Is it Cheaper to Build or Buy a New PC?

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1. Introduction and Goals

2. Choosing and Finding Computer Parts

3. Budgeting and Shopping for Computer Parts

4. Comparing Dell's Price to Build Price

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Comparing Dell's Price to Build Price

I visited Dell's site to see what my perfect workhorse system cost prebuilt. Usually, I always save at least $500 building my own systems compared to what retailers charge.

The first thing I noticed when I visited Dell's site is that specifications of the systems being offered have changed. RDRAM systems now have speeds up to 1066 MHz (vs. 800 MHz before) and DDR RAM systems now have speeds up to 333 MHz (266 MHz before).

I can only conclude that Dell is using motherboards with the newly released Intel chipsets, and more than likely, they are using the new Intel motherboards.

Great, now I can get a really good comparison on what it costs to buy and build my perfect system.

So I began customizing a Dell Dimension 4550 to give it all the features of my perfect workhorse system. The following table shows what my perfect system priced out to.

Pentium® 4 Processor at 2.53GHz with 533MHz system bus/ 512K L2 Cache

Qty: 1

Unit Price: 1,214.00

Memory	512MB DDR SDRAM at 333MHz
Keyboard	Logitech Wireless Keyboard and Mouse Solution
Monitors	No Monitor
Video Cards	New 64MB DDR NVIDIA GeForce4™ Ti 4200 Graphics Card with TV Out and DVI
Hard Drive	20GB Ultra ATA/100 7200RPM Hard Drive
Floppy Drive	3.5 in Floppy Drive
Operating System	Microsoft® Windows® XP Professional
Mouse	Mouse already included in Logitech Wireless Package
Network Interface	Integrated Intel® PRO 10/100 Ethernet
Modem	56K PCI Telephony Modem
CD or DVD Drive	16x Max DVD-ROM Drive
Sound Card	Integrated Audio
Speakers	Harman Kardon HK-395 Speakers with Subwoofer
Software Bundles	Microsoft® Works Suite 2002 w/Money Standard
Digital Music	Dell Jukebox powered by MusicMatch
Digital Photography	Dell Picture Studio, Image Expert Standard
Limited Warranty, Services and Support Options	1 Year Limited Warranty plus 1 Year At-Home Service
Internet Access Service	6 Months of America Online Membership Included
Mail-In Rebate Offer	Save $50 with mail-in rebate! System Price shown before rebate.
Accessories	Wingman Extreme Digital 3D
CD or DVD Burner for 2nd bay	FREE Upgrade! 40x/10x/40x Max CD-RW Drive

Amazingly when the entire system is priced out at Dell, the total price is $1214, before $50 rebate, or $1164 after rebate and shipped to my door.
So compared to what it would cost to buy my perfect system from Dell, I would save $34 by building the system myself. I really found this hard to believe!

Now you may have noticed I included a faster processor (a 2.53 GHz Pentium 4 instead of a 2.40 GHz) and a smaller hard drive (a 20 GB instead of a 40 GB) on the Dell system. I did this because I dug up a 80 GB ATA 100 drive which I could slave to the primary hard drive, so I decided to maximize my computer dollar by including a faster processor and smaller hard drive.

Also note that at the time I priced out this system Dell had free shipping, free CD or DVD drive, and a $50 rebate offer. They have different sales all the time so you might pay more or less then my calculated price.

Added Benefits of Buying Instead of Building

While I thought it was pretty amazing to have a retail computer price come so close to my build price, there are also several other perks that come with the Dell system that were not part of my build calculation.

1. Windows XP Professional - I was going to use Windows Me on my old system and put my copy of Windows XP Professional on the newly built computer so no budget was allocated to buy Windows. However, I priced the Dell system with Windows XP so it is basically free.

2. DVD drive and modem. Again not included in my buy calculation but added in the Dell system. I use DSL so no modem is needed.

3. Free 6 months of AOL - I have Earthlink for the kids, but since it's free I'll switch to AOL and save $120 in ISP fees.

4. Free 1 year warranty. While purchased parts all have 1 year manufacturer warrantees it is nice to only have one party to deal with if something breaks.

5. My time to build it. It would take me at least 8 hours to build the computer and load all the software.

If I put a price on all of these added benefits, buying from Dell is much cheaper than building my own system.

And the Winner Is ...

Dell wins. Then can do it cheaper than I can, plus there are many added benefits from letting them build the system.

I would have never thought it would be cheaper to buy a system from Dell then to build it myself. Maybe like car companies, Dell has cut their profits way back in order to keep their sales levels up.
Whatever the reason for the low prices, I suggest your price out your next computer build at Dell or your favorite computer company, and see if they can build your next "perfect computer" cheaper than you can.

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