Depreciation, Deliberately: What a Laptop Actually Costs You Per Year

The Editorial Staff convened to consider a laptop. Not a specific laptop — the category. Two of them, in fact: the aluminum kind that comes from Cupertino and the plastic-or-aluminum kind that comes from approximately everywhere else. The question was not "which is faster" or "which is prettier," both of which have been asked to exhaustion by people with strong feelings and weak spreadsheets. The question was narrower, and duller, and therefore ours: over the years you own it, what does each one actually cost you per year?

We noted, without enthusiasm, that almost nobody computes this. People compare sticker prices. The sticker price is the single least useful number in the transaction. It tells you what leaves your account on day one and nothing about the twelve hundred or eighteen hundred days that follow.

The Number on the Box Answers the Wrong Question

A price tag is a photograph. It captures one instant — the checkout — and pretends that instant is the whole story. It is not. Ownership is a duration, and duration is where the money quietly happens: the years of use, the eventual resale, the accessory you swore you would not need and bought in month three.

The Staff finds this distinction clarifying. A machine that costs more on day one can cost less per year, and a machine that costs less on day one can cost more per year. Both statements are true simultaneously, which is the sort of thing we compute because we compute everything, and which the box will never tell you.

To make the point concrete, consider two entirely hypothetical laptops. Laptop A costs, let us say, $1,000. Laptop B costs $1,400. On the box, A wins by $400, decisively, no further thought required. This is the analysis most people perform, and it is where most people stop.

The Arithmetic, Performed Without Enthusiasm

Here is the formula. It is not difficult. Its only requirement is that you refuse to stop at the sticker.

Cost per year equals purchase price, minus what you eventually sell it for, divided by the number of years you owned it. That is the entire equation. There is nothing hidden in it. It contains exactly three inputs — what you paid, what you recovered, how long you kept it — and it will embarrass the sticker price nearly every time.

Return to our two hypotheticals. Suppose you keep each machine four years — a reasonable, unremarkable span for a laptop that is cared for and not sat upon. Suppose, purely for illustration, that Laptop A is worth $250 when you sell it and Laptop B is worth $650. We are not claiming those are the real resale values of any product; they are placeholders, chosen so the machinery of the calculation is visible.

Laptop A: $1,000 paid, minus $250 recovered, is $750 of true cost, over four years, or roughly $188 per year. Laptop B: $1,400 paid, minus $650 recovered, is $750 of true cost, over four years, or roughly $188 per year. The Staff observed this coincidence and found it profoundly instructive: two machines, $400 apart on the box, identical in what they actually cost to own. The sticker had been lying by omission the entire time.

Change the assumptions and the answer changes — that is the point. If A holds its value poorly and B holds it well, B can be the cheaper machine despite costing more up front. If you keep a laptop two years instead of six, every dollar of the purchase price weighs three times as heavily, because you are spreading it across a third of the runway. Duration is a lever. Most buyers never touch it.

Resale Is the Term Nobody Includes

The second input — what you eventually recover — is the one people leave out entirely, and it is frequently the one that decides the contest. A machine that holds its value is quietly refunding part of its price to your future self. A machine that does not is charging you the full sticker and then some.

The Staff will state the one thing here that is uncontroversial and stable enough to say plainly: laptops depreciate at different rates, and the difference is not small. Beyond that, we decline to hand you a number, and we would gently suggest distrusting anyone who does without showing their work.

What We Are Not Going To Tell You

We are not going to invent a resale percentage and present it as measured fact. Resale values move — with the model, the year, the condition, the launch of whatever replaced it, and the particular week you happen to sell. A figure that was accurate in spring is fiction by autumn. Quoting one to four significant figures would be the kind of false precision the Staff finds distasteful, and worse, it would be wrong.

So instead, the assignment we hand you is a method, which does not expire:

Before you buy, look up what your specific candidate machines are actually selling for used right now — the current listings, the completed sales, the going rate for the exact configuration you are considering. Subtract that from the price you would pay. Divide by the years you honestly expect to keep it, not the years you fantasize about keeping it. The machine with the lower result is the cheaper machine, regardless of which one looked cheaper on the shelf.

Run it once and the sticker price will never again occupy the center of your attention. It will become what it always was: the first of three numbers, and the least interesting of them.

The Staff performed this exercise, computed the per-year figures on both sides, and filed the result under "obvious in retrospect, invisible beforehand." We noted it without enthusiasm. We note most things without enthusiasm. But we did note it.

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— The BuyGetRewards Editorial Staff