For about the last 4 or 5 years I would be formatting a desktop to install Windows 7/8/10 in order to give this new PC to an end user. Every once in a while I would run into the error when selecting the partition during the Windows installation that prevents me from installing Windows. The error message would say “we couldn’t create a new partition or locate an existing one.” Most of the time I would delete any existing partition if I were reusing a hard drive and then I could be allowed to install Windows. However, in the most recent cases I would be using a brand new SSD that threw this error and would NOT have a workaround. In fact, this only seemed to happen on fairly new desktops with brand new SSDs. Prior to today, deleting any existing partition(s) usually fixed the problem. However, this workaround would not, could not work. After a few Google searches I landed on an article from AvoidErrors.com that fixed this issue once and for all. This is the best method.

When you booting from either a USB bootable flash drive or from CD/DVD with the Windows installer and you get to the disk partition screen (only accessible if you choose custom installation) you get “we couldn’t create a new partition or locate an existing one,” do the following:

1. When you see the error in question, press Shift+F10 to open the command prompt.
2. In the command prompt type diskpart and hit Enter.
3. Then type list disk and hit Enter.
4. Type select disk  X(X being the local drive.), and then hit Enter. In my case the disk where I want to install Windows 7 is Disk 0, so the command would be “select disk 0”
5. Type clean and hit Enter.
6. Now type create partition primary size=5000 and hit Enter.
7. Now type format fs=ntfs quick and hit Enter. This command will format the partition using NTFS.
8. Type assign and hit Enter. This will assign a drive letter to the partition.
9. Type active and hit Enter.
10. Type list volume and hit Enter. To list the drive letters of the Windows installation media (USB/Disc).

11. Type exit and hit Enter.
12. Change directory to the USB flash drive, in my case: cd e:
13. Copy all the Windows installation files from USB drive to C: drive by entering the following command: xcopy e: c:/e /h /k
14. Remove the installation USB drive from computer and restart.
15. From here you should be able to install Windows without an issue.

Note – If you prefer watching a video with step-by-step directions click here Solved: Setup was unable to create a new system partition or locate an existing system partition

Resources

Miguel (2016). Solved: Setup was unable to create a new system partition or locate an existing system partition. AvoideErrors. Retrieved from: https://www.avoiderrors.com/unable-create-new-system-partition/