The refurbished-vs-new decision is rarely as simple as the headline price difference suggests. Refurbished equipment saves substantial capital cost up-front. The question is whether that saving holds up once five years of service contracts, parts replacement, and end-of-life timing are modelled properly.
This article works through a representative example — a [Stryker 1488 AIM laparoscopy tower](/brands/stryker) — to show the actual five-year P&L difference.
The setup
Same hospital, same case volume, same OR. Two scenarios:
- Scenario A: New Stryker 1488 AIM purchased OEM-direct with 1-year warranty.
- Scenario B: Refurbished Stryker 1488 AIM through ASQ's 8-step refurbishment programme with 12-month parts-and-labour warranty.
Both scenarios assume 1,200 minimally-invasive procedures per year — typical mid-volume tertiary hospital throughput.
Year 1: Purchase + installation + early operations
| Line item | New | Refurbished | |-----------|-----|-------------| | Equipment purchase | $185,000 | $78,000 | | Installation + commissioning | $4,500 | $4,500 | | Initial training | $2,500 | $2,500 | | Year-1 consumables (camera covers, reprocessing, scopes pool) | $24,000 | $24,000 | | Year-1 service (under warranty) | $0 | $0 | | Year 1 total | $216,000 | $109,000 |
Refurbished saves $107,000 in year 1 — roughly 50% of new pricing.
Years 2–5: Service contracts, parts, consumables
| Line item | New (annual) | Refurbished (annual) | |-----------|--------------|----------------------| | Service contract (comprehensive) | $14,800 (8% of purchase) | $9,400 (12% of purchase) | | Camera-head wear replacement | $0 (covered) | $1,500 (1× over 4 years) | | Light source bulb / LED service | $1,800 | $1,800 | | Consumables | $24,000 | $24,000 | | Software updates | $1,200 | $1,200 | | Annual ongoing | $41,800 | $36,400 (avg) |
Service-contract pricing as a percentage of purchase price is typically higher for refurbished (12% vs. 8%) — refurbished service contracts price in older parts and slightly higher fault rates. In absolute dollars, refurbished service is still cheaper because the base purchase price is lower.
Years 2–5 totals
- New: 4 × $41,800 = $167,200
- Refurbished: 4 × $36,400 = $145,600
Five-year cumulative
| | New | Refurbished | |---|-----|-------------| | Year 1 | $216,000 | $109,000 | | Years 2–5 | $167,200 | $145,600 | | 5-year total | $383,200 | $254,600 |
Refurbished saves $128,600 over five years — roughly 33% lower total cost of ownership.
What this model doesn't capture
Two factors worth flagging:
- End-of-life timing. New equipment has 12–15 years of useful life; refurbished extends roughly 8–12 more years from refurbishment date. Replacement cycles are slightly different. If your hospital is on an aggressive depreciation schedule, model the replacement timing into year-7+ planning.
- Trade-in residual. New equipment retains higher trade-in value at end-of-life than refurbished. This recovers some of the up-front cost difference at year 12+.
Even adjusting for these, refurbished is the financially-stronger choice for hospitals not constrained by depreciation rules requiring new equipment.
When new makes more sense
Three scenarios where new is the right call:
- Aggressive capital-depreciation rules (some private-equity-backed hospital chains) require new equipment to capture full depreciation.
- Cutting-edge feature requirements — if your team needs the latest-generation capability that hasn't entered the refurb market yet (Stryker 1788, current-generation 4K platforms with proprietary imaging modes).
- Manufacturer-direct service relationships that depend on new-purchase status.
For most other procurement scenarios, refurbished delivers materially better economics. Our [equipment-sales](/services/equipment-sales) and [maintenance](/services/maintenance) services structure both options openly — the math is the math.