For a small business owner on a budget, previously used office equipment can seem like the perfect solution. Whether you’re looking for office furniture, lighting fixtures, computers or peripherals such as printers and copiers, used models can be found for a fraction of the cost of new equipment.
But is buying used equipment penny-wise and pound-foolish? Here are some questions to consider when making your decision.
1. What’s the difference between used and refurbished?
Used equipment is sold as-is—it typically hasn’t been inspected and is sold without a warranty. You may be able to look it over if you’re purchasing in person as opposed to online, but you won’t know how well the item was maintained, what its history is or what problems it may have had.
Refurbished equipment is inspected and reconditioned to ensure it’s up to the seller’s standards before it is offered for sale. It may come with some type of limited warranty or have the option to purchase a warranty. Depending on the item, you may even get a full report of its condition.
While purchasing refurbished items is less risky than buying used ones, it’s important to find out exactly what is involved in the refurbishing or reconditioning process.
2. What type of equipment are you buying?
If you buy a used conference table for your accounting business and later discover a big scratch on it, you can still use the table. If you buy a used computer for your accounting business and it crashes right before tax filing day on April 15, you’re in trouble. In general, the more “mission-critical” a piece of equipment is to your business operations, the riskier it is to purchase it used and the more cautious you should be.
3. How “cutting edge” does your equipment need to be?
If your business doesn’t need the most current computer technology, purchasing a used or refurbished computer can help you save money. However, if you’re in an industry where the latest equipment is critical, such as website design, then buying a used or refurbished computer could put you at a competitive disadvantage.
4. Are there hidden costs?
Used equipment may sound like a great deal—until you have to pay extra for an extended warranty, or the item breaks down a month after you buy it and requires expensive repairs. Conversely, a new piece of equipment that boosts your business’s productivity and increases sales can quickly pay for itself.
5. How will you pay for it?
New equipment is more expensive than used equipment, so you’ll more likely need financing. However, since it’s worth more, it may also be easier to obtain financing. In addition, it’s often easier to negotiate deals or discounts for new equipment than for used, since the used items are already offered at a discount.
6. How long do you plan to keep the equipment?
If you only need the item as a short-term solution, buying used could be a better choice because it won’t tie up as much of your capital as buying new. However, if you are making a long-term investment, it is probably worth the extra cost to purchase the equipment new.
7. What type of warranty is available?
If you’re buying used equipment that’s still under warranty, make sure that the warranty is transferable to you—many warranties are only good as long as the original owner is in possession. If you’re buying refurbished equipment, find out if a warranty is included or available. If so, make sure you clearly understand what that warranty covers and how long it’s good for.