The Cost of Lab Grown Diamonds vs Natural Diamonds
by Dave Greene | May 18, 2019 | Man-Made Diamonds
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When you’re shopping for a diamond engagement ring, cost is an important consideration. that means that lab diamonds could cost as little as $1,500 per carat. Diamond cost depends on size and quality, but generally speaking, you’ll spend $3,000 to $5,000 per carat for earth mined diamonds. Lab created diamonds are typically 30% to 50% less expensive than mined diamonds. If you’re considering either lab created or earth created diamonds, we can help you figure out what your costs might be.
I’ll share side by side examples of specific diamonds (one lab-grown and one earth-grown), so you can see how the cost differs. I’ll also share information on other aspects of value that you’ll want to understand. Here we go…
Lab created diamonds cost quite a bit less than earth created diamonds, but both can be quite an investment for many couples. There’s really a different answer for both types of diamond. Why do these little gems cost so much?
You might expect that mined diamonds cost so much because they’re super rare-turns out they’re not all that rare. That means they’re being sold at retail for a 3,000% to 5,000% markup… Next, you might guess that they’re expensive because the process of mining costs a lot-wrong again. not bad (for DeBeers)!
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Why such huge markups on mined diamonds? The high cost of mined diamonds is the main reason that lab-grown diamonds are exploding in popularity right now though. I recently wrote an article about this psychological pricing strategy for mined diamonds. Also, because the high price tag has a psychological effect that makes you desire the item you see as exclusive (a status symbol). You might chase it even harder than you would if it were more affordable. Because the producers and retailers have been able to get away with it. Click here to read it.
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Lab created diamonds carry their price tag for an entirely different reason. Expensive equipment has to be replaced regularly as processes improve as well. The technology used to produce them is still pretty new. Where mining can tap cheap unskilled labor in 3rd world countries, diamond-producing laboratories have to have a highly educated, specialized, experienced, and expensive workforce. Technological advances help lower costs, but in the meantime, the materials used to make the diamonds is expensive.
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The cost of lab created diamonds isn’t static or increasing-it’s been decreasing. Those savings from technological advances are largely be passed on to consumers, so the price gap between lab-created diamonds and mined diamonds is likely to continue increasing!
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The Cost of Lab Diamonds vs Mined Diamonds
I started by choosing ten 1 carat lab grown diamonds. I selected a variety of gems that offered different types of color and clarity. The following table shows how the cost for each of the ten diamonds varies for earth grown and lab-grown diamonds. I then went to a favorite online diamond retailer and found mined diamonds that were exact matches in terms of size, color, clarity, and cut grade.
Cost Comparison for Lab-Created Diamonds vs Mined Diamonds
As you can see, the laboratory diamonds are almost always at least 40% less expensive, but some can offer discounts of over 60%!
The Cost of Depreciation for Lab Diamonds vs Mined Diamonds
The initial loss of value could be viewed as a cost associated with buying a diamond-almost any diamond. Both of those beliefs couldn’t be more wrong.
You shouldn’t plan to resell the diamond from your engagement ring or wedding ring for a profit at some future point.
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A slightly used diamond may look unworn, and come with its original box, warranty, and paperwork, but it’s still going to sell for 30% to 70% less than you paid for it as a used ring (or diamond) in most cases. Even if you hold the diamond for decades before reselling, your inflation-adjusted sale price will likely create a loss.
Diamonds are not an investment most of the time. Having said that, there are some very rare and exclusive diamonds that consistently appreciate, but that’s the exception, not the rule. Those are diamonds that cost hundreds of thousands or millions of dollars. The diamond that you buy from a typical jeweler is a consumable-don’t expect appreciation, and you won’t be disappointed. Sell at high-end international auctions.
If variety and price are important to you, then buying your lab created diamond online is going to be your best option. When you visit a local jeweler (even a large one) there are obvious restrictions to the number of rings. Diamonds that they can have on display at any given time.
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In addition, not all local jewelers carry lab grown diamonds yet. Local jewelers simply don’t have some of the cost benefits of scale that online retailer often have. There can also be more middlemen involved with the gems that your local jeweler displays, driving cost up. Those that they do have on hand may not have the size, color, clarity, or cut characteristics that you want-and they’re going to be a lot more expensive than those you find online. Those that do, may have a relatively small selection available.
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Cost is a really important factor, but beyond cost, online retailers have massive selections, so you’re more likely to find the shape, size, color, clarity, and cut combination that’s the absolute perfect fit!
That’s a very different policy than most local jewelry stores offer.
One other major benefit of buying online is the return policy that many online retailers offer. When you buy an engagement ring from a local retailer, they frequently accept no returns. You have a considerable period of time to evaluate your purchase. That means that if you later change your mind, or plans change, you’re stuck with a ring that you won’t be using. That’s a very different policy than most local jewelry stores offer. Return it for a full refund if you change your mind.
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In contrast, my favorite online retailer for lab-grown diamonds provides a 100-day return policy on all their gems. My favorite online retailer for mined diamonds offers a ‘no questions asked,’ 30-day money back guarantee.
If even the lower costs associated with lab-grown diamonds can’t fit your budget, don’t get discouraged. It’s a really scratch resistant. They can either be used as a permanent solution or something more temporary-allowing you to swap out for a lab grown diamond or mined diamond several years down the road. There are some really great alternatives available at lower price points. Durable stone that can hold up to years of everyday wear.
Another option would be financing the purchase. Most online retailers offer financing through a third party financing company. There’s sometimes a tendency to spend a lot more when purchasing on credit. You might normally be happy with a .75 carat lab diamond, but since you got approved for credit, you upgrade to the 2-carat diamond, for example. I think it’s a better idea to get a ring that you can afford without financing-even if you have to get a smaller ring for now. You’ll probably be much happier when you purchase something somewhat conservative that you love and can pay off quickly.
In Summary
There’s also really no downside to purchasing a lab created diamond over a mined diamond, since no one can visibly tell the difference, and they’re equally hard (scratch resistant) and durable. The savings make a good thing even better! If you ultimately decide to purchase a lab created diamond, you might be able to use the money you save to cover other wedding expenses, upgrade your honeymoon, pay off debt, or save a little cash for future needs.