No, downsizing is not about selling a bigger home and buying a smaller one, nor is it a term used to substitute your current diamond for a much smaller one. Downsizing means shopping for diamonds that are just under a half carat (0.5ct) or just under a full carat (1.0 ct) in weight to save a lot of money.
For example, if you are like a lot of people, you are considering buying either a 1 carat (100 point) or ½ carat diamond. So downsizing means that you buy a .90 carat or .45 carat diamond.
What’s the price difference? Well let’s look at the price at our favorite discount diamond online diamond store, James Allen (1)?
Diamond 1: 1.00 carat, VS1 clarity, G color, ideal cut: $6220
Diamond 2: 0.90 carat, VS1 clarity, G color, ideal cut: $4920
Diamond 3: 0.50 carat, VS1 clarity, G color, ideal cut: $1450
Diamond 4: 0.45 carat, VS1 clarity, G color, ideal cut: $1110
(1) It’s been our experience that James Allen is about 35-40% under retail prices, so if you are buying a diamond at a traditional brick and mortar store, expect the price to be about 40% more, but the price relationship to hold.
You can see from the price differences that a 10% decline in the size of the one carat diamond leads to a price difference of about 25%. The difference grows to 30% on the ½ carat diamond!
The most interesting part is that downsizing does not dramatically change the size of a diamond. Using the examples above, the width difference (again straight from James Allen’s website) is about 0.2mm difference. This is about the thickness of a piece of paper.
Why does it work this way? Because of supply and demand. Most people would rather buy a 1 carat diamond than a 0.99 carat diamond because in their mind it is not a full carat. Yet, almost no one can tell the difference when looking at the stone. Downsizing is a great way to save money and get a high-quality diamond in the process.