When purchasing a car, some people see the value of buying a used vehicle while others wouldn’t dream of buying used, and yet others tout leasing as the way to go. Those who like buying new do so because they want to be the original owners. Why inherit someone else’s problem? I often hear them say. They’d rather have the best warranty or service agreement available and they take comfort in knowing that they’ll treat their car well, make sure it’s maintained properly, and know it will last them for years and years.  The people who look for pre-owned cars tend to see it differently.  They realize that there’s a tremendous mark-up on new vehicles and simply driving a car off the dealer’s lot brings it’s price down thousands of dollars. Is the car really worth less because you drove a few hundred feet? they ask.  The answer is no, they know that the inflated price of a new automobile is inflated and would rather purchase a great car used and get more for their money.  And then there are those who lease. These are people who don’t see the value in owning at all.  They may be willing to pay a little more for the option of sending that car back to the dealer and upgrading or downgrading every few years. These are the people who love the flexibility and don’t mind paying a little more to ensure they won’t be stuck with something that no longer meets their needs in the future.

But what about networking equipment like routers, switches, memory components, and the like?  Is it better to lease, buy new, or purchase refurbished?

Well, in some ways, networking equipment is like a vehicle.  You only need one, it’s about as expensive, and if it doesn’t do what you need it to do, you’re in trouble.   The benefits of buying new include the best warranties and best service agreement options but you tend to pay much more for the new equipment than those two items are actually worth. Buying refurbished or leasing actually makes the most sense depending on your situation.  If your business is not what you consider stable (ie, growing quickly or could experience a significant downturn in the next couple of years), leasing is the way to go. It allows you to get out of an expensive network that you no longer need and allows you to quickly switch to one that accomodates your needs. It’s always current. This is an important difference between a car and networking equipment.  A car can wear out– it’s transmission can go, the electrical system can go and need to be replaced, but that’s just the point.  Those items can be replaced. Networks rely on technology and sometimes advances in technology can help save you lots of money. In addition, most of the time, leased equipment is protected with warranties that are just as good as if you’d purchased the product.

If your business is growing slowly but steadily, or not growing at all, refurbished makes the most sense. You will save thousands of dollars by simply buying used equipment. For example, you can purchase the PA-2T3+ serial port adapter from Cisco refurbished for under $400.  The manufacturer lists this product at $18,000.  At that savings, you could repurchase the product more than thirty times before you’ve paid what you would pay new.  But that won’t happen because legitimate companies offer warranties as good as the manufacturer’s warranty on refurbished products, so this notion of inheriting someone else’s problem isn’t the case with networking equipment.

Overall, saving money on your equipment by buying refurbished allows you the same flexibility as leasing in many respects.  Because you haven’t overspent, you can always sell back the refurbished product and upgrade or downgrade to another used system whenever your company’s needs dictate.