I have several locomotives that were mint and new in box, but were produced from 2002 to 2005 and their value is 50% of what I paid for them. Why do they depreciate so bad even though they are new/mint?
todd
Lack of demand. We love them, but not everyone sees the world through train-coloured glasses like we do (shame that). If this hobby ever becomes fashionable, that might change.
God knows we love our little choo-choos, but I don't buy 'em as an investment. There's not a lot of things sadder than a toy that never comes out of its box...
All the best,
Stu
Streamlined steam, oh, what a dream!!
Why would model trains be different than any other product we buy? Heck you buy a brand new car, drive it off the lot, and it depreciates by 35%.
Do you buy a TV, keep it in the box brand new, and after 7 years and expect it not to depreciate by 70%.
Michael
CEO- Mile-HI-RailroadPrototype: D&RGW Moffat Line 1989
Have fun with your trains
Rastafarr Lack of demand.
Lack of demand.
Agreed.
But, it is also a matter of supply. There were a lot built and a lot are still available, even new.
Rich
Alton Junction
Major video game releases can depreciate 50% in value over the span of months and that's a multi-billion dollar industry. Literally everything loses value at a huge rate.
Train models are not original Picassos, Ming vases or holy objects to any recognized religion. They are toys for (supposedly) adults and adolescents. As such, their value is whatever someone is willing to pay for them - which is also true for Ming vases and Picassos, but the dynamics differ.
You might get a substantial return on investment if you offer them on E-bay and generate a bidding war. There have been numerous threads about the preposterous prices paid by E-bay bidders for mundane items, so you might get lucky. (Don't bet the mortgage on it.)
Chuck (Modeling Central Japan in September, 1964)
Very few models actually appreciate in value over the years - like the famous Marklin "Crocodile" of 1948 vintage. It sold for the horrendous amount of 72 Deutschmarks ($ 17) and sells for $ 2.200 these days.
Model trains are mass-produced toys, only very rare items make it into the hall of fame.
Time and sentiment are factors as well. Who wants to pay $60K for a ten year-old Corvette? Would anyone pay for a 45 year-old Corvette? Yup, and if all the parts are mint and original, probably a lot more than the $60K.
Many thousands of our train models have been produced, and the ones we have used since the onset of DCC have not appreciated in value. Even brass can be had for a song these days, although rare locos that get run do very nicely for price, thanks very much. I still see 2-8-8-4 runs from ten years ago going for about what they were brought to market back then, sometimes considerably more if they are exceptionally fine and highly regarded as a model...and few...and in good condition.
It may be that our Paragon/Spectrum/Genesis/Master locomotives will come close to their original value in time, but they'd have to be somewhat rare, really well looked after, and highly sought. I doubt that will happen within the next 20 years.
Crandell
NittanyLion Major video game releases can depreciate 50% in value over the span of months and that's a multi-billion dollar industry. Literally everything loses value at a huge rate.
There are some games that actually increased in value because they are extremely rare and in high demand..
As far as model trains there are some that increase in value while others slide off the bottom.
The majority have no real clue what some of their models are worth because of myths and well meaning but, misleading information.
Larry
Conductor.
Summerset Ry.
"Stay Alert, Don't get hurt Safety First!"
Even some expensive brass trains have depreciated over time but makers like Key or Overland keep their value longer. I have picked up some brass locos on the cheap where when new they sold for more than twice what I paid. The plastic stuff will never appreciate when there are successive runs and improvements in details and quality.
If you want an investment in model trains the some time travel to pre war tinplate era is needed. And don't forget the boxes.
Pete
I pray every day I break even, Cause I can really use the money!
I started with nothing and still have most of it left!
locoi1sa If you want an investment in model trains the some time travel to pre war tinplate era is needed. And don't forget the boxes. Pete
Priced a United 2 or 3 truck Shay lately?
Suffice it to say I would love to be able to travel back in time and stock up on those Shays.
A P2K Ohio Central GP7 is another that went up sufficiently in price.Unbelievable what they engine can fetch.
Hi,
How did you get the 50 percent number? In my experience (I've sold a lot of train stuff over the years - most all on Ebay), that number can vary so much - depending of course on timing and your audience.
Selling on an auction site is a good measure of value, as the buyers are almost always "end users". And timing is the big variable. One measure for model trains is selling in the winter vs. the summer - as the amount of buyers are significantly higher in the winter (duh...).
