When you’re shopping for a diamond engagement ring, cost is an important consideration. If you’re considering either lab created or earth created diamonds, we can help you figure out what your costs might be.
How Much Do Lab Grown Diamonds Cost? 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. that means that lab diamonds could cost as little as $1,500 per carat.
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…
Why Are Diamonds so Expensive?
Lab created diamonds cost quite a bit less than earth created diamonds, but both can be quite an investment for many couples. Why do these little gems cost so much? There’s really a different answer for both types of diamond.
You might expect that mined diamonds cost so much because they’re super rare—turns out they’re not all that rare. Next, you might guess that they’re expensive because the process of mining costs a lot—wrong again. Yes, mining is relatively expensive, but DeBeers has released public documents, for example, showing that their production costs (per carat) for mined diamonds hovers around $100. That means they’re being sold at retail for a 3,000% to 5,000% markup…not bad (for DeBeers)!
Why such huge markups on mined diamonds? Because the producers and retailers have been able to get away with it. 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. I recently wrote an article about this psychological pricing strategy for mined diamonds. Click here to read it. The high cost of mined diamonds is the main reason that lab-grown diamonds are exploding in popularity right now though.
Lab created diamonds carry their price tag for an entirely different reason. The technology used to produce them is still pretty new. Technological advances help lower costs, but in the meantime, the materials used to make the diamonds is expensive. 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. Expensive equipment has to be replaced regularly as processes improve as well.
The cost of lab created diamonds isn’t static or increasing—it’s been decreasing. Bain & Company issued a report at the end of 2018 stating that the cost to produce a one-carat lab grown diamond through the CVD method in 2008 was $4,000, but ten years later (at the time of the report) has dropped to just $300 to $500. 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!
The Cost of Lab Diamonds vs Mined Diamonds
It’s one thing to state that lab cultured diamonds are typically 40-60% less expensive than earth mined diamonds, but I wanted to show you real-life examples. I started by choosing ten 1 carat lab grown diamonds. I selected a variety of gems that offered different types of color and clarity. 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. The following table shows how the cost for each of the ten diamonds varies for earth grown and lab-grown diamonds.
Cost Comparison for Lab-Created Diamonds vs Mined Diamonds
|Color Grade||Clarity Grade||Cut Grade||Lab Grown Diamond||Earth Grown Diamond||Lab Grown Savings|
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. Mined diamond resellers often mislead prospective buyers into believing that mined diamond hold their value after purchase, while lab-grown diamonds lose ALL value (100%) as soon as they’re purchased. 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.
- You hope that your marriage is happy enough that you’d never want to part with the ring.
- You’ll get far less than you think, and will probably be disappointed.
Essentially, ALL diamonds lose value once you purchase them from a retail location. 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 and sell at high-end international auctions. The diamond that you buy from a typical jeweler is a consumable—don’t expect appreciation, and you won’t be disappointed.
Is it Better to Buy a Diamond Online?
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 and diamonds that they can have on display at any given time.
In addition, not all local jewelers carry lab grown diamonds yet. Those that do, may have a relatively small selection available. 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. 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.
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!
One other major benefit of buying online is the return policy that many online retailers offer. You have a considerable period of time to evaluate your purchase and return it for a full refund if you change your mind. That’s a very different policy than most local jewelry stores offer. When you buy an engagement ring from a local retailer, they frequently accept no returns. That means that if you later change your mind, or plans change, you’re stuck with a ring that you won’t be using.
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. I certainly feel more comfortable making a big and important purchase when I know that it’s backed by a solid return policy.
What Should I Do if I Can’t Afford a Diamond Engagement Ring?
If even the lower costs associated with lab-grown diamonds can’t fit your budget, don’t get discouraged. There are some really great alternatives available at lower price points. 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.
Moissanite is a diamond simulant that I would recommend investigating as a starting point. It’s a really scratch resistant and durable stone that can hold up to years of everyday wear. While Moissanite isn’t diamond, it probably is the non-diamond stone that looks (and acts) most like a diamond.
For information on how the cost of Moissanite measures up against the cost of lab-grown diamonds, click here and review the article where I recently wrote comparing the two.
Another option would be financing the purchase. Most online retailers offer financing through a third party financing company. 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.
If you choose to finance, I’d definitely recommend that you stay as frugal as possible (don’t go overboard with the ring, simply because you don’t have to pay for it upfront). 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. You’ll probably be much happier when you purchase something somewhat conservative that you love and can pay off quickly.
Lab Diamonds are significantly less expensive than mined diamonds. 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. 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. The savings make a good thing even better!