Used & Useful -- Old Computers Get A Second Chance When Price Becomes A Consideration

Carol Reedy bought a computer recently. It wasn't her first. The Port Orchard woman has been using computers since 1980 for bookkeeping and desktop publishing, so she knew what she needed - a 486 DX with a sizable hard drive, large monitor and 8 megabytes of RAM. But what was most noteworthy about the computer she purchased was its price: $1,200, half of what it cost new.

Reedy bought a used computer. "Why buy a new one?" she said. "I don't have a great deal of money, and it is really easy for me to look at a computer with less than 100 hours of use on it that costs $2,000 less than it did new."

Linda Tate of Seattle bought her Texas Instruments laptop about three months ago. It's a 486 SX with a color display and 4MB of RAM. Like Reedy's computer, Tate's is used and cost about $1,200, a lot less than it did new. Unlike Reedy, Tate is fairly new to computers and has limited use for one right now.

"Price was important to me because my life doesn't revolve around a computer," she said. "I wasn't going to pay a lot for one. If I could find what I needed and I didn't have to pay a lot, then of course that's what I'd buy."

That both women were able to find what they needed in a computer within their budgets suggests that the market for computers has extended beyond latest and greatest designs on display in the stores. Just as the number of new personal computers being purchased every year continues to grow, the number of used or older computers being bought and sold is also increasing.

No one tracks the size of the used-computer market; unlike with automobiles, the sale of computers is not registered. But one company alone, the American Computer Exchange of Atlanta, brokers the sales of more than 80,000 used computers a year. John Hastings, the company's president, said his company's volume is but a small fraction of the market, and is doubling annually.

What is the need?

Like Reedy and Tate, many computer buyers are discovering that all they need is a basic model they can use to write term papers for a college course or run a simple accounting program for a home business.

If you're one of the many who finds himself in this situation, you need to consider two key points before you decide.

The first is practicality vs. overkill. Will the computer do what you want it to do, or will it do a whole lot more than you need? Older models of computers may not have all the bells and whistles, but when they are in good working order, they are far from useless. A 386 machine that's two generations old is perfectly suited for basic tasks like word processing and accounting, and can still run earlier versions of many current programs. It may find good use controlling a home security or sprinkler system, or as an inexpensive first machine for a child or teenager.

The second point is, of course, cost. There is a huge difference in price between almost any new computer and a used one. A brand new Pentium with monitor, CD-ROM and sound - all the bells and whistles - may cost from as little as $2,000 (sometimes less) to more than $5,000; by contrast, a good used 486 machine with monitor may cost less than $800. And 386 computers and older models are less expensive still, often in the range of $200 to $400.

The search is on

Once you've decided to purchase a used machine, the next step is to find one. Classified ads are obviously one rich field to mine. And, increasingly, the Internet is becoming a source of buy-and-sell information. As the market grows, however, more businesses are making used computers their business.

Take RE PC, in Seattle's industrial area, just east of the Kingdome. The store is essentially one large well-lighted room filled with tables holding all sorts of computers, from ancient XTs to Pentium systems. The stock on display includes not only IBMs, IBM clones, Apples and Macintoshes, but also a supply of parts, such as cables, floppy drives and modems.

RE PC's stock varies from day to day, depending on what items show up at the store. The store has a certain appeal to the hobbyist and tinkerer, with a set of shelves full of "as-is" hardware from odds and ends of computer parts to old calculators.

RE PC, which opened about a year and a half ago, is owned by Steve Hess and Mark Dabek. The two met at a computer swap meet, which seems an appropriate start considering the nature of their business. Both men love computers, and RE PC was an opportunity to own a business in a field that they enjoyed.

One thing RE PC does is find solutions to unusual problems, a characteristic that speaks to the nature of used computers. For example, RE PC recently had a shipment of old Compaq portables that are heavy and have long since been passed up by lighter and less cumbersome laptops. The computers themselves are still fully functional. An RE PC client, a locksmith, wanted a way to have access to all the key coding information he needed and have it in his work vehicles. RE PC modified the Compaqs to be more or less permanent fixtures in the vans, up to connecting them to the electrical power source in the vehicles. Now the locksmith has access to the information he needs while he is away from the shop, and he can update it with the flip of a disk.

Another reseller in the area is Vetco, which bills itself as "the wrecking yard of computers." The slogan is appropriate if you liken it to an auto junk yard. The Bellevue company not only sells working computers (usually 386s and better), but it also maintains a good selection of used parts, some of which have been stripped and salvaged from computers not worth selling as complete units.

"I get a lot of calls from people who don't want to put them (old computers) in landfills," said Gary Shearer, Vetco's manaager. "We will take a system, and if it isn't worth selling as a unit, we'll part out the good stuff and recycle the rest."

Parts get used

That seems to be a common feeling in the used computer business. Business owners and staffs recognize that if an old computer isn't reused or recycled, it ends up in the trash. To help minimize this, they run "green" shops, salvaging parts of computers that aren't purchased.

Where RE PC and Vetco provide local sources, a few companies, including American Computer Exchange, (800) 786-0717, can help you on a national basis. For a $25 listing fee, which is credited toward the company's commission on a sale, American Computer will list a used computer and an asking price in its database. Then it will match buyers who call the service with the available systems. The buyer and seller negotiate a price through American Computer, which assures each party anonymity. After agreeing on a price, the seller ships the computer to American Computer, which checks to ensure that it works (although it makes no warranty on the system). The buyer's payment is held in an escrow account while the buyer checks out the computer over a two-day period. Only after the buyer is satisfied is the seller paid.

For these services, American Computer charges between 10 and 15 percent of the sales price, depending upon the size of the sale. The buyer and seller handle shipping costs.

After deciding to buy used and finding a source to purchase it from, there are some other questions you should probably consider.

-- What are you getting? What sort of warranty and support are available? A used computer is a bit like a used car. You can't be entirely sure what you're getting.

Resellers recognize this limitation. While they cannot match a new system warranty, they can minimize the potential for things to go wrong. Most resellers run some testing on their stock before they sell it, identifying problems before they happen. Some offer a guarantee on the computer. RE PC typically offers warranties of seven days, but in some cases as long as 90 days.

The best rule of thumb is to check out the used computer thoroughly and get a warranty in writing if you can. You should assume that some things may go wrong, and be prepared to have the system serviced. Even if some repairs are needed, when you consider the cost of a new machine, buying a used computer and budgeting for some work is still an attractive way to go.

-- What software is available and where? You probably don't need to worry about this if you're buying a used 486 or Pentium. But this may be the biggest concern if you buy an XT, 286 or 386. What good is an old computer if you can't find software to run on it?

You probably won't be able to walk into Egghead or Computer City and find an early version of MS-DOS. Some resellers carry a limited stock of software or they include licensed versions of some programs.

Some specialty retailers, including Half Price Books and Software, often have sizable selections. Shareware outlets also have inexpensive programs that will operate on older PCs, Apples and Macs.

Other places to look include mail order companies and computer bulletin boards.

-- How much should you spend? How much should you sell your computer for? Like buying a used car, putting a price on a used computer can be difficult. American Computer issues a weekly index of used computer prices that reflects 20 to 40 types of systems. Classified ads can also give you a sense of price levels.

It should be noted that used computers aren't for everyone. Some of the newer software on the market, for one thing, just won't run on an old machine.

But if your needs of a computer are limited, and if price is a concern, then a used computer may be exactly the right solution. And beyond that, buying a used system is a form of recycling, keeping a 30 pound hunk of plastic and metal out of a landfill.

And that, ultimately, is of benefit to all.