Monday, October 24, 2011

Repair or Replace?

Stephen Pollan advises repairing, rather than replacing things, to save money.  Is this always good advice?

In his book Die Broke, Stephen Pollan relates as to how the keyboard on his "Mac Plus" (those were the days!) broke, and the local dealer wanted $200 to fix it - and suggested buying a new computer instead.  Pollan argued it was cheaper to fix the old computer - and recommended repair over replacement.  So he spent a whopping $200 to have a keyboard repaired.

Since those days, computers have become astoundingly cheap.  Today, $200 can buy a whole new computer.  Even laptops - good ones - can be had for under $400, provided they are not Apple products (Apple products are astoundingly expensive, negating any savings in "ease of use" - but that is the subject of another posting). So, spending $200 to repair a computer might be foolhardy.

The conundrum of repair or replace is never an easy decision.  Repair costs have skyrocketed, usually because of labor costs.  And parts costs are high as well these days - in many instances.  Products, particularly electronics, not only wear out, they become obsolete quickly.  Throwing money at an old computer, car, or washing machine often doesn't make sense.

Why is this?  Well, for starters, new equipment can be cheaper than repairs.  To repair a machine, someone has to drive out to your home (or you have to take the equipment to them) and then they need to diagnose the problem (often the hardest part), disassemble the product using hand tools (also difficult) and then replace the part, which may not be available, or may be very expensive, unless it is a wear part, and then reassemble the device.  Labor rates these days are anywhere from $50 to $150 an hour.

As we discussed in the Waddington Effect, any repair has, as its natural consequence, the prospect of creating new problems.  Screws will strip out, spark plugs snap off in the head.  You let slip a screwdriver and it goes right through the radiator.  And this is true for all equipment - whether it is a home appliance, a car, or a computer.  You risk creating more harm anytime you take something apart.

On the assembly line, in contrast, the parts are all readily available, and cheap to the manufacturer.  Labor is cheaper as well, as each person in the process has a defined job, the correct power tools, and can quickly assemble the item - if the work is not in fact automated.

So the cost of repairing a $400 computer can easily approach $400 - the cost of a new computer.  If the computer is more than a few years old, what really is the point?

There are only two ways around this conundrum.  One is to be able to fix things yourself.  And you'd be surprised how many people can fix things and not realize it.  For example, Mr. Pollan went to a computer dealer (probably a Mac dealer - ouch!) who has a vested interest in selling new computers - to repair a keyboard.

The deal is, keyboards are cheap.   A new keyboard for a PC can be had for $10 at WalMart (another reason PCs rock and Macs suck).  But even for a Mac, Mr. Pollan could have probably found a keyboard online for less than $200 and plugged it in himself.  A used one could be even less.

Far from being a difficult item to repair, it was actually easy.  Pollan fell into the trap of thinking that the keyboard was somehow expensive to repair, when in fact, it could be replaced rather quickly and inexpensively - without a lot of technical expertise.

Pollan fell into the trap of believing that something that had little value (a keyboard) had a large value.  And I've done the same thing, myself.  Coming from the early days of computers, when every component was expensive, I also fell into the mindset that computers were "expensive" as well.  Back in 1995, about the same time Pollan's Mac broke, I also had a keyboard go beserk.  I asked a local computer guy about fixing it, and he said, "Why not just replace it?" and I said, "Well, that would be too expensive!"  But then he explained to me that things like keyboards and mice could be had for only a few dollars - and thus were not worth fixing.

More and more these days, repairing a device means less of individual part repairs than component replacement.   Oftentimes parts are not available individually, but only as sub-assemblies that are replaced as a unit.  While this may seem scandalous at first, often these sub-assemblies are cheap, and also much easier to install.  Just plug it in, and move on.

But more complex repairs require more repair skill - and for many people, these skills are beyond their apparent abilities - or so they tell themselves over and over again.  In our Cargo Cult Culture, most people these days can't even change a flat tire - judging from the number of cars we see abandoned on the Interstate, or the puzzled looks most folks seem to have when they get a flat.

