Cutting the cost of computing

Buying a computer can be an expensive business. Although prices on new PCs have dropped dramatically in recent years, even entry level models will leave a £500 dent in the family budget.

Worse than that, even the most budget-priced computer is likely to be more powerful than most people ever need.

If you are not a computer snob, there are some bargain-busting PCs just waiting to be found. If you turn away from the more obvious buying places and put in the effort, you could find that a second PC or an upgrade is well within your grasp.

Where to start?
If you're thinking about buying a cheap computer, a good place to start is thinking about the computer market itself.

The majority of computers in the world aren't bought by the working public; most are bought in batches by huge companies that put a computer on the desk of every employee. So it's not hard to see where a lot of the refurbished second-hand computers come from.

However, if you think the way to get a budget PC is to go and knock on the door of your local multinational, prepare to be disappointed. Many large companies lease their computer equipment and when it has reached the end of its useful life, a van rolls up and takes it all away.

Ex-lease computers often get sold on but usually in bulk with little chance for the individual buyer to pick one up on the cheap and cheerful.

If a company does buy its own computers, it will usually cling on to them until they are too old to be of any real use in the workplace. Approaching companies for old computers rarely brings results but if you work for the company in question, you may be lucky.

Increasingly, though, businesses looking to offload large numbers of computers look to companies which specialise in 'recommissioning' elderly computers, either for resale or a good cause. Resale PCs are often sold through refurbishing companies but charity groups such as Computer Aid International are also popular.

Shopping smart
If you're not in a position to approach an employer about a computer then the next best place to look is where all those leased computers go when they are retired. These are often no more than two or three years old and still have plenty to offer.

There are dozens of companies around which specialise in reselling used computers. There is a list of these companies at the end of the feature but one of the best known is Morgan Computers.

Based in west London, Morgan has branches in central London, Manchester and Birmingham. Wandering into its shops is like entering the palace of PC World's harder-edged twin.

Gone are the flash displays, wide aisles and toothy grins. Morgan stores have a cash-and-carry feel to them but a quick browse will leave you in no doubt that there is money to be saved, and staff are on hand to advise if you are not completely sure what you are after.

Stock at Morgans can be largely classified into two categories: refurbished and new. As an example of refurbished equipment, we saw a slimline HP Omnibook notebook PC with Windows 2000 installed for £400, plus a number of 733MHz IBM NetVista PCs with operating systems and monitors for £230.

Tom Willett from Morgan Computers explained to us that there are some real bargains to be had.

"If you know what you are doing, ex-lease computers can be very cheap. They often come without software, drivers, cabling and manuals but if you are confident with computers, you can have one up and running quite quickly," he said.

"Often, they are no more than a couple of years old and have been moved on by large companies who are upgrading their equipment.

"We don't get involved in selling unboxed or unchecked equipment. Our refurbished stock is not simply given a wipe over and put on the shelf. It is thoroughly checked over and sold with a three-month warranty."

The as-new stock is typically new equipment from a large manufacturer which has not been sold and has been superseded by newer equipment.

When we visited, an HP Pavilion desktop computer, sporting an Intel Pentium 4 2.8GHz processor, huge hard disk and an excellent graphics card, all for £740, looked to be good value.

It was a new product, packaged in the same box in which it left the factory. It had the correct manuals, cables and even came with the full warranty from HP.

It was in all senses a new computer, but sold for a hundred or so pounds less than you'd find it in a high-street shop and even came with Microsoft Windows XP installed and ready to go.

Willett explained that the new stock is a no-risk purchase. "When people buy computers from us, they worry about warranty and support problems but there is no need," he explained.

"Most of the pricier equipment is brand new but hasn't been sold. Although the computers are unused, newer models arrive with different specifications and the stock is offered to us.

"We sell a lot of computers which are a few months old but they still have a full manufacturer's warranty. It's no different from buying in the high street in that respect."

Online auctions
If you have ever browsed an online auction and looked for a PC, you will probably have noticed that prices in the auctions are much lower than you'd pay from a refurbishing company for a similar specification computer.

You may also have noticed that there are quite a few computers sold as new ones, with modern specifications but prices that look well below what you'd expect to see in a computer store.

Obviously, one of the main reasons why computers look cheap on eBay, for example, is because auction prices always look low when the auction is in progress.

Look instead at the prices that the products finish at. There is usually a flurry of bidding on popular items in the last couple of minutes and prices can jump to a level where the product in question doesn't look such a bargain after all.

Another reason that they are cheaper is because you simply don't know what to expect for your money. Although the description may make the computer sound like it has hardly been used, you won't know the truth until the postman brings it to the door.

Although there are ways to pursue badly described or mis-sold goods on auction sites, progress is usually slow and the result of the complaint can be variable.

There are a couple of things to beware of when buying PCs from an auction but they are just as applicable if you are buying from a classified advert.

