At Lifetime Hearing-Denton we offer a value for your old/used hearing aids. How do we calculate your value of your hearing aids?
Typical depreciation on products can vary. The most common calculation is to take 100% of the MSRP (Manufacturer’s Suggested Retail Price), and divide that amount by the number of useful years of the product. This leads to the question “How long do hearing aids last?” In order to answer this there are several factors to take into account.
Some people can make a purchase of hearing aids that last for 10 years while others can lose their hearing devices two weeks after purchasing them. This is a very large spread, but after nearly 30 years of dispensing hearing aids, I have found that the average useful life of a hearing aid is still about three to five years.
When I first started dispensing hearing aids, my customers would ask “How long do hearing aids last?” Being new to the industry I asked my mentor this question. My Mentor had been dispensing for 28 years as an owner of a Beltone dealership in upstate New York. His response was “Well, don’t give your opinion on the matter. Do your own research using reliable resources, and then report your findings to your customers.” Later, I would learn that his advice was the best advice I could ever get especially in how to counsel patients correctly.
In 1988 Consumer Reports had made a survey about the longevity of several things and hearing aids were on that list. In that report it listed that hearing aids lasted 3-5 years with two repairs expected during that period. I also discovered that there were two known issues with hearing aids at the time: (1) moisture – hearing aids shorting out due to excessive sweat, or moisture getting inside the hearing aids and corroding the battery contacts, and (2) wax related problems causing the hearing aids to malfunction and stop working.
Manufacturers, well aware of these problems, made great strides in resolving them. They introduced replaceable receivers (speakers) on RIC (Receiver-in-the-Canal) products, and “Nanocoating. These developments virtually eliminated the problems of moisture and ear wax interfering with hearing aids.
Nanocoating is an extremely fine fibre woven material that can be applied to a product. It causes water molecules to cling to itself rather than penetrate a surface. Part of this technology was derived from a science called “Biomimicry”.
Biomimicry is defined as the design and production of materials, structures, and systems that are modeled on biological entities and processes. These scientific observations in nature (such as examining let’s say an aloe leaf) helps scientists to understand why water is repelled instead of soaking into the leaf. Scientific Engineers then duplicated that design using the same composition, to develop products that mimic nature. Nanocoating is commonly used today in the production of hearing aids by major manufacturers.
However, despite all the advances in technology, hearing aids still do last longer than back in 1992. The average lifespan of a hearing aids is still 3-5 about 3-5 years. So why is this the case, and what does this have to do with with my trade in value?
The answer is that technological advances have dictated the demand for new hearing aids rather than structural design alone. Hearing aids that are properly fitted and help people with their hearing problems don’t necessarily need to be replaced. But new technologies are constantly being integrated into hearing aids, for example listening to your phone conversations in both ears hands free while driving your car. Because these new technological advances make hearing aids so much easier to use, and more effective, people see the need to replace older outdated hearing aid models in order to keep up with the changes and benefits of the newer models. Hearing aids can now be manipulated through your Smartphone to quickly and easily make changes to your hearing aid settings in order to adapt to changing hearing environments. This development alone is pretty impressive and exciting!
So do folks trade in their perfectly good programmable hearing aids for new technology? The short answer is YES. In fact, they do this more frequently now than ever before, and as already mentioned, this is primarily due to the rapid advances in technology rather than the size, shape, or a functionality of the hearing aids themselves.
So what then is the value of my old hearing aids? Technically a business can offer you whatever it decides in order to make a sale. The truth is that older hearing aids have very little value due to the rapid changes in technology. However, for a clinic that offers second-hand or refurbished hearing aids free of charge to customers who simply cannot afford new ones, the trade in of older hearing aids becomes significant.
After some research we have found the expected useful life of a hearing instrument is no longer than 7 years. That being said to come to a valuation of the hearing aids, the common formula is to take 100% of the MSRP (Manufacturer Suggested Retail Price) divided by the number of useful years then multiply that by 20%. Or take the MSRP and multiply that times 20% then dived that out by 7 years. Using the national average of a high quality hearing aid (including warranty at the manufacturer but not including the aftercare provided by the servicing clinic) is about $2,300. (According to AARP in a 2015 survey. https://www.aarp.org/health/conditions-treatments/info-2016/hearing-aid-costs-prices-cs.html).
So, $2,300 x 20% = $460 if your device is 3 years old then multiply $460 x 3 =$1,380, then subtract that amount (depreciation cost) from the MSRP leaving the value at $920. But remember this will probably include at least one repair (in that time frame), so deduct the average cost for a hearing aid repair ($140 -$225). This leaves you with the value after 3 years of about $695 – $780. This is why you may see advertisements that offer $1400 -$1,500 for a set of old hearing aids. These clinics are giving trying to cater for the best trade-in scenario for all hearing aids because it’s just too much effort to do the calculations!