Make me an offer. (purchasing used computers and used software)(includes related article and list of brokers) (Buyers Guide)
by Tom Campbell

It's not unusual for a software company to charge $150 for an upgrade to a product that lists for $495. For that $150, you get a raft of new features, a highly "improved" user interface, extensive online help, and numerous example files. You probably also need to set aside at least 10MB of extra disk space and no doubt expect slower operation while the snazzy new menu-driven page preview feature labors to produce that almost-perfect print preview that practically shows you almost exactly what's going to print, with just a few barely noticeable details not showing quite right.

But after a few months you realize that you need a faster machine, because you get so frustrated waiting for your old computer to labor through the same job it performed in a heart-beat running the previous version. It's time to buy a new machine, or perhaps, in the downsizing nineties, a better machine will be good enough. Maybe it's time to consider a used computer.

The Time to Buy

Indeed, there has never been a better time to buy used computers or software. The industry is maturing, and demand no longer outstrips supply the way it did in the late seventies and early eighties. If the $1,500 price tag on a new 386 system with 4MB of RAM, a Super VGA monitor, and a 120MB hard disk doesn't float your boat, then maybe the same configuration in a used machine for less than a grand will.

It's not unusual to find last year's barn burner on sale for as much as one-third off. In 1992 the standard machine was a 386 running at 33 or perhaps 40 MHz. This year, it's a 25- or 33-MHz 486. With the luster now gone from a 33-MHz 386, you're apt to find some great deals. Mac buyers will find particularly good deals on last year's low end, the LC and original Classic series, because Apple has been extremely aggressive in its pricing structures of late.

Here are some tips to help you buy or sell a used machine:

* If you're selling, don't be surprised at a low consignment price. Face it--even though you paid $5,000 for your state-of-the-art 20-MHz 386 system in 1987, you'll be lucky to sell it for $750 today. Hardware prices drop fast. Really fast. It may be worth more to you than to a prospective buyer. Remember, you can pass it along to your kids or run a BBS or voice-mail answering machine with your used computer.

* Check for a BIOS you know. I recently bought a new motherboard that has a slightly old BIOS by a second-tier chip maker. Surprise! Because of problems with the BIOS, Windows sometimes hangs when it quits. Compaq, Phoenix, and AMI make high-quality BIOS chips.

* Kick the tires. Turn the machine on as soon as you come in to look it over; then leave it on while you chat. Some problems only crop up when the machine is warm. Run Chkdsk /f a couple of times on each logical volume. Try running Windows or some other program that creates big swap files. Test all the keys on the keyboard to ensure they don't stick. (If the keys don't click, that means you're looking at a membrane keyboard, which has about one-third the life of a clicking keyboard. You might have to factor in the cost of a new keyboard replacement soon.) Ask the owner to open up the box and look for obvious defects, such as melted or broken components. Don't worry about dust.

* If the system comes with a printer, insist on printing at least two full pages of both graphics and text.

* If the machine has, say, two serial ports and two parallel ports advertised, check each of the ports.

* If the system doesn't come with a monitor and video card, bring your own. It simply isn't good enough to be told the machine works.

* Most older motherboards and serial-port cards have tiny jumper switches. Make absolutely sure that you have all the documentation for those jumpers, or you might well fry the motherboard the next time you upgrade the video or add a fax card.

* Make sure the accompanying software has transferable licenses. If the seller advertised bundled software, take down the name of each package and call the software publisher to find out about licensing terms. Make sure the owner transfers the licenses to you according to those terms.

Brokers

A whole industry has sprung up around the used-computer market. (See the sidebar "Used-Computer Brokers" for addresses and telephone numbers.) A broker can help you buy a used computer or sell your old one. Some of them take a commission, some list computers for sale, and some do both. But they're all designed to match buyers with sellers.

