Depreciation of Rolex Watches

[ACURATL]

Hi Everyone,

There are many reasons to purchase a Rolex. One of them being that the watch holds its value over time and can be liquidated in the event of a cash shortfall. But my question to all of you is how much of the value of the watch is lost the moment you stepped out the AD and is there a "price floor" or a value that the watch can't fall below? I understand that some models do in fact appreciate in value due to its limited supply etc.

I have my sights set on a 34mm oyster date for $5700 at an AD in Toronto, Canada and was wondering what the price difference would be for a second hand piece.

If I were to purchase this watch and sell it the next day for whatever reason, how much of its original value would I be able to get back.

Thanks for your opinions in advance.

TL

[jot_]

Originally Posted by ACURATL

Hi Everyone,

There are many reasons to purchase a Rolex. One of them being that the watch holds its value over time and can be liquidated in the event of a cash shortfall. But my question to all of you is how much of the value of the watch is lost the moment you stepped out the AD and is there a "price floor" or a value that the watch can't fall below? I understand that some models do in fact appreciate in value due to its limited supply etc.

I have my sights set on a 34mm oyster date for $5700 at an AD in Toronto, Canada and was wondering what the price difference would be for a second hand piece.

If I were to purchase this watch and sell it the next day for whatever reason, how much of its original value would I be able to get back.

Thanks for your opinions in advance.

TL

I'd imagine the value would drop in the neighbourhood of 15-20%.

[SUBversive]

Originally Posted by ACURATL

Hi Everyone,

There are many reasons to purchase a Rolex. One of them being that the watch holds its value over time and can be liquidated in the event of a cash shortfall. But my question to all of you is how much of the value of the watch is lost the moment you stepped out the AD and is there a "price floor" or a value that the watch can't fall below? I understand that some models do in fact appreciate in value due to its limited supply etc.

I have my sights set on a 34mm oyster date for $5700 at an AD in Toronto, Canada and was wondering what the price difference would be for a second hand piece.

If I were to purchase this watch and sell it the next day for whatever reason, how much of its original value would I be able to get back.

Thanks for your opinions in advance.

TL

Try pricing a used one and see.

[gimpex]

This shouldn't be your sole reason for getting the watch , but yes , it's true that they keep value normally , if bought right.

Without referring specifically to Canada , or this watch , if you buy from an AD normally discounts are lower therefore you need to wait longer to be able to make your money back ( as new prices increase ).

Best is to compare to new prices of similar watches for sale either on this board or another site with many listings (like chrono24 ).

Generally you would do well to get 20% discount on a SS ( which is difficult from AD unless you have some special arrangement ). Around 30% on all gold. At these prices I feel safe that the purchase would be safe. Btw this is for EU.

And welcome to TRF

[JP Chestnut]

Originally Posted by ACURATL

Hi Everyone,

There are many reasons to purchase a Rolex. One of them being that the watch holds its value over time and can be liquidated in the event of a cash shortfall. But my question to all of you is how much of the value of the watch is lost the moment you stepped out the AD and is there a "price floor" or a value that the watch can't fall below? I understand that some models do in fact appreciate in value due to its limited supply etc.

I have my sights set on a 34mm oyster date for $5700 at an AD in Toronto, Canada and was wondering what the price difference would be for a second hand piece.

If I were to purchase this watch and sell it the next day for whatever reason, how much of its original value would I be able to get back.

Thanks for your opinions in advance.

TL

If I cared about resale value, I wouldn't purchase that watch. It will suffer from higher depreciation than the more popular SS models. Buy it if you like it, forget about resale.

[joe100]

Welcome board.

Buy watches you like but don't buy them for their value later on. No fun in that

[Tools]

It's just like driving a car off the lot.. instant depreciation...

Some more than others.. Good selling models can recoup more of their value sooner than others.. A new ceramic Sub may not lose much at all, but your Oyster is not real popular and so you will likely lose 30 percent initially..

[springer]

Originally Posted by Tools

It's just like driving a car off the lot.. instant depreciation...

Some more than others.. Good selling models can recoup more of their value sooner than others.. A new ceramic Sub may not lose much at all, but your Oyster is not real popular and so you will likely lose 30 percent initially..

I have to agree with Larry.

[Sherwooddavid]

Fair question TL.
I would think it would come down to how much of a discount you received and what the final price was.

If you had to sell a Rolex the day after you bought it you should be able to get 75-80% of MSRP.

As mentioned in other posts,its similar to buying a car.

