Diamonds are graded according to four basic qualities: carat, cut, clarity and color. Collectively, these characteristics are famously known as the “four C’s” of diamonds.
While each of these attributes plays a role in determining the price of a diamond, they do not necessarily have the same level of impact on the diamond’s appearance.
Cut is arguably the most important attribute that impacts a diamond’s outward appearance and beauty. Out of the 4Cs, it is also the only factor which can be determined through human actions when a rough diamond is polished.
Undoubtedly, a diamond with better cut quality is more to be expensive as more rough material is removed and highly skilled labor is required during the polishing process.
When it comes to carat weight, this is the aspect where prices of diamonds are most significantly affected. As the weight and size of the stone increases, you can see an exponential increase in prices.
In the case of color, the price jumps across different grades are actually relatively (!) small and pretty close to each other. Typically, you can expect to see a linear increase in price as color grades improve.
When it comes to clarity, prices increase linearly in the lower grades. However, the correlation between price and clarity grades can be shocking especially we look at higher ratings in the clarity scale.
For example, a jump from slightly included stones (SI) to very slightly included stones (VS) isn’t going to be colossal. But as soon as you reach the VVS or IF levels, prices start to follow a steep curve and rise in a staggering manner.
Below is a price chart taken from JamesAllen.com based on similar 1 carat sized round diamonds with excellent cut, F color, excellent polish/symmetry. In a nutshell, clarity is the only variable here and you can clearly see how the prices change with increasing clarity levels.
Price comparison of one carat diamonds with different clarity ratings.
From the price chart above, you can see that a 1.00 carat round diamond with F color, SI2 clarity retails at approximately $6,500. On the other hand, another diamond with similar specifications (except for a VVS1 clarity) retails at approximately $13,500.
While there is only a difference of 5 clarity grades from SI2 to VVS1, it results in a whopping 100% increase in prices! Needless to say, the price jump is even higher if we were to compare internally flawless diamonds instead.
If you are observant, you might have noticed the small variances in prices for each clarity grade.
For example, within the VVS2 grade, the 3 diamonds listed above have the following prices: $11,620, $11,920, $12,620. These differences in prices are usually due to subtle reasons like the precision of cut (table/depth variations, optical symmetry etc…), the types of inclusions or even vendor markup.
The point I want to bring across here is that a cheaper stone doesn’t necessarily mean it is worse. Likewise, you cannot assume that a more expensive stone is necessarily better.
Yes, I did. The reason why I didn’t include flawless diamonds in this comparison is that I couldn’t find any within the 1.00 carat, F color, triple excellent range. Believe it or not, flawless diamonds are super rare and generally unavailable in the consumer market. In fact, you shouldn’t be surprised that most jewelers will never even see one in their entire career.
There are a couple of reasons why flawless diamonds are so scarce.
First of all, it is extremely rare to find suitable rough stones that can be polished into flawless grades. Even if cutters are willing to take the risk to polish a flawless diamond, the end product only caters to a very small and specific niche segment of consumers.
Also, running a profitable jewelry business is all about selling and moving inventory to make money. Most distributors won’t risk having a huge sum of capital locked into an inventory of flawless diamonds which they will have a hard time selling.
Instead, a more viable business strategy would be to buy several diamonds of lower grades where there is stronger consumer demand for them. So, if you do come across flawless diamonds listed for sale, don’t be surprised to see astronomical prices for them because of their rarity.
Included diamonds (I1-I3) are a huge minefield to venture into even for educated consumers. I left them out as well because I don’t recommend anyone buying diamonds from the included range.
Why? That’s because 99% of the time, included diamonds either have imperfections that affect their brilliance or flaws that pose serious durability issues.
Here’s one such example you can see for yourself below and feel free to click on the link to view full details of the listing.
G Color, I1 clarity diamond that looks cloudy and has surface reaching feathers – $3,520
It’s no coincidence that these are the kind of stones that often appear in “blow-out” sales where prices are ridiculously low. After all, why do you think jewelry stores can afford to market their inventory at “80% off” sale prices?
Do you really believe that you can get a good deal in such “once-in-a-lifetime” sales?
Well, the ugly truth is that most jewelers aren’t giving discounts when they are running massive sales. They are just offering lower quality stones for sale and hoping to off-load them to unsuspecting consumers.
When you have to purchase an engagement ring within a limited budget, you need to be realistic and strike a balance between your requirements. Clarity is often the attribute that you can make compromises on without any detrimental impact on the diamond’s appearance.
Do you really need to pay more for a diamond that has higher clarity when you can buy one with a lower clarity grade which would look exactly the same to the naked eye?
This is a question no one else can answer but yourself. With the relatively big sums of money involved in a diamond purchase, I think it is wise to give yourself more time to think over what you want before you start to shop.
With that understanding in place, we will dig deeper into selecting slightly included diamonds and highlight the things to take note of on the next page…