Best computer buying/selling strategy?

February 14, 2008 12:59 PM

What's the best strategy for buying new laptops and selling old ones? I usually buy a new computer once every five years or so and then sell my old one. Say I spend $3000 for a new one and sell the old one for $300. Would I be better off buying a new one every year and selling the old one each year? In other words, would I get more for the old one that it would make up for the depreciation in waiting five years?

For my purposes, I'm talking about MacBook Pros probably.

I'm guessing that I wouldn't come out ahead, but what would the premium be per year to always have a (relatively) new laptop vs an old one most of the time.

To fully explain: which is better and why:

1: Buy new laptop for $3000ish and sell five-year old laptop for $300ish
2: Buy new laptop for $3000ish and sell it a year later for $??? Repeat every year or so. Would I be selling it for $1500? $2000? Less?

posted by moedym to computers & internet (17 comments total)

In case 1, you lose $2700 to laptop depreciation over five years.

Case 2 would only be better if you could lose less than $2700 over five years. You would buy four laptops in the time period you were buying one laptop before. So you would need to lose less than $675 per laptop. Do you think you can sell a used year-old MacBook Pro for more than $2325? I don't.

Of course, this doesn't consider many factors such as the increase in productivity you might get by buying a new computer (or decrease in productivity if you're the sort of person who wastes lots of time on his new toys).
posted by grouse at 1:10 PM on February 14, 2008 [1 favorite]

Macs tend to hold their value pretty well, so if you're really asking $300, that's probably too little. You can see prices for refurbs here and here.

I'm not a developer, designer, or gamer, so YMMdefinitelyV, but in my lifetime's experience with various Macs, there are never such huge leaps in hardware or firmware that you'd need a new laptop every year to keep up.

When I bought my powerbook four or five years ago, I bought it as a refurb (from the guys in the first link above), and while it was cheaper than a brand-new machine, it was only cheaper by about $500. Which certainly made a difference to me.
posted by rtha at 1:17 PM on February 14, 2008

I do the every year thing with MacBook Pros. I generally sell them for within $300 of what I pay for them. The trick is the RAM. I buy from Apple with the base amount of RAM, and then upgrade to the maximum from a 3rd party vendor. For example, with my current MacBook Pro shipped with 2 GB of RAM. I upgraded it to 4 GB. That cost me like $120. Apple charges $700 for the same upgrade. When I post it on Craigslist (which I will probably do very soon), I'll list it for $1900 or so, and advertise that the same machine on Apple.com is $2700+tax. There are plenty of people that absolutely don't want to hear about how easy it is to open up their laptop and upgrade the RAM. They just want to buy it ready to go. For them, it's a pretty solid deal.
posted by AaRdVarK at 1:21 PM on February 14, 2008 [2 favorites]

There's a terrible strategy. A high end laptop is slower than the cheapest laptop 18 months later.

My personal computer buying/upgrade strategy to get the most bang for the buck to is buy a replacement machine every 12-18 months. Five years nowadays is kinda crazy.

Buy a new middle or low end laptop, depending on your needs. Use it for 12-18 months. Sell it, buy another. Hell, I just saw a Dell Vostro 1500 for sale for $399. Thats practially sales tax for the 3,000 waste of money you bought.
posted by damn dirty ape at 1:26 PM on February 14, 2008

I do the same as Aardvark. Just buy edu discounted or refurb. I bought my MBP CD 1.83 around 2 years ago for $1800. I sold it last month for $1350 w/ 2GB of ram.
posted by mphuie at 1:28 PM on February 14, 2008

Computers lose about 40% of their value per year (based on retail prices)

You buy a computer for $3000, in subsequent years you'd probably get $1800, $1050, $650, $400, $250.

Realistically that means you'd take a $1200 hit per year on buying a new one. Over five years you're going to pay way more on your computer than if you bought one and kept it for 5 years.
posted by blue_beetle at 1:39 PM on February 14, 2008

The biggest hit from depreciation comes right at the beginning. You lose a lot of value in year 1 and not much in year 5. Why have more "year 1"s than you need to?
posted by nebulawindphone at 2:01 PM on February 14, 2008

As with pretty much anything, the best strategy depends on your goals.

One of my pals likes WoW. And he supports computers all day, so he doesn't want to do it when he comes home. And he likes the shiny things. So, every couple years, he buys the snazziest laptop available. He gives his old one to his wife. She gives her old one to, I dunno, her friend or somebody. Eventually, in theory, somebody gets a computer who didn't have one before. From where I'm standing, that's the biggest upside. And he gets to play the latest games, and impress his forum buddies. And if it breaks, Dell cross-ships him a new one. But none of this comes cheap.

