Have you ever wondered why lab-grown diamonds are so much more affordable than mined diamonds? We have, and we've done the research for you!
Lab-grown diamonds have increased in awareness and popularity over recent years, but to many, they’re still a bit of a mystery.
Most people understand that lab-grown diamonds are grown in a lab through a process that replicates how mined diamonds are created on the earth. But after that, it can all get confusing, especially when considering why they’re so different in cost.
Thus, we’ve broken down all the information you need to know about the cost of lab diamonds vs. mined diamonds and tips on making the best choice for your preference.
We'll share with you the factors that affect the price of lab-grown vs. mined diamonds.
Factors Impacting The Cost of Lab-Grown Diamonds vs. Mined Diamonds
For one, the demand for mined diamonds remains much higher than for lab-grown diamonds and the market has a regulated supply, preventing too much supply from reaching the market at once and lowering the price.
Also, the diamond mining process has been around for a very long time and doesn’t often experience innovations.
For lab-grown diamonds, their awareness is much lower but they’ve been fast increasing in popularity. The process to make them has also gone through repeated innovations and technological advances that have drastically reduced production costs.
For example, if you’re considering an excellent cut H color, nice SI1 clarity, and 1-carat diamond, the natural, mined version would cost around $6,500 while the lab-grown version would cost around $2,700 for comparable if not better quality.
Lab-grown diamonds are less expensive than mined diamonds and will remain so, for a myriad of reasons.
While we do not speculate on nor project future diamond prices, there are a few reasons to believe that lab diamond prices could hold steady from current levels.
First and foremost: lab-grown diamonds are still real diamonds, and for that reason, contain an inherent value reflected in their cost.
But that's not all. Lab diamonds are also expensive to cut—because they're so hard, it requires specialized equipment and very well-trained cutters to produce a properly cut, beautiful diamond.
And even though the process could continue to see innovations, it must still be overseen by diamond-growing experts and with the use of expensive machinery.
With demand for lab-grown diamonds increasing exponentially, and energy and raw material prices rising, this could put upward pressure on the cost of production as well.
Diamond Pricing Standard
Have you ever wondered why a lab-grown diamond costs between 20%-50% less than a mined diamond?
Let's start with the fact that there is no standard list or industry-wide method for determining the price of lab-grown diamonds.
The price of mined diamonds is set according to the Rapaport List, which is updated weekly and used as a benchmark for how much a diamond should cost per carat, based on its color and clarity gradings, as well as its carat weight.
In contrast, the price of lab-grown diamonds can vary greatly across manufacturers. This is because technology has improved dramatically in recent decades and manufacturers have been able to improve their equipment so that it's more efficient.
This has allowed them to save money on production costs and pass those savings down to consumers.
Lab-grown diamonds are not sold using the same standards as mined diamonds, but there's still a way to determine a baseline price.
It's still early days for lab-grown diamonds, and prices are a steal compared to natural diamond prices. But they're also not all the same, and there's not yet uniform pricing across the market—and it may be some time before we see that happen.
When you're shopping for a lab-grown diamond, it's important to partner with a jeweler who sources them from reputable manufacturers.
And to be sure you’re getting a high-quality diamond at the best price possible, you should look into the factors that affect each producer’s final price tag on their stones. These include:
- Equipment Quality
- Production method (CVD vs. HPHT)
- Expertise in staff overseeing the growth of the diamond
- Skill of diamond cutter
We encourage you to get educated on these factors, as well as the grading certificate and 4Cs that come with your desired lab-grown diamond -- even after it’s been set in jewelry.
The pricing effects of lab-grown diamonds on the industry have been dramatic. When the lab-grown diamond market first came onto the scene, prices were at just a slight discount to natural diamonds.
A 1-carat investment-grade, lab-grown diamond might have been $3,000, while a natural diamond was just slightly more. That's not much of a difference!
And if you wanted a larger stone, it was hard to find—you'd be lucky if you could find a 3-carat lab-grown diamond that wasn't super expensive.
Now, look how far we've come! A 1-carat diamond is still $3,000, but that same size in a lab-grown variety can cost as little as $1,300—that's more than half off!
And if you want something bigger? No problem! You can easily find beautiful lab-grown diamonds in sizes as large as 7 carats that won't break the bank.
It's been exciting to see how far the technology has come along, and we're excited to see what happens next!
How Carat Weight Affects The Price of Diamonds
Can you have your cake and eat it too? Not if we're talking about diamonds.
Diamonds are subject to the same laws of supply and demand that other commodities are, but the laws of diamond supply and demand are shaped by a few unique factors.
When it comes to diamonds, there’s a lot of lore and data to learn, and most people are very familiar with the so-called Four Cs: cut, color, clarity, and carat weight. These characteristics affect the price when shopping for a diamond, but there’s more nuanced than that.
For example, carat weight is the most straightforward of the Four Cs – it measures exactly how much a gemstone weighs. The relationship between price and carat weight is also straightforward.
Here's what you need to know about how carat weight affects the price of diamonds, and how to make sure you're not overpaying for your ring.
First of all, carat weight is the unit used to describe one diamond's weight in relation to another. This corresponds directly to size—you're probably familiar with seeing "Carats" as a measurement of how big a diamond is.
The more carats a diamond is, the rarer it is. And rarity means higher prices. Generally speaking, the bigger the diamond is (and the heavier it weighs), the higher the price will be.
But this isn't just because larger diamonds are more beautiful or more coveted: it has more to do with the fact that fewer large diamonds are discovered than small ones.
