In a previous DEJB article, we discussed Rolex appraisals and the various factors that go into determining the value of a previously owned luxury timepiece (materials, condition, year, rarity, complexity, etc). But now you may be wondering, “Will my watch hold its value?” and “How much can I expect that value to depreciate over the coming years?”
Watch Depreciation Factors
One way to think about the depreciation of a prestige timepiece is to compare it to a prestige car. We all know that as soon as you drive a new car off the sales lot, its value begins to depreciate. The depreciation of a Porsche, however, is going to be vastly different from the depreciation of a Honda. The same goes for watches. And to determine how little or how much a watch will depreciate, we must consider the points discussed in our Rolex appraisal article.
One important factor is condition. Many clients are unfortunately misled when they conduct their own internet research and estimate their timepiece is still worth (for example) about $6,000, and then when they take it to me for an appraisal, I have to inform them that the watch is maybe worth $3,000—due to its condition. The originality of a luxury watch is another important factor. Are there any after-sales additions or replacement parts? Just like with an antique car, these will negatively impact a watch’s value.
Additionally, we must consider the watch’s complexity. A luxury timepiece with complex movements that underwent a limited production will retain more of its value than a watch that was made robotically in minutes on an assembly line. Some fine watchmakers can take up to 8 months to hand create one single watch movement.
Here is one specific example of how a watch’s movement can dictate its value: two solid gold Rolex Day-Dates, the 18238 and 18038, have a $1,500 difference in value due to the former’s more desirable dual quickset movement, which was introduced in 1988.
Like with fine art or antique cars, rarity is also a big factor when it comes to the value of a timepiece. It’s simply supply and demand. In some cases, a rare, sought-after watch can actually appreciate in value, like the Patek Philippe 2526 or maybe a vintage Panerai (see my article on investment watches).
Rarity, however, can be slightly deceiving. The more bizarre watches, those designed with strange shapes and colors or flooded with diamonds, are typically more trendy and can be difficult to sell, lowering their value. If you want to purchase a watch that will hold as much of its original value as possible, it’s smarter to buy a conservative style from a strong, recognizable brand, like Patek Philippe or Rolex.
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Watches That Hold Their Value Best
In general, a typical luxury timepiece will lose anywhere from 20-70% of its original value depending on the factors we have just discussed. If you want your timepiece to retain its value, your best bet is to buy a pre-owned luxury watch, thereby eliminating that first big chunk of retail margin that you shell out when you buy a brand new timepiece. Secondly, choose a strong and recognizable watch brand that is likely to depreciate more slowly. To assist you in your decision-making, here is a list of watch brands at opposite ends of the depreciation spectrum:
Luxury Watch Brands That Hold Their Value More
– Patek Philippe
– Jaeger LeCoultre
– A. Lange & Sohne
– Vacheron Constantin
Luxury Watch Brands That Depreciate More Quickly
– Tag Heuer
Although the internet is a great source of information on luxury watches, it is always best to consult an expert watch buyer–someone who is is active and up-to-date with the current market and well-versed on how to evaluate a watch’s condition and mechanics.
If you are looking to buy or sell a watch for cash, please contact Diamond Estate Jewelry Buyers for a free consultation. We welcome all questions and are happy to share our decades of experience and knowledge with potential clients.