From the April 2003 issue of Entrepreneur

There's nothing like your first thousand miles in a new automobile--the smooth ride, the luminescent dashboard, that new-car smell. But a new PC? Where's the thrill? The joy? The rich Corinthian leather? A new PC is essentially just a faster machine than the system it replaces. So why buy new and take that first-year depreciation hit?

Most workers can get along fine with what a Mercedes-Benz dealer might call "a gently used PC." PCs have relatively few weak points--mostly drives and other moving parts like on/off switches. Occasionally, a power supply will get zapped. But analysts who track PC life cycles say they're getting longer, and if a PC runs well for the first 30 days, it will probably outlive you.

You can find plenty of used models on the Web sites of big PC makers, whose no-questions-asked return policies saddle them with stocks of barely used or never-used systems they're prohibited from reselling as new. They refurbish, retest, re-warranty and discount them to businesses or resellers such as RefurbDepot.com.

There are also lots of 2- to 3-year-old systems that get moved out of corporations-usually, when equipment leases run out. They go for $100 to $500 on sites like Used-PCs.com. Although configurations of "off-lease" PCs can vary, John Hutchinson, president of Used-PCs.com, says he tries to buy large, identically configured lots--and only name brands with fully cached Intel processors.

Even with new-PC prices at record lows, you can save 20 to 50 percent or more this way, or get more PC for your buck. After years of gigahertz leapfrog by Intel and AMD, used systems have more than enough oomph for employees with moderate computing needs, especially Linux devotees. They can be used as task-specific servers or POS terminals, or harnessed together for computation-intensive projects.

Mark Eshelman of Smarte Solutions Inc. in Austin, Texas, found the 50 differently configured desktops he needed at Used-PCs.com to test Smarte's anti-piracy software. Prices and service were so good, says the 41-year-old co-founder and COO, he bought another 30 systems for his programmers and office staff.

Web hosting/design company Redglue Interactive, also in Austin, relies on Used-PCs.com for legacy hardware compatible with its current array of rack-mounted servers. Some clients' applications are actually written for legacy drive or bus types, explains the company's president, Anthony Kukla, 28.

Rapid PC component turnover tends to complicate system management and maintenance for most companies. Legacy PCs and parts could help extend the life cycle of your current PC inventory and deliver savings.

The Race to Upgrade
PCs get retired for a lot of reasons, but getting bogged down by new software tops the list. Most people suffer the hassle of changing systems only to get enough processor and memory to break the shackles of Microsoft Office 9, 10 or, soon, 11.

Are used PCs up to that challenge? Refurbs, yes; off-lease PCs, maybe not. But many folks--IT managers especially--prefer old, single-digit Office versions. That's why Microsoft had to impose its new upgrade-or-get-sued licenses in the first place. Old software has been debugged and integrated into your operation, and few office workers actually need whatever trifling feature justifies the latest upgrade.

I recently bought a refurbished Dell instead of a new one. It was the only way I could conveniently replace a Pentium II system without upgrading to Windows XP, which won't run all "older" programs and peripherals. I had ordered a new Dell when I stumbled across Dell's refurb Web page. I cancelled my new-PC order and, for the same $1,000, got 400MHz more processor, another 256MB of fast memory, 40GB more storage, Gigabit Ethernet instead of a 10/100Mbps NIC, a CD-RW drive instead of a CD-ROM, and a three-year warranty.

But am I buying someone else's hardware problems? Not likely. Refurbs get new-PC warranties, and here's how Dell describes their refurb process: "While only a small fraction of this equipment is returned because of technical issues, all systems are put through the production process again. They are taken apart and rebuilt to original factory specifications, then retested to ensure quality. We even use brand-new boxes for packaging!"

When buying truly used PCs, however, your warranty will come from a much smaller company, so pay attention to its time in business and ask for references. Buy the warranty upgrade or negotiate it if you're going to buy in bunches. Shop for an ideal configuration, not just a price, and lay out your new, refurb and used choices in a spreadsheet for quick comparison.

REPLACEMENT PARTS
Here are just a few places to find used PCs or replacement parts:


Mike Hogan is Entrepreneur's technology editor. Write him at mhogan@entrepreneur.com.