One major scam to look out for is the rash of 'new' computers which appear. These are often listed in batches of two or three at a time. We are all for private enterprise at Computeractive, but if somebody is manufacturing PCs in any number and selling them on eBay, that technically makes them a trader.

If you were to buy a PC from a trader, you would have a lot more rights as a consumer than you have if you buy one from an individual on an internet auction.

If it goes wrong, who can you call for technical support? If a component breaks in the first year, who do you make a warranty claim to? While the computer you are looking at may look like a bargain, it could prove very problematic if things go pear-shaped later on.

But let's not be too negative about this. There are still bargains to be had on eBay and the other auction sites. First, there are plenty of legitimate traders using the auctions. We browsed for a couple of minutes before finding 24 IBM PCs for sale at £75.

These were Pentium III 500MHz computers with enough memory and hard disk space to be put to use straight away. A 30-day warranty on each computer minimised the chances of being stung.

If you are confident dealing with PC problems, eBay is also an excellent place to pick up a project PC. We found a collection of Apricot Zen PCs which were on offer for £1 each.

They were pretty elderly and needed hard disks, but as a word processing computer for a student or a simple PC for the beginner, they still have something to offer. Even if they aren't up to much, at £1 each, they don't represent a huge investment.

Our favourite, however, was an ageing Compaq Deskpro Pentium II 233MHz PC. The final price was £87 and this got you a working PC, complete with a full version of Windows 98 and a copy of Microsoft Office XP.

The software is worth three times what the winner paid for the computer. Buying on an auction can be risky, but you might just find a bargain.

DIY
Computeractive has investigated the swings and roundabouts of building a PC over buying one many times and the results have always been the same.

If you want a posh computer, it is almost certainly more expensive to build it yourself, and with no warranty you have to fix it yourself if it goes wrong.

If you aren't worried about having the latest components, you can build a PC base unit for under £300. See our feature on How to build your own PC here.

If the computer is for simpler computing tasks such as office work and internet browsing, Mini-ITX computers are a viable budget buy. These are computers which are far smaller than standard and the motherboards come with a processor fitted on them already.

Not having to buy a processor separately keeps costs down, but the resultant PC won't be powerful enough for demanding tasks like 3D gaming, video editing or serious photo work.

Whichever PC you build, you'll need an operating system, so make sure you add the cost of that to your final total when you weigh up your options.

It could be, of course, that the computer you are seeking to replace isn't quite ready to be put out to pasture. One of the favourite ways of breathing life into old computers is with upgrades. Before you go too mad, however, take care to look at what needs upgrading.

If your computer needs more processing power, that will mean a new processor, memory and motherboard and the cost means it won't make sense.

If your computer isn't too old on the other hand, a thorough spring-clean of Windows and some extra memory may transform its performance at a pocket-money price and mean you can do without a new computer for another year or more. If you not sure about upgrades, call your local computer shop or a knowledgeable friend for advice.

Everyone's a winner
Everybody wants to save money but when you are shopping for a computer, it is important to keep sight of the fact that you want value for money, rather than simply a low price.

Taking a punt on a computer on eBay or from a car boot sale is fine if there are only small amounts of money involved but if you can spare a little more cash, you can buy a warranted, refurbished PC from companies like Morgan and Getmeapc or new surplus stock from EuroPC without busting your budget.

Whichever route you take to keeping you purchase price palatable, we recommend working out your costs well before you start. Write down a budget and then look online or scour the classifieds to get a feel for what you can expect for your money.

This will ensure you are ready to spot a genuine bargain - or a pony - without too much confusion. If you are considering an upgrade, don't forget to look at the cost of labour if you aren't fitting parts yourself.

If you are, ask yourself whether you are throwing good money after bad. With a refurbished computer starting at under £100 for the base unit only and new ones starting from around £350, your options might not be as limited as your budget.

Operating systems
Buying a cheap computer isn't just about the metal box. Without an operating system, even the flashiest computer is little more than an expensive doorstop. For that reason, it is very important to understand exactly what you get for your money.

If your computer comes with a copy of Windows, ensure that you also get the licence number and disk. Without the licence, you can't reinstall Windows if you have a problem and without the disk, you can't install Windows at all.

Microsoft is pretty specific about what can and can't be done with a copy of Windows in terms of the licence agreement. The main thing is that it should not be installed on more than one PC.

In versions of the operating system up to Windows 2000 and Me, there was only your conscience to stop you from installing one copy on several computers. With Windows XP, however, the product activation system ensures that there is only one copy of Windows for each computer.

If the computer you are considering is very cheap indeed, then you can afford to buy an operating system but even the more elderly operating systems such as Windows 98 will cost around £90 to buy.

That may seem a lot when you can buy XP for about the same money, but the latest operating system may not work on an ageing machine.

There are cheaper options out there if you fancy a challenge. Linux can be had for free but getting to grips with it is not for computing novices.

In fact, if you are game, there's a whole host of free software packages available which will let you run your new PC without any software costs at all. Have a look at our feature on free software to see what we thought of them.