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Were you born under the "Clearance" sign? If so, you know how satisfying bargain hunting can be. But when you're shopping for a computer, taking the cheap route requires caution. Budget PCs make great choices for some people--especially given today's lineup of systems priced below $1000 (and some below $500) from industry veterans such as Dell, Gateway, and Hewlett-Packard. These lean, mean machines can fit right in as an inexpensive family system or as a second home PC.

But a cheap computer is a bad investment if it doesn't keep you happy for at least two years. Will the cheap PC you buy today have the memory, hard disk space, and other features needed to do the things you'll want to do with your system down the road? Heck, some inexpensive models skimp so much on the warranty and technical support that getting even two years of solid service from them could be a gamble unless you're a hands-on, fix-it-yourself type.

Budget PCs don't have the fastest processors and main memory--components that need to be speedy if your interests run to tasks like home video editing. Nor do these computers have the tricked-out graphics cards that gaming fanatics require for smooth, fast game play. Design is definitely an afterthought on cheap models: Think drab and boxy. Finally, some budget PCs lack multiple upgrade slots or bays for possible future needs, so if you hang onto your technology for a long time, you may someday feel as if you had bought a dresser that didn't hold very many clothes.

With PCs as with most other major purchases, assessing your personal habits and preferences is important when deciding how much to spend. A $500 computer and a $1500 computer differ considerably--even if you can't tell the difference by looking at them.

Before sniffing around bargain basement offers, make sure that at least one of the following is true:

  • I use my PC mostly for Microsoft Office-type applications, e-mail, and Web browsing.
  • I don't care what the computer and monitor look like.
  • I tend to buy a new PC every two to three years.
  • I don't try to impress dates or neighbors by showing off my PC's features.

On the other hand, if any of the following are true, you may want to think twice about buying a cheap PC:

  • I do intense database or video editing work.
  • I want to play the latest games on this PC.
  • I want a sleek-looking PC to match my home decor.
  • I hang onto a PC for a long time.

If you know what you need, you can find a great deal on the PC of your dreams. I've done it. Here's how.

Troll the Big Names for Big Bargains

Ready to shop? Not long ago, you had to check out little-known catalog or online vendors to find real PC bargains. But today, you don't have to risk buying from a vendor you don't know much about. You can purchase a cheap system from one of the big names of the industry. For example, Dell's Dimension line starts at around $499 after rebates.

Right now at Dell, $499 buys a system with a 2.66-GHz Pentium 4 processor, 128MB of RAM, the Windows XP Home operating system, a 40GB hard drive, CD-ROM and CD-RW drives, and a 17-inch CRT monitor.

Now that Gateway has merged with EMachines, which was famous for its low-priced PCs, the company has dished up a tasty new menu of options. For example, for $510 after rebates, the EMachines T2824 desktop gives you a 2.53-GHz Intel Celeron D 325 processor, 256MB of RAM, a 40GB hard drive, a combination DVD-ROM and CD-RW drive, and a 17-inch CRT monitor.

Warning: Rebates can be a bother. You have to save paperwork and receipts, make copies, mail them in before a deadline, and then cross your fingers and hope that the check arrives within a couple of months. If the check doesn't show up, pursuing the matter with the vendor is usually fraught with difficulty. Unfortunately, you'll probably have to deal with a few rebates, since they're a popular marketing ploy in this PC price range. When taking stock of a rebate deal, consider the company offering it. For example, Dell has a reputation to maintain, so the company is likely to handle rebates relatively responsibly.

Make Smart Chip Choices

To get the most bang for your buck, look for systems with AMD processors instead of low-cost Intel Celeron processors. AMD Athlon XP-based systems tend to run as fast as or faster than their Intel Celeron-based counterparts, though when you're using Microsoft Word or Excel, or Internet Explorer, you won't notice any difference.

For instance, HP's Pavilion A610e series machines start at $450 after rebates, with a 17-inch CRT monitor. Though the least-expensive systems in this series use the somewhat-dated AMD Athlon XP 2500+ chip, you'll find good power for the money if you choose a model that carries a powerful Athlon XP 2800+, 3000+, or 3200+ chip.

Skip the Cheapest Configuration

Crafty bargain hunters ignore the absolute cheapest PC configuration, despite its tempting price tag. Rock-bottom configurations are designed to draw potential customers into the store or onto the Web site, so they'll start shopping. For a better value in most cases, look at the next model up the price chain. For example, Dell's $599 Dimension 2400 model comes with 256MB of RAM and a two-year warranty--twice the RAM and double the warranty period of the $499 model. The extra $100 is well worth spending, since RAM can make a big difference in your PC's stability and performance, and since enjoying peace of mind for an extra year can be priceless.

For many people, the next sweet spot for a tempting mix of power, upgrade room, and acceptable warranty lies in the $700-to-$800 range. Remember, a single upgrade item and one repair during the lifetime of a PC can easily cost another $200. Therefore, your $599 PC may end up costing you $799. Think carefully about whether $799 is what you should spend $799 at the outset and have more PC all along.