To see how one of these companies operates, I called the National Computer Exchange (NACOMEX). Rather than keeping a stock of used machines awaiting sale, NACOMEX maintains a database of companies and individuals with used computers that they're interested in selling. To buy a computer through the service, call NACOMEX and describe the computer you want and the price range you can afford. Your NACOMEX broker will try to locate a seller who is willing to sell the equipment for the price you can pay.

In addition to providing a pipeline for used equipment from sellers to buyers, NACOMEX publishes a newsletter on used computer equipment. The newsletter costs $99 per year and includes charts showing the supply and demand of various popular systems, a price index, the price of the 100 kinds of computer equipment most active in the exchange (primarily computers and laser printers), significant trades, and volume of sales by segment.

NACOMEX doesn't inspect the equipment it sells, but it gives you 48 hours from the time of receipt to check the equipment and make sure that it's fully operational and that it matches the description given. If it fails to operate or isn't the machine you agreed to buy, you can return the machine within the 48-hour period and get your money back.

Software for Sale

Do you have to use the latest Windows version of a product? Do you really need equation editing, charting, line numbering, or strike through in your word processor? Can you afford the 20MB or more of disk space your next Windows word processor will chew up? If the answer to any of these questions is no, read on.

Used software may fill the bill at a fraction of the street price of new, and older versions of software often fill the needs of most users. Even if you answered yes to all of the above, you might still appreciate saving a few bucks on the latest version, which is sometimes available used as well.

Recently, I bought CorelDRAW! 3.0--the current version at press time--for $160. My source? The classifieds in a local freebie newspaper. The asking price was $200, but I explained to the seller that you could get a competitive upgrade for about $180 through Corel directly. He readily agreed, and I saved $300 off the lowest street price I could find for what is--even at its $600 retail--one of the best bargains on the graphics market. I had, of course, done my homework; I'd called Corel first and asked if the license was transferable. I was told that all I needed was a letter signed by the previous owner transferring ownership of the product bearing that serial number. (Ditto for Microsoft and a few other companies I checked with.)

It turned out that he hadn't even registered his copy, though, so I got the equivalent of the full retail product at one-third the store's price. More often, though, you'll see ads for slightly outdated software--typically one version back--for very low prices. As long as you can transfer the license, you're probably just as well off with the older version. I must confess, for example, that I've never needed the charting package, equation editor, and line numbering that come with Word for Windows 2.0 and that 1.0's feature set would've been just fine for me. However, I bought 2.0 because it's much faster.

The chief dangers in buying used software are that each company has a different license transfer policy and that many users will try to sell you pirated software or earlier versions from which they upgraded without transferring the licenses to you. In fact, I had found CorelDRAW! 3.0 at an astounding $95 in another ad, but in that case, the person was only willing to sell me the program disks. He wanted to keep the manuals and CD-ROM (CorelDRAW! 3.0 comes standard with both CD-ROM and floppies). Worse, he wouldn't transfer the license--a blatant attempt at a ripoff.

Here's your checklist for buying used software.

* Call the company that manufactures the product and find out whether it's possible to transfer the license and, if so, exactly how to do it. If you don't transfer the license, you're essentially buying pirated software.

* Ask around to see if there are known problems with that version. For example, PC Tools 7.0 isn't much of a bargain because it was, shall we say, released a little too early. But 7.1 is pretty solid. On the other hand, a friend of mine has PC Tools 5.0, and it works great; she doesn't need anything more powerful.

* Call the company and find out how many distribution disks are in each version. Windows products are so huge that a disk could be lost and you might never notice--until the installation program asks for it.

Previously Owned

There's a world of high-powered hardware sitting idle in the storerooms of companies that have recently upgraded equipment, and in the closets of people who tried computing and just didn't like it. None of this equipment can be sold as new, so it's a buyer's market in the used-computer world. Identify your needs, work out a reasonable price, and start looking. If you're like many used-computer hunters, you'll probably find more than you bargained for selling for less than you expected.