Last Year's Hot Computer, This Year's Cool Price

In the race against time and technology when buying a computer, there are sprinters and there are joggers.

Sprinters rush to the leading-edge of technology, buy the latest, fastest computer, then use it until the machine is obsolete, which doesn't take long.

If they're really thrifty, and patient, they may wait five years before rushing to buy the next hot machine.

Joggers, on the other hand, are content to lag behind. They buy older technology at big discounts. If they're really keen on keeping up with new software, they might upgrade every other year with a discontinued computer.

Most computer buyers are sprinters. But a growing number are taking up jogging, saving megabytes of money in the process.

Here's the reason. The typical new computer loses half its value in a year, industry retailers say.

"The reality is that in a couple of years, they're going to be obsolete anyway," says John Hastings, president of American Computer Exchange, a used computer broker in Atlanta, Ga. "So the question is: How much money do you want to lose?"

A new family desktop costs $1,500 to $2,000. Mr. Hastings' company sells used computers for an average of $500. True, they're less powerful and come with smaller hard drives and monitors.

But for most families, and many businesses, his 486-class computers (the lightening-fast model from five years ago) can handle computing with little discernable difference from a Pentium-class computer (the current generation of hot machine) or a Pentium II-class computer (the next generation of scorchers).

That's the first rule of used computer buying, says Tom Lee, vice president of marketing at Recompute Corp. "Figure out how much computer you really need." The Austin, Texas, company sells refurbished computers starting at $599.

Buying a used computer not only saves money, it can be done so many different ways that the shopping itself can be fun. For example, every weekday at its Web site (www.onsale.com), Internet auctioneer Onsale unloads computers and other electronic goods. Notebook models costing thousands of dollars new hit the cyber-block with bids starting at $199.

Registered users place their bids on-line in a format resembling a Yankee auction: If there are four machines available, the four highest bidders win.

Since the Web site displays the current highest bids, users are encouraged to rebid. The site can even alert them by e-mail if they're outbid.

The site attracts knowledgeable buyers, so it's hard to get a real steal. But a refurbished 15- inch, NEC monitor recently sold for $219. Other refurbishers sell it for $299. New, it would cost $350.

Most used-computer companies, however, sell through mail-order.

JEM's PC Factory Outlet (www.jem computers.com) includes a bargain basement where prices on unsold items fall by a certain percentage every week.

Recompute, the Austin retailer, takes a slightly different tack - packaging refurbished machines in its own Recompute boxes with software and a surge protector, angling for the aura of a new machine.

If you're uncomfortable with mail-order, look into Computer Renaissance, a nationwide chain of nearly 150 stores.

"We sell lots of systems, low-end as well as high-end," says A.J. Alyatim, owner of a Computer Renaissance franchise in suburban St. Peters, Mo. Many customers are families buying their second computer, either to upgrade for themselves or as a machine for their children.

First time buyers should approach the process with caution. Most used-computer retailers don't offer the same technical support as new dealers. "We can't provide the hand-holding that most first timers need," says Mr. Hastings.

Also, just like used cars, used computers should be checked out by someone knowledgeable before the sale is made.

Savvy computer users can also get good deals from the want ads of newspapers. If they want to extend their reach, they can check out American Computer Exchange's Web site (www.amcoex.com) for individual sellers around the country.

The company acts as a broker, receiving the seller's machine and the buyer's money to ensure that the technology is working and that the check is good. Then it completes the exchange, taking a 10 percent to 15 percent commission for itself.

"Nobody's going to sell bogus stuff through our method," Hastings says. Only 2 percent of the transactions encounter problems, he adds.

Retailers suggesting donating machines too old to be resold to local charities.

The Used Computer Mall (www.usedcomputer.com), besides promoting sales, includes information on national organizations eager to receive used computers. It also lists a limited number of recycling locations for machines so ancient that they have to be scrapped.

TIP SHEET

How to buy a used computer

* Figure out how much computer you need. Do you need to run computer-intensive programs or access the Internet? Is a big hard drive necessary? How about a CD-ROM drive? If you're a first-time buyer who can't answer these questions, consider taking along a knowledgeable friend or buying a new computer from a dealer who can guide you.

* Check out the prices. You should save at least 30 percent over new.

* Buy from a reputable dealer - one who has been in business for several years and offers a money-back guarantee, warranty, and optional service contract.

* Examine the merchandise as soon as you receive it: keyboard, floppy-drive, monitor, and printer. If you have diagnostics software, such as Norton Utilities, use it to test the system. Call the dealer immediately about any problems.