Repair or Replace?


How do you decide whether to repair or replace your computer.  The general rule for appliances is that if it costs more than 2/3 of the cost to purchase a new one, you should purchase new.  How do you figure the cost of the new computer?  You must figure the cost from the seller (I am using an example of a Dell with features similar to my own older computer)  Dell is selling this computer for about $700.  You must also figure the cost to backup your personal data and install it properly on the new computer.  This could be in the $100-$150 range or higher depending on the amount of data and where it is located.  So, let's now call it an $800 dollar computer.  There is also the cost of installing your own software, security software, setting up email, adjusting preferences, etc.  Let's just add on another $100 for that.  These are just estimates after all!  So the actual cost of the computer is $900 and 2/3 of that would be $600.  So you could spend up to $600 on that old desktop computer before it might be time to replace it with a new one.  You also might look at it another way:  what is my old computer worth?  Old computers aren't worth much to anyone else, but to you they are worth what it would cost you to replace it.

Now there are exceptions to every rule.  It often does not make economic sense to spend $600 because you might be replacing all the major parts and still have 1 or 2 parts which might fail imminently   So let's drop the cost to $300.  That would be 1/3 the cost of the new computer.  For  perhaps $300 (I am including parts and labor in these estimates), you could have your hard drive replaced and everything reloaded and reset.  For perhaps $150 or less, you could have your power supply replaced, or your video card.  For $100 or less you might be able to add more memory.   You get the idea:  Spend more than $300 on that old computer and it might be a waste of money when the next thing fails.

When we recommend a new computer, we are doing a quick economic analysis of your old computer.  The same sort of analysis that I performed in the paragraph above.  We also consider other reasons to replace a computer, which have little to do with economics.  The first reason is that your computer may not be able to be upgraded because of limitations built into the computer.  Many low-end computers have a memory limitation.  In that case, there is nothing to do but buy a new one.  The other instance is where software or hardware that you need will not work or not work well with your old computer because of its limitations.  This happens most frequently because of a global hardware change such as when computers changed from parallel ports to USB, or because of an underpowered processor (some programs will not work with low-end processors). 

If the repair or replace dilemma still puzzles you, please contact me and I can give you an analysis based on your situation.

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