But it is possible to repair some things, inexpensively, without being a mechanical whiz.  If you grew up in the computer age, you probably know how to format a hard drive and install an operating system.  Putting a new hard drive in a computer and reinstalling the O/S should not be a major chore.  The computer I am using right now has a replacement hard drive that I installed myself.  It took maybe a few hours and the new hard drive was about $100.  And I replaced the graphics card with one from eBay ($25, God Bless Gamers and their constant need to "upgrade" their machines and toss out perfectly good parts!).  These are not super-hard things for a hobbyist to do.

Of course, that is on a PC.  A Mac is not so easy to fix, and a trip to the "Genius Bar" will cost you $300.  But again, that is the subject for another posting.

But there does reach a point where a machine is worn out and not worth fixing.  And again, this is where technically unsophisticated people get screwed.  As I noted in an earlier posting, car dealers are using this strategy to take car repair customers and turn them into car sales customers.  They present a ludicrous and padded bill to the customer ("If you want everything repaired right, including the ashtray light, it will cost $5000!) and then use this as leverage to sell a new car.

On the other hand, technically unsophisticated people will also throw thousands of dollars at an old car and then get frustrated when yet something else breaks.  Once a machine reaches the end of the Weibull curve, it is time to throw it away and start over.

And ironically, the technically unsophisticated consumer often gets screwed both ways.  They may own an older car when they are in their 20's, and when it wears out, they throw money at it - thousands of dollars - in a fruitless effort to keep a 200,000 mile Corolla alive.  With their next car, they think, "I'll never make that mistake again!" and they toss away a serviceable car before its time is due.

The problem is, if you lack technical skills, all of these things will be a mystery to you, and life in a technological society will suck - or cost a lot more than it should.  For example, I have an aging BMW X5, which is an interesting car, but like any BMW is prone to breaking down.  Folks who think they are wealthy buy these cars and then get upset when they realize that (a) they really aren't wealthy and had no business buying $50,000 to $75,000 cars, and (b) that they are just cars, and once out of warranty, they can break down and be expensive to repair.

So that type of BMW owner gets all whiny and says things like, "Well, you'd think that a luxury car like this would be put together better than this!  They should fix it for free!"   And I am not picking on BMW here - insert the words "Cadilliac", "Mercedes", or "Jaguar" in its place and the effect is the same.

The windows on these cars can fall out - it is a common problem.  A small 99-cent plastic clip breaks and the window falls down.  Actually, this sort of thing happens to a lot of cars as they age - but people with expensive cars get pissed off.  People with cheap cars expect it.  It was not hard to remove the door panel and replace the 99 cent clips.  And I found that if you don't slam the doors a lot, the clips actually do last a good long time.

But to the yuppie purchaser, who cannot figure out how a paper clip works, this is all nothing short of magic.  So they trundle off to the dealer (ouch!) and pay $500 a door to have the entire guts replaced.  For them, "repair" is not a cost-effective option.  And it is easy for the dealer to convince them to toss away a workable car in favor of a new one.  Of course, someone buys that old car, replaced the 99-cent clips, and re-sells it - for a lot less than the $500 labor cost.

So, what does this all mean?  Should you repair or replace?

Well, for starters, it means you should own less crap - particularly if you are not handy with tools and such.  The more stuff you own, the more you will have to repair or replace over time.  And the easiest way out of this is to own less.

As I noted in another posting, I decided to "downsize" after I realized I owned eleven refrigerators (including the vacation home, rental condo, house, garage, boats, camper, bar, etc.) and ten toilets (same deal).  And even maintaining these myself, they were a lot of work and expense.  A house with four bathrooms is nice, until they all need new toilet valves at the same time - which they usually do.

The second thing is to get handy.  The more you can do small repairs by yourself, the more you will save - and save a lot.  There are Adult continuing education courses out there on how to fix computers, tune up your car, or whatever.  If you don't have skills, considering trying to get some.  It pays for itself.

The third thing is to know when to quit - but not quit too soon.  Every product has a life-cycle, and no, this is not always "planned obsolescence" but a natural part of Engineering.  You can design something to last forever (and it still won't) or you can design it to be reasonably priced.  Rarely can you do both.  And knowing when to quit is going to be a function of your repair skills.  While I can nurse along an older car and keep it running for many years, if you have to visit a mechanic every time the slightest thing goes wrong, well, you'll be bankrupt in no time.