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Making Depreciation Work to Your Advantage

written by A.Morgan - 16th Jan 2012

Can depreciation, the worst feature of a new watch, become the best?

The biggest turn-off for a watch purchase is the knowledge that walking out of the store with it will send its value falling faster to the floor than freshly buttered toast – and never more so than in this dire time of austerity – but why, like a good martial arts fighter, don’t we use the momentum rather than waste money resisting it? Confused? Read on.

Think of all those watches that have taken your fancy in the past, but have been immediately dismissed because they lack rock-solid residuals – more often than not, this very sensible concern draws us all away from what we really want and back to the five-pronged crown. Well, take that shoe off and put it on the other foot, because now you can indulge in your favourite brands rather than run away from them by coming at the market from another angle.

Here’s an example; buy a Bell & Ross BR01-94 and you’ll lose around 20-25% of the value just by handing over your card and purchasing the thing, so why not buy from the person who made that loss instead? A year or so old version will save you north of £1000. Or perhaps something a little classier? A Jaeger-LeCoultre Master Geographic maybe? With an RRP of nearly £8,000, it’s a little out of reach for most, but just a few years old and it can be yours for less than half that cost.

The news gets better as well, because once you’ve snagged one of these cheeky bargains, your purchase is unlikely to lose anywhere near the same amount in value again, so you can rest easy should you ever come to move it on that it won’t be worth a pittance.

So how do you track down a brand that is likely to yield a bargain? Firstly, move away from the mainstream, because you won’t find too many bargains from the likes of Rolex or Panerai (although there are still not-inconsiderable savings to be made), and instead direct your attention to the more expensive brands (it seems an odd thought that to save money you would need to look at something more expensive, but bear with me). Audemars Piguet, IWC and Jaeger-LeCoultre all reap huge savings, putting some extremely tasty metal in your hands at prices that in some cases wouldn’t even buy a new sports Rolex.

Then there are the brands that suffer heavy enough depreciation to make your eyes water – the nautically-themed Corums and Ulysse Nardins, for example, make very good purchases as a second owner. Anything niche, a bit rarer and more stylistic will virtually always yield good results, as well as offering the most unique designs and impressive workmanship. It really is as simple as that! Just make sure to do your research – easily done online – and there’s nothing else to it. The only problem left is how to decide which watch you’re going to buy next…