Warning: Always check to see whether a bargain PC configuration includes the monitor in its advertised price. Many vendors tout low prices that look graet until you realize that they don't factor in the cost of a monitor.

Ask What's Missing

A bargain PC is no bargain if you get stuck with future costs or encounter aggravating roadblocks to upgrades, so you need to understand a system's limitations and decide how important they are. A typical budget PC doesn't have a huge hard drive. No biggie? Just remember that some of the smallest MP3 players sold today come with 15GB hard drives. If you rip CDs or store a lot of digital pictures, hard disk size is important.

In addition, cheap PCs normally lack fastest-burning drives for CDs and DVDs--limitations that patient PC owners can usually stomach. And they often skimp on audio systems and graphics cards, which won't matter much if you don't play games on your PC. If you've never cracked open a PC case, though, you could be in a bind in December when a well-meaning relative gives your kids the newest Spiderman game and your system can't play it adequately without a better graphics card.

Warning: Some budget PCs rely on graphics chips integrated on the motherboard in place of a graphics card--and may not even include a slot where you can add a graphics card. If there's any chance that you might want to upgrade later, double-check this feature when you shop.

Warning, part 2: If you expect to work on the PC for hours at a time at home, don't buy a bargain PC equipped with a cheap, low-quality monitor. Your eyes will thank you.

Research the Warranty and Reliability

Make no mistake: Technical support will cost you. In general, the higher the PC's price, the longer its warranty. For instance, Dell's $849 Dimension 2400 model comes with a three-year warranty. Meanwhile, with the HP Pavilion A600y series, moving from a one-year to a two-year warranty costs $70.

Though I'm not a fan of extended warranties from chain electronics stores (since they may or may not back those warranties with good service), a two-year warranty from a reputable PC vendor makes a big difference. Even if you're willing to roll the dice, don't accept less than a one-year warranty.

You also want the most reliable PC possible you can buy in the first place so (hopefully) you don't have to call tech support in the first place. Who's on top right now? eMachines used to be known for reliability troubles, but the company seems to have turned around its quality problems, and earned good marks from customers who responded to PC World's most recent Reliability & Service survey. In that survey, which queried more than 32,000 readers about their PCs and peripherals, Dell and Gateway also earned good marks overall for reliability; Compaq and HP earned fair marks. See the accompanying article "Reliability and Service" for more.

Consider Relocation

When you're shopping for a PC, where you buy it depends more on comfort and convenience than on price. Surprised? The fact is, you can find deals through any of today's main buying avenues: calling the PC vendor directly, using the vendor's Web site, visiting a mass-merchant store like Circuit City or Best Buy, or traveling to a warehouse club like Costco or Sam's Club.

I find shopping online simplest because it simplifies the task of comparing models and prices. On the other hand, some people like to touch the PC; and others prefer to shop at a local store because they expect that returning the PC if it has a problem will be easier. The decision comes down to your personal comfort level.

Warning: You'll have fewer configuration choices at a chain store, and precious few at a warehouse club. When shopping online or by phone, you can configure the system and adjust its price any way you like. And you won't pay for options you don't need.

Warning, part 2: If you do shop at a chain store or warehouse club, don't take the word of a salesperson if you have questions about the PC. The salesperson you're dealing with may be on loan for the day from the toaster or coffeemaker aisle. Go home and do your research online--or call the vendor's sales line--to nail down the difference between two similar-sounding graphics cards, for instance.

Refurbs, Floor Models, and Used PCs: Tread Carefully

True bargain stalkers may tell you about refurbished PCs. These are systems sent back to the vendor, repaired if necessary, and then sold at a discount. Since the return and warranty policies are often quite short, I recommend against this option unless you are comfortable taking apart a PC when trouble arises. You'll also see floor models or returns being sold "as is" at the mass merchant stores. Avoid these entirely. You don't need the hassle if the PC has a problem.

At the extreme edge of the cheap PC universe are used PCs. The safest way to buy a used PC is from a local store that you know will help you if the unit behaves like a lemon. Make sure that the hard drive has been completely wiped and the operating system reinstalled; some of today's nasty worms and viruses can stick around undetected for years on a hard drive. You don't want to be their newest host.

In fact, you don't want to be the victim of any cheap PC nightmare. There are plenty of terrific deals out there, and you can find them if you do your homework and avoid being lured to a system that doesn't match your computing needs. Remember, you get what you pay for. When it comes to PCs, that adage is especially true.

See "Top Budget PCs," which accompanies this article, for PC World's rankings of the eight best desktop PCs priced at under $1800. See "Reliability and Service," also accompanying this article, for a summary of consumer satisfaction ratings for various PC vendors, taken from PC World's most recent Reliability and Service Survey.

Formerly a senior editor at PC World and Business 2.0, Laurianne McLaughlin is a frequent contributor to technology publications.

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