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I had a similar question, specifically with regard to items like the Kasatha microcord armor, which has 4 types of varying levels listed.
Can you buy the level I, then when able due to level/credits pay the difference to get level II? Or is the armor sufficiently different that it requires selling for 10% of cost and buying a completely new set?
Without the ability to upgrade it's going to become an optimization problem on when armors should be bought (unless there are an excessive amount of credits available.)

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The only things which can be upgraded (according to the rule book) are Personal Upgrades, and Weapon Fusions (in that weapon fusions can be transferred from your old gun to your neg gun at a reduced cost).
To follow up on the micro cord example:
Kasatha microcord I 460 cred
Kasatha microcord II 3,670 cred
Kasatha microcord III 9,000 cred
Kasatha microcord IV 23,800 cred
difference between sell back and upgrade:
I -> II 414 (out of 15,000 creds WBL)
II -> III 3303 (out of 33,000 creds WBL)
III -> IV 8100 (out of 100,000 creds WBL)
II -> IV 3303 (out of 100,000 creds WBL)
It seems like the costs work out to be relatively trivial if you upgrade a given item of equipment every 5 levels.

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It seems like the costs work out to be relatively trivial if you upgrade a given item of equipment every 5 levels.
Fair point. It's still going to take a little getting used to compared to PFS and the ability to easily increment over time with magic enhancements, ring of protection, etc. With Starfinder, there seems to be a bit more of a challenge in timing when you should trade up for best cost/benefit vs. doing it as you have the funds available that don't need to go to something else in PFS.

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Jared Thaler wrote:Fair point. It's still going to take a little getting used to compared to PFS and the ability to easily increment over time with magic enhancements, ring of protection, etc. With Starfinder, there seems to be a bit more of a challenge in timing when you should trade up for best cost/benefit vs. doing it as you have the funds available that don't need to go to something else in PFS.
It seems like the costs work out to be relatively trivial if you upgrade a given item of equipment every 5 levels.
But you can only sell back items at 10% its base cost. Page 166 under selling equipment.

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You can, but you have to specifically craft the upgraded item using your lower level item for materials.
The cost is the same as selling your old item and buying the new one, though, so there's no mechanical benefit in doing so.
Maybe I should have been more specific. There is no mechanical advantage to upgrading to a better version of the same item, which I am a little sore about.