Spring autowired beans vs created instances

When I see typical spring web application, all the instances are created and injected by spring, and we use methods by passing some arguments. Majority of these instances are singleton and don't hold any state with it.

I may be wrong, but this approach looks more procedure oriented than object oriented for me. I assume good design should utilize both spring manged beans along with instances created by user which hold some state and with methods to expose some behaviour.

Is there a rule of thumb to decide which one we should use(injected singleton beans or manually created instance) in a context? Also is there a performance impact if we excessively used short lived instances per request received? Would like to know proper way to design my classes in this scenario.

Depends of your need, Singleton its used by default for Spring and its used when you don't need have the same state in the application, but if for any reason you need a instance based on the beans of spring you can change the scope and create a bean based on Prototype instead of Singleton

And of course you don't need use the bean for DAO objects, just pass it where is needed as you saw in other sites

By other way, the performance obviously can be affected if you create a lot of objects based on Prototype pattern, because you create new object every time (For our luck the garbage collector cleans that so, you don't should be too afraid by now)

And for more information about that: https://docs.spring.io/spring-framework/docs/3.0.0.M4/reference/html/ch03s05.html#beans-factory-scopes-prototype