Guitar price depreciation

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  • RockerRocker Frets: 4942
    I never knew that there are people selling bedrooms. Renting yes but selling!!!!
    Insanity: doing the same thing over and over again and expecting different results. [Albert Einstein]

    Nil Satis Nisi Optimum

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  • The price of used guitars is largely set by the dealers trade in price. Regardless of the sellers perceived value a dealer will only offer a price based on his ability to easily sell the instrument when his mark up is added. Selling in the private market will almost always achieve a higher price to the seller but they will never be able to sell a guitar at a higher price than a dealer is asking. Selling a very expensive guitar privately can be difficult as many of these guitars are bought by people requiring credit facilities such as 0% credit or credit card. Of course if you keep a quality guitar for a long time you can expect to sell for much more than you paid for it, I have several Fenders and Gibson’s which I purchased in the 60/70s which are worth many time their original purchase price.


    Hm. There might be a slight chance newer Gibsons and Fenders will not be worth many time their original purchase price in the future, no matter how good quality they are.
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  • BigsbyBigsby Frets: 2913
    New guitars sometimes go up in value. The trick is buying when they're on clearance. :)

    A couple of years ago I bought an SG from someone for what I considered a fair price. It became obvious he'd bought it about 18 months before, and on clearance. I was OK with the fact he was probably making about £50 to £100 on it, as I did think the price was fair. Within the year I began to think about selling it, but, being a bit undecided, I listed it for £250 more than I'd paid - expecting offers close to what I paid, at which point I could decided if I really did want to let it go. Someone came along and offered the price I was asking. So that SG went up £300 or so from new, within three years.

    Over the last 4 or 5 years, I've also bought and sold a few new guitars - four have made a profit of some sort, two sold for what I paid new, and just a couple have made a small loss. Of course, there are a few I still have that would make a larger loss if I sold them - thankfully they're keepers, (at least for now!), and if I ever did sell them, they would've 'earned their keep'.

    I suspect some models can achieve such an increase from full retail: The 'Captain Kirk' SG is a good example. It was basically a limited run Custom for Standard prices, and Gibson's prices have gone up dramatically since then. I rarely see them for sale, but when I do, they're always more than the original RRP from 2013.
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  • Paul7926Paul7926 Frets: 227
    Bigsby said:

    I suspect some models can achieve such an increase from full retail: The 'Captain Kirk' SG is a good example. It was basically a limited run Custom for Standard prices, and Gibson's prices have gone up dramatically since then. I rarely see them for sale, but when I do, they're always more than the original RRP from 2013.
    It was so disappointing to google that and find that it wasn't a gold top with a girdle for a scratch plate and a mysterious light that always lit it up.  Also having a strange habit of having neck dive one minute and then not the next causing it to sway from side to side out of time with anything else.
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  • Strat54Strat54 Frets: 2329
    Sense says that you have to deduct VAT and the dealer mark up from the price of a new guitar. Some hefty profit in these new guitars these days. I saw one prominent dealer slash £2k off the price of a Masterbuilt Tele for Black Friday. It didn't sell and the old price was soon reinstated. 
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  • BigsbyBigsby Frets: 2913
    Strat54 said:
    Sense says that you have to deduct VAT and the dealer mark up from the price of a new guitar. 
    Sorry I don't understand this at all. Imagine VAT was increased to an insanely high level, and a £1,000 guitar now costs £10,000, with £9,000 being VAT. Would you expect the used market to start below £1,000? Why? If I had a mint example and offered it at £7,000 it would still represent a big saving over the new price.

    Used prices for recent or current models must be closely related to the cost of buying new, regardless of the elements of tax or mark up. Of course, there are other factors such as desirability and rarity, but I don't see the relevance of VAT or mark up in terms of resale values.
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  • Strat54Strat54 Frets: 2329
    Try selling a 'new' guitar back to the dealer the next month then. He's not going to pay you more than he can get a new one for.
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  • BigsbyBigsby Frets: 2913
    Strat54 said:
    Try selling a 'new' guitar back to the dealer the next month then. He's not going to pay you more than he can get a new one for.
    Hmmmm, can't say I've tried that, nor imagine I ever would. Doesn't really have much to do with resale values does it? I think you're confusing the trade-in value (what a dealer will give) with the secondhand value (what a private buyer will pay), and the latter is only related to VAT in terms of how high the VAT makes the RRP. 
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  • BridgehouseBridgehouse Frets: 24578
    Value will always be influenced by warranty - perceived or implied. If you buy direct from a high end maker you get the full weight of their support. You can’t rely on that if it’s used. 

    Similarly, if I decide to buy a used guitar that’s 12 months old, I have no idea what’s happened to it in that 12 month period - buy new and I know what I’m getting 100% - if it develops a fault, the maker will rectify. If I buy used, who knows what faults may develop - and as a “sold as seen item” I’m forking out for repairs. 
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  • NelsonPNelsonP Frets: 3347
    Depreciation only seems to happen to the guitars I own. 

    The ones I want to buy seems to all be at the original RRP, or sometimes higher.

    How does that work?
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  • octatonicoctatonic Frets: 33725
    edited December 2018
    When a dealer sells a guitar that are usually buying it for a minimum of 30% off the ex-VAT price.

    So £2000 - 20% is £1600 - 30% = £1120.