Every year for the last 11, I have run 50-100 auctions around Christmas. Many times what doesn't sell one week will be the subject of a bidding war a week or two later. In example, I had two sets of Rivorossi Illinois Central passenger cars - like new, in the box - to sell. In 2009, I put them up for a starting amount of $29 each and had no takers - even with a relist. The next year, they sold for $69 & $73, a bit more than what I had originally paid for them.
One piece of advice for selling MR stuff on an auction site....... start the item at the minimum you will take for it. That way, if it sells, you will at least get what you would take, and not be "giving it away".
ENJOY !
Mobilman44
Living in southeast Texas, formerly modeling the "postwar" Santa Fe and Illinois Central
mobilman44One piece of advice for selling MR stuff on an auction site....... start the item at the minimum you will take for it. That way, if it sells, you will at least get what you would take, and not be "giving it away".
Excellent advice.
I'll add when selling on the local use market or train show jack your price slightly above what you want and allow the buyer to talk you down to your price--if he even bothers to negotiate the price.
If you purchase them at a low price to start with they will go up in value. You also have to purchase the right ones.
In the late 1980,s i had a collection of Lionel trains with $2500.00 invested I sold them for over $6000.00.
I also in the 1990,s i had alot of n gauge i purchased online thru ebay, Trainworld, and other discount sellers. When i switched to HO i sold most of it for what i paid or higher. All of the Con-Cor Boxed sets i sold for a very good profit. Have you looked at Ebay lately. The early used Life-like N engines (GP38 ,GP18.SD,s and E units) are selling used for what they cost 15 years ago. A good Kato also holds it's value very well.
In HO the Bachmann Spectrum, Mantua, AHM steam and Rivarossi engines (If in good shape) all sell at a much higher price than they did when they were on sale 20+ years ago. I sold quite a few HO Rivarossi engine i purchased for $29.95 for well over $100.00.
The Athearn Blue Box engines still hold good value if purchased on sale years ago.
All the early HO Broadway Limited engines are still selling for much higher than the discounted price when they were released. When the GG1 was put on clearance for $125.00 with sound I purchased 5 of them. Few years later i sold 3 of them for over $250.00 each.
Shop around. Keep your stuff in good condition. And after 20 years you might break even. I don't know of another hobby that will give you the same result.
First is the trust issue. I don't know you, so I don't know if your stuff really is NIB - that is you never took it out and/or ran it.
Second is the warranty. If it doesn't run are you going to give me my money back? Does the manufacturer's warranty still cover a ten year old product? will he honor a resale? does he even have parts still to fix it?
Third is obsolescence. Are better products out now?
Fourth is price. What did the last one sell for when everyone was dumping them? What do comparable models sell for now - their discounted price?
All of these conspire to drive prices down.
For rare and desirable items the price may go up. But the only real collector's market for trains is Toy Trains primarily Lionel, but also American Flyer and a few others. Sure, there are a few folks who collect HO, N, etc. But not enough to establish a market.
As with others above, I don't buy trains as an investment. And while I have stuff NIB, it's because I haven't gotten around to building/running it yet. Everything (in 3 scales yet) was bought with the idea of using it. But I confess I buy some things just because I think they are neat even if they don't fit my current S scale early 50's Ma&Pa layout. But I don't pay collector prices, I only buy if it's cheap. Eventually I may set up some small display layouts just to run the stuff.
Good luck
Paul
Heck, my wife says that even I depreciate in value the older I get, why would model trains be any different..LOL just kidding !
Carry on...
Happy modeling!
Don.
"Ladies and gentlemen, I have some good news and some bad news. The bad news is that both engines have failed, and we will be stuck here for some time. The good news is that you decided to take the train and not fly."
Part of the issue is also buying pre-owned equipment, even if supposedly new. There is risk that the seller is misrepresenting something as new / unopened / mint. I bought a pair of sneakers via Amazon that had been soiled slightly, likely because someone bought & returned them in less than mint condition. I've not been burned in the MR purchases I've made (e.g., E-Bay items) but I know there is more risk there than with "new" merchandise.
Modeling HO with a transition era UP bent
I haven't read all the posts, but just checking ebay, from my experience they can easily go up from paid price. I have many locos I purchased in early 2000s on sale from a LHS and they are on ebay for retail price. I have almost always bought at much cheaper prices at LHS. I recently sold a bunch of stuff to an LHS at about 25% of retail, so I lost there, but I didn't want to go through the headaches of ebay.
