What Are The Pros And Cons Of Buying Refurbished Tech Gadgets?

There is a stigma associated with buying refurbished tech, particularly smart technology. While buying a refurbished petrol/diesel engine car is okay, the same cannot be said about smart cars. People aren’t as confident when purchasing refurbished computer hardware and gadgets as other goods.

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Why is that so? Even with the market demand rising in 2022 to reach $47.77 billion, while second-hand laptops and PCs are expected to go over $14.76 billion, the stigma remains stagnant, introducing numerous challenges for refurbished tech-based equipment.

This article will examine this viewpoint and determine why buying refurbished tech is considered dishonorable or looked down on in today’s society.

Analyzing The Perceived Issues with Buying Refurbished Tech

As per public perception, the issue of buying refurbished is directly proportional to the complexity of the equipment being purchased. Consider furniture, for example. 40% of individuals in the US prefer buying refurbished furniture for their living rooms, but only 10% would consider buying refurbished electronics. Buying used electric or intelligent vehicles has a similar social cost.

This isn’t just a US-specific issue, mind you. The same is true in the UK and across the globe as well.

There is also a social cost associated with buying refurbished phones or vehicles versus buying a new one – even if the refurbished phone you purchased is better than the new one. Some common concerns that people raise when a peer buys refurbished tech include the following:

1. The suggestion of privacy costs with refurbished smart equipment.
2. What if there is a problem with the equipment?
3. Is the maintenance effort worth the cost reduction?
4. The depreciation in price that comes with opening the smartphone or the lack of that new car smell.
5. The appearance of refurbished equipment vs. their new counterparts.
6. The suggestion that you didn’t get to unbox the equipment – someone else did that.

Some of these concerns are better founded than others, but others are based entirely on perception. For example, some people don’t mind the refurbished outlook so long as the value provided by the tech is better than what they would have gotten if they bought a new one.

Benefits of Buying Second-hand Tech

An overview of these pros and cons may give the impression that buying second-hand tech isn’t such a great idea, but as you dig deeper, you’ll understand that most cons are superficial and avoidable. Some questions you should ask yourself include the following:

1. What if you buy from a second-hand retailer?
2. Are you able to negotiate a fair price that throws the issue of the depreciation out the window?
3. Do appearances matter to you?
4. Does unboxing the product really make a difference?
5. Would you be happier with a used but more advanced version of the same product, or will a more expensive yet one with fewer features satiate your thirst?

These issues are more geared towards people who are more focused on how they’d look than people who want more value out of their gadgets. There are many companies who have now shifted their focus towards refurbished and second-hand tech, though, solely because of the sheer value they generate and their cost-effectiveness.

Buying From Second-hand Retailers

Buying from a second-hand retailer that offers a checking warranty as well as a certain degree of aftermarket support. The issue of trust and reliability, and aftermarket support shouldn’t come up. In many instances, these retailers offer much better aftermarket support than you can expect at a brand’s service center.

Negotiating a Fair Price

When buying second-hand tech, you need to consider how much it has been used, i.e., depreciating the product. Suppose the price you get for the second-hand product sufficiently represents a depreciated cost or appearance. In that case, the purchase may be more beneficial to you than purchasing a new one!

The appearance of second-hand is primarily a superficial issue and only fuels the stigma further. So long as the price reflects the wear and tear, it shouldn’t be a significant issue. The same goes for unboxing. The second-hand product won’t give you bragging rights, but it sure will provide you with more value for your money.

A Better Version Or A Newer Version?

You may be able to buy a new iPhone 13 Pro for $1,100 from your nearest store, or a friend may be selling their iPhone 13 Pro Max for the same price. Which would be better? This difference in cost is perhaps the more prevalent benefit of buying second-hand, but at the same time, it faces the brunt of the criticism as well.

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Fortunately, the stigma presented above is primarily superlative. As long as you are careful about what you purchase and who you purchase it from, second-hand tech can help you save money while enjoying the latest tech!

CompuCycle lets you refurbish your old tech and sell it for a better price and helps you find recycled material to get at a better price and, therefore, improve the value you get. If you’d like to learn more about how we can help, get in touch today!

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U.S. auto parts recyclers say online auctions have broadened competition for salvaged vehicles to their detriment.

Insurance companies used to have contracts directly with local automotive recyclers for vehicles that were declared total losses following crashes. Now, insurers primarily work with online auction companies, such as Copart and Insurance Auto Auctions, and recyclers must bid on the vehicles, competing against other automotive recyclers—whether local competitors or those in other states—as well as with auto rebuilders in other countries.

