The formula
Buying new and buying used are not two prices — they are two yearly costs over different lifespans. The new side is the new laptop price divided by the years you expect it to last. The used side is the used laptop price plus the repairs you expect, divided by the years you expect it to last. Whichever yearly cost is smaller wins, and the used lifespan where the winner changes is the flip.
Step 1 — Write down the new laptop and the used laptop
Start with the five numbers the comparison hangs on. In our worked example the new laptop costs $1,500.00, the new lifespan is 5 years, the used laptop costs $700.00, the used remaining lifespan is 3 years, and the expected repairs are $150.00. Keep them fixed — every later step uses these five numbers, and changing one halfway through is how comparisons go wrong.
Step 2 — Work out the new cost per year
The new cost per year is the new laptop price divided by the years you expect it to last. At $1,500.00 over 5 years the new cost is $1,500.00 ÷ 5 = $300.00 a year. There are no repairs in the new number, because a new laptop usually comes with a warranty. The new vs used laptop calculator does this for you, and it finds the used lifespan where the winner flips.
Step 3 — Work out the used cost per year
The used cost per year is the used laptop price plus the expected repairs, divided by the years you expect it to last. At a $700.00 used price and $150.00 of repairs over 3 years the used cost is ($700.00 + $150.00) ÷ 3 = $283.33 a year. That is the true cost of buying used — you pay $700.00 up front, but $150.00 of repairs are part of the price, so the laptop really costs $850.00 spread over 3 years. The repairs figure is the hardest number here, because it is a guess: a new battery or screen can cost more than $150.00.
Step 4 — Compare the yearly costs and find the winner
The new cost is $300.00 a year and the used cost is $283.33 a year. The gap is $283.33 − $300.00 = −$16.67 — and because the used cost is lower, used wins by $16.67 a year. The rule is simple: a positive gap means new wins, a negative gap means used wins, and a gap of exactly $0.00 is a tie. The sticker price misleads here — the $700.00 used laptop looks like half the $1,500.00 new one, but the yearly comparison is only $283.33 against $300.00, because the used laptop only lasts 3 years against the new one’s 5.
Step 5 — Find the used lifespan where the winner flips
The winner depends on the used lifespan, so find the lifespan where it changes. At 2 years of used life the used cost is $850.00 ÷ 2 = $425.00 a year against the new laptop’s $300.00 — new wins by $125.00 a year — and 2 years is the longest used lifespan where new still wins. At 3 years the used cost is $283.33 a year — used wins by $16.67 a year — and 3 years is the shortest used lifespan where used wins. The flip happens between 2 and 3 years: if the used laptop lasts 2 years or fewer, buy new; if it lasts 3 years or more, buy used — on these numbers.
Step 6 — Check the repairs and the new price
The last step is the sanity check on the two guesses that matter most. If the repairs are $600.00 instead of $150.00, the used cost is ($700.00 + $600.00) ÷ 3 = $433.33 a year, and new wins by $133.33 a year — repairs flip the answer. If the new laptop costs $1,000.00 instead of $1,500.00, the new cost is $1,000.00 ÷ 5 = $200.00 a year, and new wins by $83.33 a year. A used laptop’s remaining life is the most uncertain input of all, and the flip between 2 and 3 years shows how much rides on it: if you are not sure the used laptop lasts 3 years, the $16.67 a year you save is not worth the risk.
What if the used laptop lasts 5 years?
A longer used life flips the answer further toward used. At 5 years the used cost is $850.00 ÷ 5 = $170.00 a year against the new laptop’s $300.00 — used wins by $130.00 a year. The lesson is that the used lifespan matters more than the used price: a $700.00 used laptop that lasts 5 years is a bargain, and the same laptop that lasts 2 years is a bad deal at any price.
What if the repairs are $600?
Bigger repairs flip the answer the other way. At $600.00 of repairs the used cost is ($700.00 + $600.00) ÷ 3 = $433.33 a year against the new laptop’s $300.00 — new wins by $133.33 a year. The repairs are the number to watch: at $200.00 of repairs the two tie exactly at $300.00 a year. Before you buy used, price a battery and a screen for that model — if either one is expensive, the used laptop’s yearly cost climbs fast.
The used price that ties the two
At a $750.00 used price, buying new and buying used tie exactly — the used cost is ($750.00 + $150.00) ÷ 3 = $300.00 a year, the same as the new laptop. So the question “is $700.00 a good price for this used laptop?” has a number attached: $750.00 is the line. Below it, buy used; above it, buy new — at 3 years, on a $1,500.00 new laptop with $150.00 of repairs.
The new price that ties the two
At a $1,416.67 new price, buying new and buying used tie after rounding — the new cost is $1,416.67 ÷ 5 = $283.33 a year, the same as the used laptop. So the question “is $1,500.00 a good price for this new laptop?” also has a number attached: $1,416.67 is the line. Above it, buy used; below it, buy new — at 5 years, against a $700.00 used laptop with $150.00 of repairs over 3 years.
The sticker-price warning
The $700.00 used laptop looks like half the $1,500.00 new one — $700.00 against $1,500.00. If you stop there, used looks like a bargain by $800.00. But the used laptop only lasts 3 years against the new one’s 5, and $150.00 of repairs are part of its price, so the yearly comparison is $283.33 against $300.00 — a gap of only $16.67 a year, not $800.00. The sticker price misleads: the honest comparison is the cost per year of ownership. That is why the calculator compares yearly costs instead of sticker prices — and why the used lifespan, not the used price, is the answer to “new or used?”