Richard
Discount retailers start to "depreciate" the value of models as soon as they come out. Places like Trainworld and M.B. Klein have what we call "great" prices, or "street" prices. They buy and sell in quantity. Once models have been on their shelves too long, they reduce the prices even further.
Don't look at the Walthers price as the starting point, because the street price is already lower.
It takes an iron man to play with a toy iron horse.
As noted by many already, old train values can be all over the place. Very few appreciate in value and if you look against inflation many that are truly rare and worth much more now than when new are actually static or have held their value and little or nothing more.
If you collect model trains for investment, (brass, special runs, commemorative specials, etc), then you might not be a model railroader at all, but just a collector who chose trains to invest in.
If you are a true model rail and are looking to buy trains for running, then mint, non-brass stuff from the 50's, 60's, 70's and 80's, and I'm talking motive power here, is pretty much garbage by today's running and operational standards. This is not to even mention true scale detail related appearance being sub-standard by today's critical eyes. I doubt if time will ever favor these old models. Much the same for rolling stock of this period, too.
I wish I had bought Varney's "Old Lady" back in the day when AHC sold them in their 3-4 page adds in MR as effective surplus from Varney's closure for under $30.00, but I would still have a terrible runner, operationally, unless I dumped money into upgrading her. But... that is nostalgia.
MR stuff can certainly be or become collectable, but that doesn't mean it is rare or valuable.
However, an old Varney or Tyco train set from the 50's or 60's pulled out of a rummage sale with its "Little Joe" dockside, 4 cars and oval of brass "Snap Track" is just the thing to infect a young person and make a new or budding model rail who is hooked for life. That is what is rare and valuable about old trains.
Trains are not for collecting, for the most part, but for running and enjoyment by the model rails who love them.
If I can't fix it, I can fix it so it can't be fixed
IRONROOSTER Third is obsolescence. Are better products out now? Good luck Paul
Paul,That's not always the case..Just because a new and improve model is out at a higher price doesn't make the older model obsolete.In fact I recently sold a Atlas/Kato N&W RS11 for $50.00.That's far less then the newer supped up RS11 goes for.
Now the old "fatty" Athearn engines is a hard sell due to the better models available at reasonable prices.
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Now,with NIB or TRO I take with a grain of salt although I've seen new gold box P2K locomotives in a now closed hobby shop at full MSRP.
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About warranty..I doubt if the warranty for a gold or blue box P2K locomotive would be valid since Life Like doesn't do trains now.
Yellow or Red box Atlas engines-Atlas still has some parts for these long out of production locomotives..
I recently picked up two P2K Seaboard System GP38-2s for $52.50 each off e-bay and both was indeed in mint condition and probably never been ran since everything was in its original sealed bags.
narrow gauge nuclearIf you collect model trains for investment, (brass, special runs, commemorative specials, etc), then you might not be a model railroader at all, but just a collector who chose trains to invest in. Trains are not for collecting, for the most part, but for running and enjoyment by the model rails who love them.
Yeah, if you're worried about appreciation/depreciation, get into something other than model railroading. To try to justify what you spend on trains by what you can get in selling them is going to be a great disappointment. All those with that notion can now leave the room and head for ebay, quick, before that glut of models suddenly for sale drives prices down lower.
One thing unmentioned yet are initial sales margin for new products. As a luxury item, margins between wholesale and retail are pretty large. That's why you see large volume retailers offering low prices while some well run LHS can still survive by selling lesser volumes at close to MSRP. There's a lot of room for judgment there on the part of the retailer who knows his customers. Whatever the case, yeah, if you're using MSRP to compare whether you're getting a "deal" or not, there's still considerable mark-up involved at retail to the consumer.
So when you've made your deal and got that model you really wanted at a price you were agreeable with, as soon as the deal is done it's worth half what you just paid for it on the used market -- if you're lucky. Nothing special about that either, as it's the same with many other consumer items that aren't necessities. Now, if you look at food, gasoline, etc, the margins are much smaller, but the turnover is much higher. Just don't expect that to apply to model trains. They're a luxury with relatively slow turnover. That's why the trend to limited runs has taken over with many vendors. Better a quick sell-out and take the profits to the next project than let stock sit.
