Welcome to my blog! My son Jhuri Lamica, prior employee of 4-Star Dental from 2013-2015 took the time and effort to put his 2-years of "Dad's pre-owned Cerec tutelage" into "words of wisdom" in the Cerec world, a great educational tool for 1st time Cerec buyers. Despite Jhuri moving on to march to the beat of his own drum in the pre-owned Cerec business, I thank him for writing such an informative Blog that has been viewed by tens of thousands readers, enjoy!
Allow us to start by sharing a short snippet about the company behind this content- Joe Lamica and 4 Star Dental Equipment, Inc. We have been pioneers in the pre-owned CEREC business since 2004. Over this time, he received a world class education in the art of buying and selling used CERECs from the "University of Hard Knocks". This period of trial and error has empowered his company to be the leading experts and I'd like to share with you today and we sincerely hope this information spares you from making a costly mistake in the future.
Why buy used CEREC® technology?
This one is easy- the price! It's the same reason many consumers choose to buy a used car; because the right used car still has many years of useful life left and will cost you a fraction of the price of the latest model. The latest acquisition and MC XL unit from Sirona will cost you around $147,000 plus taxes and interest (assuming you do not have that kind of cash laying around). A loan of that magnitude will probably take you at least five years to pay off. What only veteran CEREC owners have come to know is that their $147,000+ investment is only worth about 20% of its original value at the end of those five short years. Even the automobile, well known for its depreciation, is still worth about 37% of its original price tag after five years according to edmunds.com. That means that CEREC units depreciate almost twice as fast as your car- astounding! But not surprising when you consider computer technology doubles its capability every two years.
There are many reasons for this depreciation phenomena and most of them lay with the manufacturer and their distributor. Their monopoly on the parts and expertise to repair the technology they sell allows them to charge whatever they see fit for repairs big and small. This serves them well, especially when making a service call to a customer whose equipment has just eclipsed the factory warranty period of two years (three if you've loyally subscribed to their service club membership for $250 dollars a month). After all, expensive repair costs on old products are great leverage for pushing new products. It is no coincidence then, that the rate of depreciation on a CEREC accelerates sharply after the factory warranty has expired. The risk associated with owning an out-of-warranty CEREC with potentially looming repair bills, despite the assurances of world-class German craftsmanship and a proven history of enduring performance, is still enough for many consumers to balk at the idea. The problem for the CEREC secondary market is, there are probably less than 100 used CERECs for sale at any given time in the United States and almost none of them are still within the factory warranty period. This is because many of the original consumers are still too far underwater on their loans to afford to part with it. This results in many low use CEREC systems entering the market after 5 years, typically when the loan has been satisfied. Many of these units have not been used in months, if not years, and simply have not been liquidated previously because the dentist would rather continue paying the monthly payment for what has essentially become an ornamental piece in their office than pay off the loan so they can sell the equipment and take the hit on depreciation. You'll see many used CERECs that have outdated software versions, sometimes several versions old, because their original owners discontinued the service club on the equipment to help stop the bleeding.
We would be remiss not to add that there is also something to be said for the general desire in dentistry to have the most up-to-date technology as it relates to CEREC depreciation. Just like all other things high-tech, the perception is that 5 year old technology is considered obsolete. Well, this technology is not your average personal computer or smart phone. CEREC technology is highly specialized with top of the line hardware that allows it to handle several years of software upgrades without losing performance or functionality. By now, you are probably well aware of the new Omnicam. The Omnicam's ability to create full color models via powder-less streaming capture is undeniably cool, but is it $20,000-$80,000 cool? Blue Cam technology is still very capable, was the best camera on the market for several years and produced excellent results. The release of the Omnicam changed nothing about the Blue Cam. In our opinion, if you are looking at this strictly from a cost perspective, you are better served buying a pre-owned Blue Cam.
Our overall view on the subject is this- the price tag on a new CEREC system is a potentially reasonable investment for a high volume practice that produces a few hundred restorations a year. However, there are a number of dentists and practices who purchased this technology brand new that do not come anywhere close to that kind of production. There are plenty of dentists who are just beginning their relationship with CAD/CAM technology and same-day restorations; are starting a new practice; acquiring an existing practice that did not previously use CEREC; are opening a second location; or are in similar situations wherein there is no experience or sales data to suggest that this technology will be used as much as anticipated. These situations lead to the availability of sparingly used CEREC technology on the secondary market. We have come across hundreds of lightly used 5-10 year old CEREC units that are still producing excellent restorations and likely have another 5-10 years of reliable use left. We believe that these CERECs are a gold mine for the consumer who can accept the marginal level of risk associated with owning used technology in exchange for the attractive price and return on investment potential. The rest of this article will dispel some common myths about buying used CEREC technology, help you identify good deals, avoid the pitfalls, reduce your risk and thus add value to your practice in a prudent and meaningful way.
