Thoughts on upgrading to a new iMac every year and selling the older one?

[kat.hayes]

I'm thinking about upgrading to a new iMac every year, similar to how some people get a new iPhone each year. My idea in doing this is to always have the best iMac available, and I'm thinking that after several years of buying, and selling my old iMacs, that it may make financial sense? If I could sell a one year old iMac every year for a good return, and apply the money towards a new one, as opposed to waiting 4-5 years when the iMac is very outdated, and taking a much larger hit on my return, possibly so much so that it is only worth several hundred dollars. I'm curious to hear if anyone else is doing this and what you think of the idea.

Thanks.

 

[Bear]

When you replace your Mac every year, it costs money. The question is, how does that add up and compare to replacing your Mac every 3 or 4 or 5 years. I suspect you'll find you will save money upgrading every 3 or 4 years even if you buy AppleCare.

If you replace your Mac every year, you don't need to worry about AppleCare or paying for OS upgrades. However there is the time it takes to set up a new Mac and what if you aren't ready to upgrade to a newer OS X yet?

 

[thedeske]

I've crunched the math with 2 of my friends over the years. The new & used price has been amazingly consistent on the models they use. Typically maxed out iMacs & Macbook Pros.
It costs a little more to go new each year, but not much. There's an interesting spot around 18 months that leans toward keeping it past the 1 year mark. 6 month processor bumps were not taken into account. None of us think it's worth the trouble.

Keeping the equipment in pristine condition is key to making it work if you want to consider this type of "Payment Plan"

 

[fig]

Great way to go IMO.

You'll be able to sell your old iMac for probably 1/2 to 2/3 of your original price (depending when you sell it) which isn't a bad return on investment at all.

If you're investing another $700-1000 on the new machine that means you're "renting" your Mac for about $500 per year, not a bad deal at all. I actually plan to do something similar with my Mac Mini.

 

[ApfelKuchen]

There are two principal reasons to upgrade annually: 1) To obtain whatever productivity benefits that derive from having the newest hardware, and 2) To have the emotional satisfaction/pleasure derived from owning brand-new gear.

It's hard to put a dollar figure on any of these, as each person is affected differently. A 10% annual increase in performance benchmarks, for example, is only beneficial when the system is doing real work. Most of us spend a lot more time contemplating than the computer spends doing heavy processing, so that 10% improvement may only amount to a few hours over the year. However, for someone doing heavy crunching on a constant basis, this is a no-brainer.

So, look at it like a rental/lease situation. IF you can sell a one-year-old iMac for 75% of its new price, you'd be paying $250-$500 (roughly, depending on model) for one year's use of the computer. Add to that the value of the time you'd spend shopping for the new model, transferring data from one computer to the next, restoring the OS and HDD to like-new condition, and selling the thing. If that was 16 hours, and your time is worth $15/hour - that'd be another $240. So, in this example, "rental" is $490/yr. ($40.83/mo.) to $740/yr. ($61.66/mo.). On the other hand, if you replaced the computer after 4 years and sold it for 25% of the original price? Your cost would be $247.50/yr. to $435/yr.

So, the added cost of upgrading annually (based on this arbitrary model) is between $242.50 and $305/yr. Will you derive that much benefit?

If it was a matter of productivity alone? Using this example, over the course of four years you'd have to save 64.67-81.34 hours at $15/hr. to justify the annual upgrade. That may or may not be hard.

Upgrading for satisfaction/pleasure alone? If you'd get more pleasure out of this than spending the same money on other things that give you pleasure, then why not?

Now, it may take more than 16 hours to fully transition from one computer to the next, the possible resale prices may over-estimate what you can get, so this estimate is probably on the low side.

 

[kat.hayes]

Thanks everyone for the responses -- lots of useful comments!

Some things that I had not considered:
- savings from not buying Applecare
- no need for OS upgrade purchases (even though this is a pretty small amount)
- tax write off each year for new purchase of iMac lowers cost even more (I just thought of this one, I do graphic design as a side business)

Some things I'm curious about:
1. I've sold phones before through Craigslist and eBay, though I have never sold a computer before. Is it difficult to do this when selling for the market going price? Can you sell iMacs fairly easily through Craigslist?

2. If I do this, I plan to use Migration Assistant or a cloning program to transfer all data and applications. In this case, is there really much time involved going from one iMac to another?

Thanks!

 

[Bear]

• Tax Write off - you may only get a partial write off if the sell the computer after a year. Check with your accountant.
• Migrating - Migration assistant would be the way to go. Cloning from an old system to a new system can run into issues. As for the amount of time, it depends on how much data you have on your system. And the average size of the files. A lot of small files takes longer than fewer larger files. Figure for 500GB that it will take 3 to 4 hours to do a migration. This includes migrating apps over. Then you need to take the time to wipe the old system before selling it.
• Selling - There are many ways to go, each with their own risks and time involvement. It may not be worth the time to sell your computer every year. Also do note that computers that have AppleCare do sell for a tad more than computers that are out of warranty.