[DrLindaPhD]

Don't agree. Depends on how good a price you got it for. If you got it for "less" than the going AD rate, then you will be able to liquidate for close to cost. If you were "taken" and paid a bit above going AD rate, then you will have lost about 10 to 15% walking out the door. if you buy rare, you will always have a buyer. You can't really qualify an answer like this. It all depends on the model, desirability, and what purchase price you got it for. This is close to what happens with a good car. You can get a BMW for below Kelly Blue Book from a dealer looking for a quick sale and if you have some mad buying skills or you can pay about 10% or more over Kelly blue book value because you did not do your homework. So, the answer is, do your homework before you make an offer to buy a watch from an AD. Shop around too.

[Jake B]

They only "keep their value" if bought used in the first place.

That OP date you're talking about will automatically become around $3200 as soon as it's used. That's a couple of thousand dollars lost if you decided to sell it right away. Last time I checked, you'd lose a buttload less money if you bought a Seiko Marine Master and flipped it right away. So, the myth of a brand new Rolex being some great investment is simply bs. The truth about a used Rolex holding its value is, well, the truth. If you buy a used Sub this week, and sell it next week, then you'll find it will have held its value and you'll be able to get back every cent you bought it for.

[Jannal]

Originally Posted by Jake B

They only "keep their value" if bought used in the first place.

That OP date you're talking about will automatically become around $3200 as soon as it's used. That's a couple of thousand dollars lost if you decided to sell it right away. Last time I checked, you'd lose a buttload less money if you bought a Seiko Marine Master and flipped it right away. So, the myth of a brand new Rolex being some great investment is simply bs. The truth about a used Rolex holding its value is, well, the truth. If you buy a used Sub this week, and sell it next week, then you'll find it will have held its value and you'll be able to get back every cent you bought it for.

[Jake B]

Originally Posted by Jannal

You agree? Disagree?...or do you just have the giggles?

[Jannal]

Originally Posted by Jake B

You agree? Disagree?...or do you just have the giggles?

Agree.

[myopiccoog]

Well I can buy at grey market prices NIB for 30- 40% back on most of Rolex line. SS daytonas are one exception. They are about 20%-25% back right now. Now grey dealers will mark it up 5-10% to sell to end user. There are you numbers. They do hold and ultimately increase in value if you buy "right". Used is always best. Grey is better. AD is a terrible idea if resale is important.

[mmmk604]

I would say around 20% minimum, the demand for the Date isn't as high as other models.

I would say a stainless steel Submariner holds the best resale value, if resale value matters to you, pick up a Sub!

[ACURATL]

Thanks for all your opinions everyone. Great forum!

I'm a few months away from getting my accounting designation and thought I reward myself with a beautiful timepiece. There are many reasons why a Rolex would be a perfect graduation gift but given that I am pursuing an accounting designation, I like to see how my "net worth" changes after the purchase taking into consideration the depreciation, goodwill and the Rolex brand has a ton of goodwill associated with it that perhaps makes it one of the most desirable watches in the world.

Since the oyster model isn't that popular amongst the other models, hopefully the AD can give me a bigger discount :)

Keep the responses coming.

[jot_]

Originally Posted by ACURATL

Since the oyster model isn't that popular amongst the other models, hopefully the AD can give me a bigger discount :)

Keep the responses coming.

You're in the Toronto area? Shoot me a PM, have some tips that might save you a few $. :)

[supernova]

I lost about 5% selling my brand new from AD 14060M Sub about a month after I got it so it's not too bad!

[SLS]

It's simple really, a watch is a bad investment from a resale perspective. Buy a watch to wear & enjoy.
Scott

[polarinda]

If you buy a subc from an AD now and sell it the moment you walk out the door, it's considered used and you'd probably be hit 5-10%.

That's the reason I never buy new. I don't need that kind of hits.

[skprd13]

Asked my AD for the best price they could do for my wife's new 178341 MOP VI. List $16,300, they quoted $14,375. That is approx. 12% off list. Purchased NIB from forum for $13,375 saved 18% right off the bat. I did not buy the watch to resell! It is for my wife on our 20th wedding anniversary. So the savings are great but the watch will never be sold so technically it really does not matter on getting a price break except on the wallet.

I buy my watches to wear because I like them, I did not purchase my watches to make money.

Aloha from Kauai.
Tom

[bscepter]

if you're purchasing solely for depreciation's sake, i'd go for a more iconic model, such as a ss sub or gmt or explorer.

in 2013, however, a rolex isn't a rational purchase like it might have been, say, in 1966. it is a wristwatch that costs many thousands of dollars, where there are watches available that keep time as well or better for a fraction of the cost. no, a rolex is a purchase of passion. and it will lose its value over the next ten years, regardless of the model (unless there's an internet-fueled mania for it - see: "flat 4" 16610LVs!)

so, buy what you love and you'll be happy.