Far and away the most common myth about buying used CEREC technology is that Patterson Dental will not provide you with service or support. This is completely untrue. Patterson Dental is required by Sirona to service and support all CEREC systems originally purchased in the United States. If your local Patterson representative suggests otherwise, get in contact with the local branch manager and/or Sirona directly to have the issue clarified immediately.
What we also hear is that you will not be allowed to join the service club if you buy a used CEREC. This is also untrue. You are allowed to join the service club and are entitled to software updates and its other benefits as if you were the original owner. Patterson has a form called a "Notice of Change in Practice Ownership" that serves as your proof to Patterson that you acquired the CEREC legitimately and it is essentially your license to join the service club. Think of it as your title. You should never purchase a CEREC without it. Well, almost never. If you are buying a CEREC 3 acquisition unit and mill, these units are quickly being phased out of manufacturer support, no longer receive software updates and are not worth the price of membership anyway. If the service club on the used CEREC you are considering has been previously terminated by the seller, you may be required by Patterson to pay a $2,500 "joiners fee" in addition to the regular monthly payments to get the CEREC back on the service club. If you are an existing Patterson customer considered to be a "whale account" (spend $25,000+ per year with Patterson) then you may only need to make a 3-year service club commitment.
The last myth on the list: the list price of a used CEREC is the best indication of its value. This is not true. Many used CEREC resellers have very little experience with what they're selling. You have to do your homework and gather all the facts to make your own assessment as to an individual CEREC's value. You will also want to research or ask a few background questions on the dentist and/or company you are purchasing the equipment from. Why does the dentist want to sell their equipment? Do they have service records? If buying from a company, do they have references, positive reviews or make any guarantees? Have they personally tested and evaluated this equipment? Is the equipment even in their possession? These are all things you want to know before you hand over your hard-earned cash. You can also call the original owner's Patterson branch and get service information straight from them. It is true that with any product, used or new, there is always the chance of a breakdown arising that was unforeseen to all. At least by doing your due diligence you have minimized this risk and can feel confident about your decision.
What does a good deal look like?
Sometimes, people avoid buying used because they have no clue how to determine if they are presented with a great deal or are getting the "mechanic special". There can be a huge gap in asking prices and this creates a lot of confusion and anxiety about the process, which drives consumers to pay tens of thousands of more dollars for new CERECs because they know what they're getting and can enjoy peace of mind with a warranty. Well, within our company we believe in operating debt free and that paying or going into debt $80,000 or more is a hefty price for peace of mind. The wise businessperson explores all of their options. Options are valuable. After all, you cannot make a good decision if you cannot find a good option. You know your business better than anybody else. We suggest you look introspectively at your practice and base your budget on what you can afford, not what you want to buy. The best deal is the one that satisfies most (if not all) of your needs and stays within your budget. If you cannot find a CEREC that fits your needs and your budget, then wait until you can increase your budget or make due with less. There are five basic things that you should always know before you buy CEREC:
1) What is this person/company selling? Are you looking at a CEREC AC Omnicam, a CEREC AC Bluecam or a CEREC 3 Redcam? Is that a Compact mill or an MC XL? This may seem simple, but it is step 1 and you'll come across many "used CEREC for sale" advertisements that leave out a lot of basic information, especially if the seller doesn't do this for a living. Note: we will not delve into the MC or MC X mills because you will rarely find them on the secondary market.
Here are some ballpark figures depicting what you can expect to pay for various CEREC combinations typically found on the secondary market:
a) CEREC 3 & Compact: $2,000-$7,500
b) CEREC AC Bluecam & Compact: $12,000-$20,000
c) CEREC AC Bluecam & MC XL: $32,000-$50,000
d) CEREC AC Omnicam & MC XL: $75,000-$120,000
Keep in mind that those numbers are presented simply to give you an idea of what others have paid and the actual value of the equipment depends on the factors outlined on this list.
