Which luxury watch brands hold their value best?
This is a question that we get asked all the time.
And the truth is that the answer to that question is quite tricky.
If you’re into watches, you’ve probably heard about the huge differences in prices on Rolex watches, in particular, sports steel watches from Rolex when they were made and today.
You’ve probably also heard many people say ”watches are great investments” and that they hold their value really well, but the truth is that this topic is quite complex, and there’s not just one fixed answer and truth.
Let’s begin with the topic of buying watches for investment purposes. In this article, you won’t just be introduced to a few brands that you should look at buying. You’ll also learn some tips and tricks to buying watches that will hold their value well or relatively well.
Which luxury watch brands hold their value: watches as an investment?
The topic of buying watches as an investment is slightly controversial.
The reason is that on one side, we have the people who say that if you truly love watches, you shouldn’t pay much thought to whether or not the watch you want to own will depreciate in value or be a good deal, since doing this limits you from buying watches that you truly like and enjoy just because you don’t want to lose money.
In other words, some people argue that if you ask the question ”which watch brands and watches hold their value best?”, you’re not a true watch enthusiast, and whether that is the case or not, we’ll leave no opinion.
But there are, on the contrary, some upsides to asking the question about which watches hold their value best. First off, there’s no secret that watches in general cost a lot of money. This means that if you make a bad purchase and buy a watch that doesn’t hold its value very well, you’ll lose money on that purchase when you sell it. Now, some people don’t care if they lose money on their watches, because they consider that the loss from the watch was worth the joy the watch brought while owning it.
But there’s no denying that if you can, the most ideal thing is to own a watch for some time, enjoy it, and then sell it for the same that you bought it for, slightly less than you bought it for, or slightly more.
The benefit of this is that if you’re like most watches enthusiasts, you don’t have a bottomless watch account, and so if you buy watches that tend todepreciate in value a lot, your watch account will become smaller, and ultimately, this will ”slow down” your possibilities in owning more watches and experiencing more of what is out there.
Now, there’s nothing wrong with buying watches that will depreciate in value. In fact, if you really like a watch, it may be worth buying it even though you’ll lose money on it. But this is up to you.
If you’re a person who likes to feel that you’ve made a great or relatively good deal, you probably want to buy watches that tend to hold their value relatively well out of principle, but which watches should you look towards buying?
Buying preowned
Buying watches pre-owned is often a great way to minimize your loss on a watch, since, just like with cars, watches tend to depreciate most rapidly once they are taken from the store and sold on the secondhand market. Now, there are some exceptions to this, in particular, watches that have a long waiting list and are extremely popular, but for the vast majority of watches and watch brands, this is not the case.
If you, for example, look at this Hublot watch:
You can see that the retail price is €90,300.
On the secondhand market, however, the price for the same watch starts at roughly €55,000. That’s quite a huge difference.
So only making the decision to not buy brand new will – in most cases, minimize your loss on a watch, but again, there are a few exceptions to that rule. Then of course, if you really want to buy brand new, and prefer the experience of doing so, above making a better deal, then you should do that, but on second thought, you probably wouldn’t be here if that would be the case.
Common principles about luxury watches
Now, it’s really difficult to mention brands when talking about which brands and watches hold their value best, because the truth is that it depends, and it varies between the watch you choose to buy.
Overall, most new watches will lose money, and this is why buying pre-owned is a good first step to making a better deal.
Something to have in mind is what it is that actually affects a watch’s resale value. The answer is of course demand on the secondhand market, but also the prestige and reputation, and how people view the brand.
The more exclusive, prestigious, and well-respected a watch brand is, the better its watches will retain their value on the secondhand market. Now, this is also the reason why some watches cost more on the secondhand market than the retail price because the demand is greater than the supply from the retailers, and the only real way is to buy it on the secondhand market.
Here are a few brands whose watches tend to hold their value quite well on the secondhand market:
- Rolex
- Patek Philippe
- Audemars Piguet
- Jaeger-LeCoultre
- Vacheron Constantin
Now, it’s important that you read these brands with a big asterisk next to them because they come with more exceptions than not. Also, since the watch market is always changing, what may be the reality today may not be the truth tomorrow.