[landroverking]

I would think a Rolex Date would drop faster than a DJ and for sure faster than the SS sport models.

[kilyung]

I don't think any model depreciates more than the precious metal models but who cares? I love them all.

[FNFZ4]

You should never buy a watch as an investment. However, if you do, choose a Patek or Rolex

[Roll the Lex]

I wouldn't look at a Rolex as a liquid investment. These are the issues that I'm thinking about in this situation:

1) First off, for you to just break even, your Rolex would have to appreciate in step with inflation, so that's about 3% a year (in the US, don't know what it is in Canada). Then if you want to make money, it has to appreciate > 3%/yr.

2) Then there's wear and tear- if you wear it daily, it's gonna get scratched here and there. That's going to reduce the value. Keep it for 5-7yrs, and then you need to have it serviced and that's going to cost a few hundred dollars. You could go the route of "it's a Rolex, it doesn't need to be serviced" (horrible idea, by the way) and hope when it comes time to sell, the buyer doesn't know any better. If not, expect to get less if you haven't had it serviced. Worst case scenario, the watch needs extensive repair, which could be $1000+.

3) It's not so liquid- you could sell the Rolex back to an AD or some store that specializes in used Rolex watches, but you're not going to get the market value. To get the market value, you've got to go out on your own- then there are issues with finding a buyer as well.

Unless you are some Rolex guru that REALLY, REALLY knows the market and can flip watches, just buy what you like and enjoy it.

I don't know what your situation is now, but if I were buying a Rolex and was concerned about quickly liquidating it in the near future for cash, I'd probably keep the cash as cash.

[Chaching]

Originally Posted by Roll the Lex

I wouldn't look at a Rolex as a liquid investment. These are the issues that I'm thinking about in this situation:

1) First off, for you to just break even, your Rolex would have to appreciate in step with inflation, so that's about 3% a year (in the US, don't know what it is in Canada). Then if you want to make money, it has to appreciate > 3%/yr.

2) Then there's wear and tear- if you wear it daily, it's gonna get scratched here and there. That's going to reduce the value. Keep it for 5-7yrs, and then you need to have it serviced and that's going to cost a few hundred dollars. You could go the route of "it's a Rolex, it doesn't need to be serviced" (horrible idea, by the way) and hope when it comes time to sell, the buyer doesn't know any better. If not, expect to get less if you haven't had it serviced. Worst case scenario, the watch needs extensive repair, which could be $1000+.

3) It's not so liquid- you could sell the Rolex back to an AD or some store that specializes in used Rolex watches, but you're not going to get the market value. To get the market value, you've got to go out on your own- then there are issues with finding a buyer as well.

Unless you are some Rolex guru that REALLY, REALLY knows the market and can flip watches, just buy what you like and enjoy it.

I don't know what your situation is now, but if I were buying a Rolex and was concerned about quickly liquidating it in the near future for cash, I'd probably keep the cash as cash.

.... to your statement..if you know Rolex like me who has flipped many sometimes making thousands in weeks I disagree with your above statements. Rolex typically does price increases once or twice a year at or around 8%. Do the math. My Dad back in 1968 bought a 18K Solid Gold Rolex GMT II for $1,100. In the condition it's in now it will sell for 15K all day long because it has all the original paperwork, boxes and service papers since new.

[ACURATL]

Originally Posted by Chaching

.... to your statement..if you know Rolex like me who has flipped many sometimes making thousands in weeks I disagree with your above statements. Rolex typically does price increases once or twice a year at or around 8%. Do the math. My Dad back in 1968 bought a 18K Solid Gold Rolex GMT II for $1,100. In the condition it's in now it will sell for 15K all day long because it has all the original paperwork, boxes and service papers since new.

This was exactly what was on my mind when I first introduced the topic. There was an excel spreadsheet tracking the prices of different models over a 60 year span and the price increases averaged out to be in the range of 8-13% depending on the model. So with the prices of new watches increasing year over year or every 2 years, wouldn't the value of a used model appreciate abit to somewhat offset the price of depreciation?

I definitely agree that once the watch is purchased, the value of it drops by around 20% but I do in my opinion think that these watches have somewhat of a price floor given that its well maintained and not frequently worn on a daily basis.

[clubsta]

Stick with the SS professional models.