 

[mapleleafer]

I'm thinking about upgrading to a new iMac every year

Buying more computers than you need will not likely create new computer users to buy your discards. I also doubt that excess junk and consumed resources will do the world much good.

 

[Outrigger]

that it may make financial sense?

I can't see in any way that this would make financial sense. But of course, what makes financial sense to you might not to someone else. It seems that you want to upgrade just to have the latest and greatest, and not because your sidejob demands the incremental processing power that the upgrade will bring. Only you can determine if your lust after the newness is worth the cost.

 

[Bear]

After some thought, unless getting a new iMac will noticeably speed up the work you're doing, the best compromise is to upgrade every 3 years. This way you always have a machine that has AppleCare coverage and the old system still has some resale value.

 

[kat.hayes]

Thanks everyone for your feedback.

Regardless if I end up choosing to purchase a new iMac every year, or once every 3-4 years, I'd like to get an iMac with the built-in VESA mount for attaching to a H8 Humanscale arm.

Any ideas of how difficult it is to sell an iMac with the built in VESA mount as opposed to one with the default stand?

Thanks.

 

[whodatrr]

I refresh every 2.5yrs, like clockwork. I haven't planned it intentionally, but it's just how it's gone for me, for at least 5 refresh cycles. A few things:

• Applecare - 2.5yrs is perfect, since I still sell it with a bit of Applecare. This increases its value, by giving some peace-of-mind for the buyer.
• Refurbs - I always buy refurbs, and cut the price by ~20% by doing so. For example, I've just bought a fairly maxed-out i7/27/3TB Fusion etc. system that was about $600 off list. I've also found that Apple often throws in a "freebie" to the refurb configs. My last one came with a 680mx, for example, though I din't order the system with the upgraded card. And Apple does an excellent job of supporting refurbs. the only problem is that you have to wait 3-6mos after G.A., for them to be available.
• Resale - Craigslist is an excellent way to sell. resale values, even after 2.5yrs, are usually around 50% of what I paid for them. Apple maintains much higher resale values than the PC side, especially for non-maxed configurations. Do realize that you'll recoup a smaller percentage of your investment, if your system is maxed-out.
• Operational Cost - Given that I purchase refurbs at around 80% of list, and I sell them for around 50% of list, 2.5yrs later, my annual running cost is 10-15% of list. So, a $2,000 system costs me between $200-$300 per year to own & operate. And, since these systems are how I earn my keep, my tax write-off helps.
• Migration - I don't even think about it. The process was somewhat easy in the past. But now with Time Machine, there's zero downtime. I migrated to my new iMac, while I was working on the old one. I quite literally unplugged the old one, and swapped to the new one, between conference calls... and I was done.

I've been doing this for years, with both laptops & desktops. For me, 2.5yrs seems to be the sweet spot. If something really compelling came along sooner, I might swap earlier, but 2.5yrs just seems to be how things have worked out. YMMV.

 

[senseless]

Assuming a $2000 plus 6% sales tax, It will cost you an additional $400 per year to buy new every year, versus buying new every 5 years. You have to calculate multiple sales tax transactions also.

 

[Turnpike]

As someone who has gone through a lot of computers for work, if having a new iMac is a fun thing for you, then it's totally worth it; as far as computers go, there is no better return on your investment than with a new apple computer as long as you keep it near mint, most people are happy for a chance to pay $100 or $200 or $300 less than new price for one that's a year old if it's mint, especially when you figure in the sales tax too. So break that loss up over the year, and compared to soda, cigarettes, or the interest and depreciation that's going on out in your driveway if you're driving something newer, then it's not a bad expense for the fun of having a new iMac. I have the largest capacity iPhone, and upgrade everytime I get a nick on it or there's a new model coming out; sure I take a little bit of a loss (I buy new sealed on Ebay to avoid the sales tax) but if it's a premium model, they bring a decent dollar. I've never had a cell phone (or computer for that matter) that I could 3/4 new price 2 years later like with Apple stuff. Yes, there's a cost to the constant upgrading, but if it's fun for you to daily use a shiney new device or computer, it's a cheap kind of fun.

 

[Mr Rabbit]

Any ideas of how difficult it is to sell an iMac with the built in VESA mount as opposed to one with the default stand?

The VESA mounted iMacs are a very niche market. Coming from Apple and an Authorized Reseller I've only seen a handful of requests for VESA mounts out of thousands of customers I've personally helped. Limiting an iMac to a VESA mount with the intention of selling it in a year (or even 3 years) would be a poor decision. The majority of VESA mounted iMacs I have seen will likely be used until an upgrade is forced, either by software incompatibility or hardware failure.

I would rethink AppleCare as well. Not adding it certainly saves you a bit of cash up front but it takes away from the resale ability. I don't have statistics to back this up but AppleCare on a used Mac instantly makes it much more attractive, even if $200-300 more than an identical model, to potential buyers thanks to Apple's phenomenal customer service. There's no transferring of ownership, no proof of ownership, etc to jump through if you need service. Apple simply scans your serial number, see's that it's covered/not covered and takes care of it from there. I just recently bought my sister a used MacBook for $250. I would have gladly paid $400-450 if it had a good bit of AppleCare remaining.

