Driven By a Little Old Nerd on Sundays
Buying used computers can make sense
Ever hear of Synera computers? Probably one of those off-brand, mail-order places that advertise in the back pages of computer magazines, right? Hardly. Synera is a line of PCs made by Packard Bell, one of the nation's biggest PC makers, whose label is seen in almost every major computer store. But there's a big distinction: Synera models have been assembled from parts salvaged from returned Packard Bells and are sold by mail through the company's PC Factory Outlet. One recent offering was a modestly powered Pentium 133 with 16 megabytes of memory, a 1.6-gigabyte hard drive, an eight-speed CD-ROM, a 33.6-kbps modem, and a suite of software. Its price was a very affordable $699, though with a slim 90-day warranty and no monitor.
Buying secondhand equipment saves cash and eases a bit the rapid loss in value that can occur within months of buying a PC. Rather than take your chances with as-is used equipment sold through classified ads or at swap meets, buying computers and peripherals that have been refurbished--often by the original manufacturer--is the safer bet. Buying refurbished often means getting models that are still being sold new or have only recently been discontinued. "It's gone through the factory twice," a spokeswoman for Jem Computers, a dealer in refurbished items, enthuses, perhaps a bit too much.
One disadvantage is that the discounts on refurbished items may be modest--perhaps 10 to 20 percent on currently produced items and somewhat more on equipment no longer being made. Normally, used computer equipment might sell at 50 to 60 percent of original cost on newer items, perhaps 20 to 30 percent on items two years old.
When buying older used equipment, you can get a feel for its value by checking the Orion Blue Book of values for nonrefurbished used computers and peripherals, published by Orion Research in Scottsdale, Ariz. It's like the guides for used cars but not as widely available. And at $104 per quarterly volume, the book isn't practical for most consumers. A number of libraries have it or may be able to get a copy for you. Dealers also often have the book, but they may or may not be willing to let you take a peek.
Unlike used cars, what dates PCs isn't generally wear and tear but technical advances. So be careful about getting an outdated machine. If your needs are limited, an older PC with less processing power, limited multimedia capabilities, and less World Wide Web browsing speed may suffice. But most home users will be best served by buying something less than 18 months out of date. Unless you're PC savvy and fully recognize the limits of what you're buying, there's a strong chance you'll end up disappointed with older models. Many popular games and the latest programs require speedy Pentium-class PCs, and you'll end up regretting the absence of the latest video cards, big hard-drive space, and other upgrades that newer models have.
Almost all the major manufacturers sell refurbished machines and sometimes never-used discontinued models. Compaq's 20,000-square-foot Compaq Works outlet in Houston occupies part of an old warehouse club store and serves a devoted local following and out-of-towners by mail. People itching for a Compaq Pentium 133-MHz computer with a 14-inch monitor could recently get one for $798, about a third off its new price six months ago. Mail-order giant Dell Computer runs an outlet store in Austin, Texas, called Dell Factory Outlet and does a steady mail-order business. It primarily sells current models that have been returned by customers under Dell's 30-day return policy. The units are fixed up as necessary and carry a three-year warranty, the same as new units. Recently a top-end Pentium II 300 with a new 17-inch monitor was selling for $2,337, a $251 discount.
Gateway 2000 sells refurbished notebooks and desktops at three of its Gateway Country stores in South Dakota and Kansas and also by phone. IBM's Internet-based Refurbished PC Warehouse sells current and older models.
Buying refurbished means taking what you can get because the stock changes constantly. If you're interested in a specific brand, ask the company if it sells refurbished items and what's available.
Refurbished and discontinued models are also available through dealers. Mail-order-house Damark devotes a section of its catalogs of electronic goods to factory-serviced computer items. Recently included were a low-end Canon color inkjet printer for $120 and an Iomega external Zip drive for $100.
Another specialist in refurbished and clearance items is Surplus Direct. Its recent flier, for example, included scanners and digital cameras in addition to other typical PC fare. Jem Computers adds a touch of auction fever by putting an assortment of refurbished products into a Web site "basement," where prices drop 10 percent a week until the stock is cleared out. Jem handles equipment from such firms as Hewlett-Packard, Toshiba, AST, and others. A desirable IBM Thinkpad laptop with a Pentium 166 MMX processor was recently being sold at $3,599--about $1,000 below the model's current new price--and scheduled to drop 10 percent a week until all five of the units were gone.
Traditional retail stores are tapping into the demand, too. Some CompUSA outlets occasionally have refurbished PCs on sale. The Computer Renaissance chain, which assembles custom-made new computers at its franchise stores, makes a specialty out of also selling refurbished and used computers and peripherals. There are now some 170 U.S. and Canadian stores in the chain and an additional 80 or so are scheduled to open within the next year. These outlets will also buy old gear or take it in trade. If you have access to the Web, you can go to the firm's site at [http://www.cr1.com] to check the location of stores. As retail and factory outlets proliferate, it can only get easier to buy reliable secondhand machines.
Dropping values
Computers can work fine a long time, but their worth soon tanks
YEAR SOLD MODEL NEW PRICE USED PRICE
DESKTOPS
1996 Micron Pentium 200 with 15" monitor $2,890 $1,460
1995 Gateway Pentium 100 with 15" monitor $2,390 $635
1993 IBM 486-SX/33 with 14" monitor $2,050 $295
LAPTOPS
1996 Toshiba Pentium 90 with CD-ROM $4,390 $955
1995 Texas Instruments 486-DX2/50 $3,990 $580
Note: Used prices are estimates and will vary depending on precise configuration, warranty, and rapidly fluctuating market conditions.
Source: Orion Research Corp.
Where to find computer deals Most sellers of refurbished computer gear and excess inventory also deal via the Internet. Go to the U.S. News site at usnews.com for direct links to their Web sites. Several have factory outlets. Here's how to reach many of the sellers by phone:
MANUFACTURERS: Packard Bell-NEC: 888-474-6772; PC Factory Outlet store in Sacramento, Calif. IBM: 800-426-5440; no store, but its Refurbished PC Warehouse is on the Web Compaq: 888-215-8864; Compaq Works outlet store in Houston Gateway 2000: 800-846-3614; also at Gateway Country Stores in North Sioux City and Sioux Falls, S.D., and Overland Park, Kan. Dell Computer: 888-274-4366; outlet store in Austin, Texas Micron Electronics: 800-730-0932; outlet stores in Boise, Idaho; Salt Lake City, and Minneapolis Acer: 800-767-0334; outlet store in San Jose, Calif.
RETAILERS: Damark: 800-729-9000 Surplus Direct: 800-753-7877 Jem Computers: 800-536-2037 To reach Orion Research, publisher of the Blue Book of used computer values: 602-951-1114 or E-mail orion@bluebook.com
This story appears in the November 24, 1997 print edition of U.S. News & World Report.