2) What is the year of manufacture? For units manufactured in 2003 or newer, the serial sticker on the back of both the acquisition unit and mill will indicate the year of manufacture. You need to know how many years those moving internal components have been subjected to wear & tear, especially on milling units. The older the milling unit the greater potential for leaks caused by dried out hoses and gaskets. Here's a tip: look for signs of leaking fluid on a compact mill by inspecting or asking for a picture of the front panel pulled down. If you see brownish gunk along the edges or behind the face plate there's a good chance the hoses and gaskets need replacement. Stay away as this is not an easy fix and is a sign the unit is on its last leg! As far as the acquisition unit is concerned the model year will give you an indication of it's hardware capabilities, but not always. Read on...
3) What type of hardware series is the acquisition unit equipped with? This can be found by pulling off the back panel of the CEREC 3's and looking for a two letter code on the PC frame such as BA, CA, DA etc. It can be found on the lower back panel of the CEREC ACs. The higher the letter combination, the newer the PC series and the more powerful/capable the processing power, graphics card, RAM, etc. is. Many CEREC 3s have deceptively powerful hardware platforms if you were to consider the age of the unit alone. A 2003 CEREC 3 with an LA hardware upgrade is considerably more capable than the 2007 model with its original GA hardware. One sure sign of a hardware upgrade on an older CEREC 3 is the presence of a 17" monitor with a thin bezel. We have seen some CEREC 3 PCs, like the 2003 with LA hardware mentioned above, that are more powerful and capable than 2008, 2009 and even some 2010 Bluecams! These are a great find for the budget-conscious consumer looking for exceptional performance. If you are looking for a 2011 or newer Bluecam or an Omnicam, than the hardware series is not much of a concern.
PC Hardware/Year Correlation
The information below was compiled using data from hundreds of CERECs we've come across over the last 10 years. The first letter in the two-letter code will give you the PC Hardware series and the second letter will indicate where in the series this particular PC Hardware falls. For example, LA hardware can be found on 2010 CEREC PCs while LQ hardware can be found on 2012 versions of the L series. You can use this information to determine if/when the PC was upgraded.
L = 2010/2011/2012
K = 2009
H = 2008
G = 2007/2008
F = 2005/2006
E = 2004/2005
D = 2002/2003
C = 2001
B = 2000
4) What is the milling time (Compact) or number of units milled (MC XL)? This is probably the single most important piece of information you need to know before buying a used mill. It's like knowing the number of miles driven on a car. To determine the general number of mills on a compact we divide the number of minutes by 24. With both the compact and MC XL you should ideally try to stay under 1,000 mills or 24,000 minutes. A milling unit with under 500 mills is considered to be the cream of the crop so don't be afraid to pay top dollar for it! In our experience, the single most expensive repair on a milling unit generally rears its ugly head at around 2,500 mills. Minimize your risk and keep looking if the "milleage" is too high so long as you can afford it. If you choose to buy a high mill unit, ask for service records to see if the spindle rotors have recently been replaced. Having to pay for that repair yourself will quickly turn your bargain into a money pit.
5) What is the software version on the acquisition unit? This is very important and translates into immediate additional expense. If you are buying a red cam with 3.6 software or older, you will need to upgrade the unit to 3.85 to run the system optimally. You can find the necessary software version discs on eBay for a few hundred dollars. They do not require a license key. If you are buying a CEREC AC with 4.0 software or older, you will want to consider upgrading to the latest 4.3 software for optimum performance and up-to-date features. This is where it gets a little pricey. A 4.0 software CD with the license key and dongle will cost you around $500-$1,000 on eBay. A 4.2/4.3 software CD with the license key and dongle will cost thousands to purchase through Patterson if you are not on their service club, so be sure to check eBay for any deals there first. Also, before purchasing a blue cam with 3.8 or older software, verify the version of windows running on the PC. In order to install 4.0 or newer software on the CEREC, the machine must be running Windows 7 64-bit. If it is not running Windows 7 64-bit, you will need to upgrade the operating system before you can upgrade the CEREC software, which is an additional expense to consider when evaluating your offer.
Purchasing a CEREC system, used or new, is a significant investment in your practice. Of course, the more significant the decision the more time you should spend on gathering all the facts and the more thought you should put into making the call. Here's a brief recap of what was covered in this blog along with a few extra tips to save you a headache or two throughout the process.
Thank you for taking the time to read this blog entry and we hope you came away with something that will save you money on your quest for CEREC technology. 4-Star Dental Equipment, Inc. is happy to assist you with all of your Cerec needs, no matter if your buying, selling or need an appraisal. Just give us a call anytime 877-237-3228