While recyclers have benefitted in some ways from the growth of online auctions, some say they also have had negative effects on the automotive recycling industry.

Sight unseen

Sandy Blalock, executive director of the Automotive Recyclers Association, Manassas, Virginia, says online auctions have expanded automotive recyclers’ pool of vehicles because they can buy from outside their own markets.

But that advantage has an associated disadvantage.

“The biggest problem you have is you can’t get up close and personal and actually verify that what that picture looks like is actually what you’re getting,” she says.

Blalock says it’s not uncommon for people to purchase wrecked vehicles, make some cosmetic upgrades often using aftermarket parts, and rerun the vehicles back through the auctions.

Norman Wright, owner, and CEO of Stadium Auto Parts, Henderson, Colorado, also mentions incidences of what he calls fraud on the auction sites.

He says Stadium bought a 2021 Mercedes van with 24,000 miles from an auction site and found it wasn’t what he and his team expected. “Since you can’t really go down and look at these vehicles, you’re doing it from pictures online,” Wright adds. “We assumed we had a good product. When it came back, the transmission was missing … and they put in an old engine.”

Because vehicles are sold as is in the salvage pools, Wright says he “had no recourse for fraud.”

Broader appeal

Auctions also have increased the number of bidders on salvage vehicles and their geographical reach.

“We’ve got people from all over the world buying local automotive recycler’s salvage in the United States,” Blalock says. “And some of them can afford to pay a whole lot more money for those cars because they have a larger value in the marketplace they’re taking it to and that’s including shipping it there.”

She adds that her biggest concern for the automotive recycling industry is that companies are forced into competing for savage at artificially high pricing because they are bidding against people who aren’t in the same business, “so, they can afford to pay more money.”

Wright says insurance companies are seeing a greater return on their salvage vehicles because the online auctions have opened up the salvage pools “to anybody who wants to buy.”

“Now, we’re competing against not only each other but we’re also competing against what we call rebuilders who buy these cars to rebuild them and then resell them,” he says.

In the last eight to 10 years, Wright says, the number of rebuilders who export cars from the U.S. to other markets, such as Mexico and the Middle East, has grown. He estimates from 30 percent to 40 percent of the salvage vehicles sold on auction sites are exported from the U.S.

Blalock says she suspects the auctions would confirm 30 percent of the salvaged vehicles they sell are purchased by international buyers. “A good 30 percent or more is purchased by people who are not auto recyclers but rebuilders, and then 30 percent are auto recyclers,” she says. “Basically, we’re one-third of their customer base.”

The wider competition for local automotive recyclers’ salvage vehicles has raised the prices auto recyclers have to bid to secure inventory. But that’s not the only escalation that has occurred, Wright and Blalock say. The fees the auction companies charge buyers also have increased.

“At the end of the day, all the auctions are in the business and making money,” Blalock says. “And it’s a very competitive market because they’re competing against each other … for those cars. And, of course, the way that you maintain that position is by it costing the insurance companies less. And so they have to make that money up somewhere.”

She says buyers are paying a growing array of fees, including a pull-out fee to remove the vehicle from the auction and a fee to pay via check.

“The thing I get the most complaints about from our members is the fees that they’re paying at the auctions or that a new fee has all of a sudden appeared,” she says. “That is a very big, big concern for our industry.”

Wright says when the fees and higher prices of the vehicles are combined, his cost of goods as a percentage of his overall expenses has grown from 25 percent to 30 percent to nearly 50 percent to 55 percent. “It’s so much pressure on the recycler to continue operations as our margins continue to shrink,” he says.

“And the other dilemma is there are only two realistic salvage pools left,” Wright adds, citing Copart and IAA. “And those two companies probably control 90 percent of the insured local automotive recycler’s salvage, so there are no other alternatives for us.”

Blalock says Copart and IAA are supportive of the automotive recycling industry and are associate members of the ARA. “I don’t know how we have any influence over that business model other than maybe sit down and talk with them and see if there isn’t something we could work out,” she says, adding that the ARA intends to sit down with leaders from the auction companies. “We need to sit down and see if there isn’t some consideration they could be giving with the true licensed professional auto recyclers that are buying cars from them.”

Blalock says smaller family-run auto recyclers, which at one time were the heart of the industry, are the companies most affected by the growth of the local automotive recyclers’ salvage auctions. “They’re having to pay those buyers’ fees, and it takes away from their buying power for the salvage they need to be profitable in their businesses,” she says. “It’s very sad to think that we might lose an entire segment of our industry just because they can’t afford to compete and pay not only the prices but all the other associated costs of getting cars.”

This article initially appeared on Recycling Today

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