As mentioned, there are a great number of factors that affect the resell value of a watch, and the most important is obviously demand. If there’s no demand for a particular watch brand on the secondhand market, then naturally the price you’ll be able to sell it for will be substantially lower than the retail price.
Furthermore, something that also affects how well the watch holds its value is whether or not, and how much the retailers discount. When retailers discount a lot, it tends to harm the value of the watch brand long-term.
Something that greatly affects the resell value of luxury watches over time is price increases. Many, if not most luxury watch brands tend to make price increases on a regular basis, and what happens when the retail price gets higher is that the prices for those watches tend to become higher on the secondhand market as well. This is what has happened with a number of watch brands, including Rolex, and this together with an increasing demand leads to a huge surge in prices, and thus a good investment over time.
The fact of the matter is that how well watch brands hold their value tends to be quite irrational. First off, we know that in material, watches are not worth nearly as much as their price. And this is why watches are quite tricky, compared to for example gold, gems, or jewels where you have the actual material value plays the most central role. In fact, believe it or not, a steel Rolex can actually cost more than a full-gold Rolex. The same obviously goes for other brands as well. And when you think about it, it’s quite crazy.
If we are to give atip for buying luxury watches that will hold their value relatively well, or even appreciate, it is to buy a Rolex sports watch in stainless steel.
Of course, you want to do your homework first before buying it, but there seems to always be a great demand for steel sports Rolexes on the secondhand market, which naturally keeps the prices up, and even drives them up.
If you want to see the price evolvement on sports steel Rolexes, just look at what the retail price for these watches was 10 – 20 years ago, and then look at what those watches sell for today. It’s safe to say that they are quite good investments.
Vintage
Vintage is a tricky section of watches, and if you are going to buy vintage watches because you want them to hold their value, it’s important that you know what you are doing.
Now, the good news is that vintage watches have already passed the test of time, and so have the prices for them. Today, the vintage Rolex market is especially hot, with prices having skyrocketed in just a few years on vintage stainless steel Rolex sports watches in particular. Just like with everything, if you are going to buy vintage watches, it’s crucial that you know what you are doing, you know the market, and understand what’s what.
But if you know vintage watches well, and you know what you are doing, vintage watches can be a great investment.
It’s also important that you have in mind that there are no guarantees about the way the market will evolve in the future, but the more you’re educated in watches and how the market is going, the more likely you’ll be to make a good deal on your watch and buy watches that won’t lose a lot in value.
Choose metal wisely
If you look at the market, the demand for stainless steel watches is much higher than the demand for gold or two-tone watches. Watches in steel tend to hold their value better than those of gold, and this has to do with the fact that gold watches have a higher retail price, and the demand for them is thus not as high on the secondhand market as fewer people can afford them. But also because people prefer steel over gold. Now there are of course exceptions to this rule, as there are gold watches that can be really good investments as well, but generally speaking.
As such, if you are looking to buy a watch that will hold its value well, or that you’ll even make money on, it’s better to look at buying a stainless steel watch. This also generally goes for watches with diamonds.
Condition, condition, condition
The condition is obviously something that affects a watch’s value.
A watch that is in brand-new condition will obviously be worth more than a watch that is scratched up and worn frequently.
Age is something that also affects a watch’s value, especially if it is the age where the warranty is about to or has just run out.
Also, the box and papers are also quite important for a watch’s value. Not to mention vintage watches as these are becoming more and rarer.
How much does a watch depreciate?
If you look at how much a watch depreciates when bought from the retailer and then sold on the secondhand market, it obviously varies a lot. Brands that don’t hold their value as well as Rolex, such as brands like Breitling, Tag Heuer, and Omega, tend to lose between 40-50%, but this is of course when we’re talking short-term, and it’s really difficult to know what will happen if you look at the watch’s value long-term. Do note, however, that there will always be exceptions to this.
The good news is that if you buy these watches on the secondhand market, someone else has already taken the hit, which means that you’ll most likely not lose a lot – if anything.
It’s also worth adding that how much a watch depreciates can depend on a number of things, but at its core, it is about supply and demand. This means that a particular watch from a brand whose watches generally don’t hold its value very well may hold its value extremely well if the demand for it is there.