You've got your eye on the perfect diamond engagement ring. The problem? It's slightly over your budget.
Well, if you're willing to go with a slightly smaller carat size, you can save yourself thousands of dollars and still have an incredible-looking ring. Because of something called "off-size" pricing, a half-carat diamond will often cost less than 90% of what a full carat would cost.
Here's an example:
A 1-carat diamond of average color and clarity grades will run you about $5,000.
But if you drop down to a 0.95-carat diamond, you can pay just under $4,500—and that's for a diamond that's only 5% smaller!
If you're open to going down another 10% in size, then you could find yourself looking at an 0.83-carat diamond for just $3,600—a whopping 27% cheaper than the 1-carat diamond! (And if you want to see these examples in person, we'll happily show them to you.)
Keep an open mind when it comes to carat weight—you might be surprised how much money you can save.
So, if you're looking for a bigger diamond but can't get your budget to stretch far enough, there's an easy solution: look for an "off-size," or stone that falls just below or above the most popular carat weights. These stones can be just as beautiful as their more common counterparts.
While it’s true that most mined diamonds experience an exponential price increase with each full carat, this isn’t quite the case for lab-grown diamonds. That means that if you want to save money on your engagement ring, go ahead and look at ‘off-size’ diamonds!
What Is An Off-Size Diamond?
When we say “off-size” we mean diamonds that are less than full-carat sizes. It’s one that falls between two full carats. A 1.5-carat diamond is not an off-size, but a 1.77-carat diamond would be.
These diamonds are beautiful and affordable, so they make excellent choices for engagement rings—and they look amazing no matter their size!
Some diamonds are cut to be just short of or just over the standard carat weight sizes. These specially sized diamonds are known by a few different terms: off-size, just-shy, and in-between, to name a few.
Whether it's for your budget or for a different aesthetic choice, these off-size diamonds can be a good choice! A .82ct diamond is less expensive than a 1ct diamond. This allows you to get more bang for your buck while still getting a beautiful diamond.
While it may seem like these diamonds are mistakes in cutting, these are intentional sizes and carat weights. This is the case for a couple of reasons.
First, while diamond cutters do try to cut diamonds for whole carat weights, their priority is to produce an excellently cut diamond. If they sacrifice cut quality in order to meet certain sizing requirements, then they would not be able to provide the best possible product to their customers.
Second, offering variations on traditional sizes is also great for the diamond market as a whole. The pricing of full carat sizes can exclude a lot of buyers who simply don’t have the budget for the full carat size of their dreams.
Intentionally providing various options of diamond weights and sizes and carat weights allows people to be able to afford diamonds with high-quality color and clarity qualities.
Lab-grown diamonds have the same properties as these off-size diamonds. Lab-created diamonds are genuine diamonds with the same cut as mined diamonds. They have the same fire, specular reflection, and brilliance as their natural counterparts, and are carved into the same forms and sizes.
There are no structural or optical differences between a lab-grown diamond and an off-size diamond, and it is far more cost-effective.
The Difference Between Carat Weight and Size
While carat weight is significant in deciding price, it may not be as relevant to you when selecting a diamond.
The terms "carat weight" and "carat size" are sometimes interchanged, however, they refer to two separate metrics for a diamond, whether lab-grown or mined.
As mentioned above, the weight of a diamond is measured in carats.
The size, on the other hand, refers to how the weight is spread throughout the cut to give the diamond a larger or smaller appearance.
Although a higher carat weight can suggest a larger-looking diamond, this is not always the case. A lesser carat diamond might appear larger than a bigger carat diamond depending on how it is cut.
Dimensions and proportions are important factors to consider while creating a diamond's optical appearance. These will offer you a much better idea of how large a diamond will appear from a 'face-up' perspective.
The significance of carat weight is entirely dependent on personal desire and how the diamond will be set.
There are several techniques to make a diamond appear larger, like utilizing a narrower band, a split shank, or a halo setting. Most people can't detect the difference in size just by looking at them unless they're looking at two diamonds of different sizes side by side.
Resale Value & Diamond Certification
It's also worth noting that, like mined diamonds, high-quality lab-grown diamonds will come with a grading certificate attesting to the veracity of their characteristics.
Mined investment-grade diamonds and lab-grown diamonds are evaluated to the same exacting standards. As a result, they'll all come with grading reports from independent labs like the International Gemological Institute (IGI) and the Gemological Institute of America (GIA) — with the IGI being the gold standard for lab-grown diamonds.
Natural diamonds and lab-grown diamonds do not have the same resale market, despite being evaluated to the same standards.
The initial cost of buying would determine all resale value, and one advantage of real diamonds is that certain merchants provide a trade-in program.
This policy is possible since the past 50 years of natural diamond market history shows that future diamond prices will most likely remain stable or increase.
Since no one perceives where lab-created diamond prices are headed, there isn't yet enough information or history of lab-grown diamonds for merchants to offer trade-ins or for uniformity in a resale market.
That being said, most people anticipate keeping their engagement ring for the rest of their lives, so they want to obtain the greatest jewelry they can afford.
A lab-grown diamond is a fantastic choice for a piece of gorgeous jewelry in these conditions.
Conclusion
Lab-grown diamonds can be just as beautiful as mined ones, but if you're concerned with managing your budget, they could be the right choice for you.
Whether choosing a mined diamond or a lab-grown diamond, the end result should be the same – you should love your diamond.
Determining your priorities and viewing a variety of diamonds in person is what we always recommend to choosing a diamond for your engagement ring or any jewelry that will delight you year after year.
0 Comments