends on how much time a person spends working with the domains and the capabilities they require ( dns zone, push etc )
That's how it should work ! But I have to tell you that in my experience the cheaper providers often paradoxically give more in this regard, which is why I tend to just buy on price in the end, even though I would still pay more if I had to.