With all of that said... I think the work involved with purchasing the new Mac, transferring data over to the new Mac, wiping the old Mac, listing it for sale, working with potential buyers, etc is too time consuming to make it worthwhile. The dealing with buyers is the big part. If you find a company/individual who will buy your old Macs whenever you refresh they will almost always only pay about half of what other random people would pay. If we saw dramatic leaps in performance each year I might be persuaded to change my mind but that just isn't the reality. MAYBE every two years, but even then there's rarely a huge jump in performance.

At my office we replace our Macs every 3 years, simply to ensure everyone is on a near even playing field and to know that there is warranty coverage when needed.

At home I replace (heh, I rarely sell/get rid of the old ones) Macs in 5 - 6 year cycles unless a cost inefficient hardware failure occurs. The Macs I have decided to sell were still sold at a good price (i.e. 4 year old 17" PowerBook 1.5Ghz for $900~) after several years of use.

 

[scbond]

I'm thinking about upgrading to a new iMac every year, similar to how some people get a new iPhone each year. My idea in doing this is to always have the best iMac available, and I'm thinking that after several years of buying, and selling my old iMacs, that it may make financial sense? If I could sell a one year old iMac every year for a good return, and apply the money towards a new one, as opposed to waiting 4-5 years when the iMac is very outdated, and taking a much larger hit on my return, possibly so much so that it is only worth several hundred dollars. I'm curious to hear if anyone else is doing this and what you think of the idea.

Thanks.

Do you need to upgrade every single update? Rhetorical question so no need to answer...nobody on the planet needs to buy the new one every time it comes out.

 

[kat.hayes]

Thanks everyone for the great feedback.

I absolutely do not need to upgrade every year for performance gains, and I do not feel compelled to get a new Mac every year.

To add to my previous explanation, I was really looking at it from a financial point-of-view and also as a way to make sure I do not find myself getting stuck with a Mac that does not support one feature or another, as an example, I have a 2010 Macbook Pro that is running 10.7.3, even if I upgrade the OS, it will still not allow me to use Airplay with my AppleTV (I do know about AirParrot) I'm just using this as an example as to why I thought about the idea of upgrading each year. This is now a 3-yr old Mac, though when 10.8 came out last year, it was only a 2-yr old Mac.

Thanks.

 

[Bear]

...
To add to my previous explanation, I was really looking at it from a financial point-of-view and also as a way to make sure I do not find myself getting stuck with a Mac that does not support one feature or another,
...

Plan on a 4 year upgrade cycle and if you run in to a feature you need that your current system doesn't have, upgrade early. It'll be more cost effective than upgrading every year.

 

[magilla]

Thanks everyone for the responses -- lots of useful comments!

Some things that I had not considered:
- savings from not buying Applecare
- no need for OS upgrade purchases (even though this is a pretty small amount)
- tax write off each year for new purchase of iMac lowers cost even more (I just thought of this one, I do graphic design as a side business)

Some things I'm curious about:
1. I've sold phones before through Craigslist and eBay, though I have never sold a computer before. Is it difficult to do this when selling for the market going price? Can you sell iMacs fairly easily through Craigslist?

2. If I do this, I plan to use Migration Assistant or a cloning program to transfer all data and applications. In this case, is there really much time involved going from one iMac to another?

Thanks!

Your graphic design as a "side business" doesn't qualify you for a tax write off - your accountant should know that and if they don't - then you need to start looking for a new tax accountant instead of a new Mac.

 

[fig]

Your graphic design as a "side business" doesn't qualify you for a tax write off - your accountant should know that and if they don't - then you need to start looking for a new tax accountant instead of a new Mac.

Sure it does, if that machine is used exclusively for work.

 

[kat.hayes]

Your graphic design as a "side business" doesn't qualify you for a tax write off - your accountant should know that and if they don't - then you need to start looking for a new tax accountant instead of a new Mac.

With or without income (I do claim 1099 income every year) you can claim business expenses and deduct assets on Schedule C for a business (I believe it is schedule C). The purchase of an iMac is an asset that I can depreciate over multiple years if I intend to keep it over multiple years, or I could depreciate it in 1 year for a larger deduction that year if I plan to sell it and get another in the following year....

 

[Mr. Dee]

I wouldn't bother

Its not like Moores Law is guaranteeing dramatic performance. In fact, its likely to hit a wall soon.

What happened to the days when you buy a computer, use it for what it is and get the most out of it? Back in the 90's, you bought a computer, completed your work on it and used it until it died.

I remember back in '07, this freelance graphic designer was getting major work done on an old iMac G3 with old versions of Photoshop and Illustrator. He designed T-Shirts with original artwork and illustrations. It did everything he needed and used it until he returned to his home country.

Now, this guy was not in need of the latest and greatest, yet he was able to get the most out it. I am planning to purchase an iMac later this year and I plan to get at least 5 years out of it. I have had quite a number of 5 year old PC's die on me this summer, so I am using that for the measuring bar. They were working quite well, its just that the PSU's died. We could replace them, but they are so expensive.