    I usually think that the used price for a guitar is about 60% of the retail price, which is slightly higher than what the dealer buys it from the manufacturer or distributor for. So in that sense guitars don't really lose much at all.

    Here in Singapore used prices are higher than 60% of retail because it is a much smaller market and people buy from abroad.
    What I am saying here is it is all about supply and demand and nothing to do with the guitar itself.
    The best Les Paul in the world is worth exactly the same as any other Les Paul with the same spec to most people.

    The notion that 'certain' guitars are worth more because they are 'just so good' is nonsense though.
    We all like different things.

    My absolute favourite guitar in the world is an Anderson strat that I know had at least two owners before I bought it.
    It is the best guitar I have ever played and yet two people decided that it wasn't for them.
    Go figure.
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  • VoxmanVoxman Frets: 4718
    edited December 2018
    New guitars have VAT and a mark up for the retailer to make a profit, and the retailer is also responsible in the first instance for any problems so all this is reflected in the price. Brand new guitars should also (at least in theory!) be mint in every way.  Aside from my first two guitars that I bought when I waa a teenager, every other guitar I've bought since has been pre-owned and is now worth (in the majority of cases considerably) more than I paid.  This includes 4 USA Fenders, 2 Gibsons, 1 PRS, and an Epiphone. 
    I started out with nothing..... but I've still got most of it left (Seasick Steve)
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  • Does anyone really put a value on a warranty? I a car yes....a guitar??....really?... I think if I was buying a brand new guitar and there were 2 prices....one with warranty and a lesser one without a warranty...it would be the lower every time.
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  • Does anyone really put a value on a warranty? I a car yes....a guitar??....really?... I think if I was buying a brand new guitar and there were 2 prices....one with warranty and a lesser one without a warranty...it would be the lower every time.
    I agree with this - the chances of a significant fault developing outside of a warranty period is as close to nil as makes no difference.
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  • jeztone2jeztone2 Frets: 2160
    I’ve done alright out of the guitars I’ve sold on. Usually holding my money, sometimes getting ahead. The only time I’ve lost out was when I lost my job in 2006 & had to sell on all but two. But otherwise It’s never been a problem. 
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  • mgawmgaw Frets: 5239
    edited December 2018
    I have given up worrying about losing money on gear, I spend my time and energy ensuring I don't overpay for anything 2nd hand and if its new...well there is a big hit coming...warranties on amps have proved to be extremely worthwhile so if I was going for a high end pricey amp its either new or if 2nd hand extremely good value...

    if you pay with paypal there is protection for months (within reason)

    I have never encountered a guitar that has needed  its warranty used
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  • mgaw said:
    I have given up worrying about losing money on gear, I spend my time and energy ensuring I don't overpay for anything 2nd hand and if its new...well there is a big hit coming...warranties on amps have proved to be extremely worthwhile so if I was going for a high end pricey amp its either new or if 2nd hand extremely good value...

    if you pay with paypal there is protection for months (within reason)

    I have never encountered a guitar that has needed  its warranty used
    Have you kept a guitar long enough Mark? :)
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  • Adam_MDAdam_MD Frets: 3420
    AlexO said:
    They don't if you are a bedroom dealer...


    There’s a bedroom dealer about 12 miles from me and he’s made it impossible to browse gumtree now by reuploading his entire stock every 3 days.  

    I sold a guitar last week and I’m pretty sure 3 of the people contacting me were his sock puppets.  2 of them were sending me really lowball offers while one was more reasonable but still less than I wanted to take.  Thankfully I sold it for the asking price to someone else and didn’t have to deal with him.  
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  • I think it's fairly clear. Putting the VAT logic aside, it's fairly clear that no-one is going to pay full retail for a used version of the same model even it it's pristine, assuming that model is readily available in stores.

    There are obvious caveats to that, mostly revolving around sale prices and/or location. I paid a shade over 1600 for my ES-330 between a great sale price and an excellent VAT reclaim as I live outside the UK. In the UAE market there are no other ES-330s (it's quite likely mine is the only one in the country, at least red/VOS ones), so I expect to easily clear that figure if I sell it on the used market. But there's also a much smaller base of guitar players with money for gear, so finding a buyer would likely take more time. My Dove was a similar story - it took 4 months to find a seller but I got a chunk more than I would have in the UK. 

    That said, there is no real reason for depreciation on an already-used guitar. Depreciation, in theory, is about the useful life of an item. A 5-year old Strat isn't any less useful than a 1-year old one assuming the same levels of fretwear etc.
    The Assumptions - UAE party band for all your rock & soul desires
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  • mgawmgaw Frets: 5239
    wesker123 said:
    mgaw said:
    I have given up worrying about losing money on gear, I spend my time and energy ensuring I don't overpay for anything 2nd hand and if its new...well there is a big hit coming...warranties on amps have proved to be extremely worthwhile so if I was going for a high end pricey amp its either new or if 2nd hand extremely good value...

    if you pay with paypal there is protection for months (within reason)

    I have never encountered a guitar that has needed  its warranty used
    Have you kept a guitar long enough Mark? :)no
    not really had a few for a while once, but generally the churn is ridiculous but informative and good fun...got my First Hahn Telecaster @wesker123 which is this weeks best guitar I have ever had....which it is :)
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