Depreciation does most of its work early, and that is what a second-hand buyer is buying

Value falls unevenly across an object’s life

Most manufactured things lose resale value on a curve rather than a slope. The drop is sharpest at the beginning, flattens through the middle years, and eventually approaches whatever the item is worth as parts or scrap. Cars are the familiar example, but the same shape shows up in furniture, instruments, tools, phones and almost anything with a second-hand market.

The reason is that the first owner is paying for several things that stop existing almost immediately. Newness itself, which cannot be transferred. The certainty of an unblemished history. The full unexpired guarantee. And the retail apparatus that got the item to a shop, which is a real cost and one no subsequent buyer will pay again.

None of those relate to how well the thing works. That is the whole basis of the second-hand argument: a large share of the early loss is the disappearance of things other than function.

The gap in price is wider than the gap in service

Consider an illustration, invented to show the arithmetic. An item sells new for 1,000, is worth 700 after a year, 520 after two and 400 after three. The first year cost its owner 300. The third year cost 120. If the useful life is ten years, the buyer taking it at two years old is giving up a fifth of the item’s working life and paying roughly half the price.

That trade is not always favourable and the numbers vary wildly by category, but the direction holds across most of them. Where the curve is steep, buying used converts money into remaining life at a better rate. Where the curve is nearly flat — some tools, some instruments, anything with a small production run and durable demand — the saving is small and may not be worth the search.

Which is why the question is not whether second-hand is cheaper. It is how steep this particular curve is, and how much of the remaining life is being bought.

What the discount is compensating for

A used item carries risks a new one does not, and the price gap is partly payment for accepting them. There is no guarantee, or a shorter one. There is no reliable history: how it was stored, whether it was dropped, whether the previous owner is selling because it has started misbehaving. There may be no recourse at all depending on who is selling and where.

Some of that uncertainty can be reduced. Buying from a trader rather than a private seller usually brings some protection, at a higher price that represents exactly that. Being able to inspect or test the item removes a large part of the unknown. Items with a serviceable history — anything that comes with records — trade at a premium for a legitimate reason.

The remaining risk is real and should be priced. A sensible way to think about it is to ask what proportion of purchases would have to go wrong before the saving disappears, and whether the household could absorb one that did.

Depreciation is a cost even when nothing is sold

A household that never resells anything still bears depreciation; it simply pays it invisibly, as the difference between what an item cost and what it was worth when it was finally discarded. Thinking about resale value is not only for people who intend to sell. It is a way of seeing how much of a purchase price is being consumed each year.

This is where the calculation joins up with cost per use. An item with a shallow depreciation curve and a long life is cheap to own even when it is expensive to buy, because so little of the purchase price is consumed annually. One that loses most of its value in eighteen months is expensive to own regardless of its ticket price.

The awkward case is the item that is cheap to own but that you use rarely, where an annual cost of very little is still money spent on something largely idle. Cheap to own and worth owning are different tests.

Where the argument breaks down

Second-hand buying has costs that do not appear in the price gap. It takes time to search, judgement to assess, and often a journey to collect. It rarely offers the exact specification wanted, which is why people compromise and then replace sooner. And in categories where technology genuinely moves — where an older unit is meaningfully worse rather than merely older — the discount is tracking a real decline in usefulness.

Hygiene, safety and fit rule out other categories entirely, and there are things most households sensibly buy new without doing any arithmetic at all. That is a defensible position rather than a lapse.

What the depreciation curve offers is a way to see which categories reward the effort. Steep early loss, long working life, easy inspection, and a market with plenty of supply is the combination where the saving is largest. Circumstances differ, this is arithmetic rather than a recommendation, and a purchase large enough to affect a household’s finances materially is worth thinking about more carefully than any general rule allows.