Me, I'm a cheapskate, with no need for a lot of processing or graphic power. Plus I like fixing things. And I like computers, but I don't like the way they're manufactured from toxic chemicals in third-world countries not known for their sterling human rights records. Oh, and I'm not really crazy about this culture of consumption and waste and greed. So I buy secondhand hardware, sticking to brands known for durability, aiming for user-serviceability, standardized components, that kind of thing, and I use the stuff until it's literally unusable. And then I cannibalize it for parts.

You, well, you're probably somewhere in the middle.
posted by box at 2:03 PM on February 14, 2008 [1 favorite]

There's a terrible strategy. A high end laptop is slower than the cheapest laptop 18 months later.

That's ludicrous hyperbole. It's true you lose a lot of value very quickly going with high end, but my latest laptop is around a year old and is still slightly above mid-range now, and it wasn't even top-of-the-line-newest-hotshit when I originally got it (although it was high end).
posted by juv3nal at 3:04 PM on February 14, 2008

I don't know where you are, but if you're in Australia, and have a permanent job, you can salary-sacrifice one laptop per year (quite easily, presuming your HR department aren't idiots), which makes a one-year turnover entirely sensible if you don't mind the selling, and are in a highish tax bracket.
posted by pompomtom at 3:17 PM on February 14, 2008

It makes no sense at all to me to pay big bucks for high-end computing equipment, especially if you're doing any kind of regular replacement cycle. Buy one generations behind the bleeding edge, and over your machines' entire lifecycle you'll get 80% of bleeding edge performance for maybe 50% of the money.
posted by flabdablet at 3:39 PM on February 14, 2008

Oddly enough I just got a notice about this machine in my mail. For general computing, it's plenty spiffy, and oh so cheap.
posted by flabdablet at 3:42 PM on February 14, 2008

[A few comments removed. If you guys would like to try again without the sniping and sarcasm, go for it.]
posted by cortex at 5:45 PM on February 14, 2008

How productive are you with a new laptop?

With a 1 year old laptop?

With a 3 year old laptop?

With a 5 year old laptop?

If the cost of owning a laptop is the only thing driving your purchase, you have a toy. Let the value of having a laptop drive your decision.


The biggest hit from depreciation comes right at the beginning. You lose a lot of value in year 1 and not much in year 5. Why have more "year 1"s than you need to?

Not as much with macs. You can much more easily get away with 1-year replacement cycles with macs than you can with a PC. There is a long line of people waiting to buy a mac with a small discount. There is a much smaller line of people willing to buy a used PC laptop of any age at anything but a steep discount.
posted by b1tr0t at 6:12 PM on February 14, 2008

In general, it is a great question, but you pretty much sabatage the optimisation due to two stipulations: mac, and top of the line machine.

Macs maintain their resale value better than regular priced (aka overpriced) PCs, but they don't do as well as best possible price PCs. High end machines always lose value much faster than mid range or discount gear.

The way to get performance/dollar without knowing much about computers is to follow online forums like fatwallet or redflagdeals, and jump on the best Dell one day only special you find. That machine will probably be resalable in a year for ~80% of it's purchase price. Hell, sometimes that machine is resalable the next day for a profit :P
posted by Chuckles at 9:44 PM on February 14, 2008

Thanks for all the thoughtful replies. I ask about Macs cuz that's what I will always use, but it's good to hear opinions about the timing. It's not all about cost, I know I won't totally break even, but I'd like to minimize costs and maximize cool toy time.

So it sounds like maybe it's best to get a very good, not cutting edge refurb/edu MacBookPro or the like, beef up the RAM through a 3rd party vendor and sell it again in 18 months or so. Is that a sort of rough consensus? That way you have a very usable, almost top of the line computer that you didn't over-pay for but sell it before it depreciates too much.
posted by moedym at 5:40 PM on February 15, 2008

The calculation is not as simple as some are making it out to be. It depends on how quickly the basic design of the computer becomes obsolete. A five year old G4-based Powerbook is a doorstop if you need to use current software that requires an Intel machine. Apparently, that's not the case, but you definitely want to sell before major new design changes emerge -- processor, especially.

You also need to figure out the economic value of the productivity cost of running an older machine. In my universe, using a more-than-two-year-old Mac costs money every day I do it by comparison to the speed (and software compatibility) of a new machine. So for people in my universe, buying a new machine every year is the most economically rational thing to do. The question of resale value is a trivial concern vs. the day-to-day amortization of productivity costs.

Penny wise can be pound foolish, as they say.
posted by fourcheesemac at 8:55 PM on February 15, 2008