Mike Lehman
Urbana, IL
mlehmanThat's why the trend to limited runs has taken over with many vendors. Better a quick sell-out and take the profits to the next project than let stock sit.
And that's another reason some road names are worth more then others while other road names drop in value..
If you are buying your trains as an investment you are living in a dream world. If you want to make money selling trains buy a hobby shop.
The value of every item, whether it is a model train or a Rembrandt, is determined by the buyer, not the seller. It is worth what someone is willing to pay for it. Not one penny more. Not one penny less. In my opinion, the average Picasso looks like it should be hanging on someone's refrigerator, but to some people they are worth millions. I have no idea why.
Dave
Lackawanna Route of the Phoebe Snow
Phoebe VetIf you are buying your trains as an investment you are living in a dream world.
Dave,I suspect what most of us is saying if one decides to sell their trains they should get the best price possible and not give them away below their true market value..
BRAKIE IRONROOSTER Third is obsolescence. Are better products out now? Good luck Paul Paul,That's not always the case..Just because a new and improve model is out at a higher price doesn't make the older model obsolete.In fact I recently sold a Atlas/Kato N&W RS11 for $50.00.That's far less then the newer supped up RS11 goes for. ...
...
Larry,
That's actually the point I was trying to make. When better models come out, the older ones drop in price. I didn't mean to say you couldn't use them, just that they sell for less.
I have a Rivarossi V&T 4-4-0 that I bought back in the 70's. I still run it occasionally, but it has the pizza cutter wheels and tender mounted motor. Converting it to DCC would probably be quite a chore. So I doubt it's value is much more than $25 - less than I paid for it actually. But it still runs great on Atlas code 100 track.
IRONROOSTERWhen better models come out, the older ones drop in price. I didn't mean to say you couldn't use them, just that they sell for less.
Absolutely..This opens up possibilities for those with limited budgets.I have bought several older locomotives like those P2K GP38-2s I mention.
For a model locomotive to appreciate significantly, one of two things has to happen.
1. Initial demand (sales) is low when the model first comes out. This discourages the importer/manufacturer from producing more runs of the same locomotive. But a few years later, demand for that model picks up. The relative scaricity drives the price up.
2. Initial sales are good, and demand stays high. But for whatever reason, no subsequent production runs are made. This was done deliberately with some high-end brass locomotives.
In almost every other case, if the manufacturer senses sufficient demand, additional production runs will be made. After all, the tooling is paid for by the first run. The second and subsequent runs are almost always more profitable (and less risky for the importer/manufacturer) than the first. The additional production runs soak up the demand that would otherwise drive appreciation.
my thoughts, your choices
Fred W
IRONROOSTER First is the trust issue. I don't know you, so I don't know if your stuff really is NIB - that is you never took it out and/or ran it. Second is the warranty. If it doesn't run are you going to give me my money back? Does the manufacturer's warranty still cover a ten year old product? will he honor a resale? does he even have parts still to fix it? Third is obsolescence. Are better products out now? Fourth is price. What did the last one sell for when everyone was dumping them? What do comparable models sell for now - their discounted price? All of these conspire to drive prices down. For rare and desirable items the price may go up. But the only real collector's market for trains is Toy Trains primarily Lionel, but also American Flyer and a few others. Sure, there are a few folks who collect HO, N, etc. But not enough to establish a market. As with others above, I don't buy trains as an investment. And while I have stuff NIB, it's because I haven't gotten around to building/running it yet. Everything (in 3 scales yet) was bought with the idea of using it. But I confess I buy some things just because I think they are neat even if they don't fit my current S scale early 50's Ma&Pa layout. But I don't pay collector prices, I only buy if it's cheap. Eventually I may set up some small display layouts just to run the stuff. Good luck Paul
Paul, great points, And I will give the OP a living example - I hardly ever buy anybodies used stuff. So most of it has ZERO value to me once it rolls out of the hobby shop.
I am very selective about buying "new old stock" or previously owned "new in the box", and it better be a deal or I'm not interested.
And, I agree with Paul about "dumped" product. In the "old days" retailers/wholesalers and manufacturers did not "dump" product at cheap prices after "introductory" sales slowed down, and there was very little discounting 30-40 years ago. So retail values were more stable, but the "used" market was even smaller then. Not many train shows or swap meets.
But today's "limited production" marketing designed to sell out each production run actually lowers market values, rather than rasing it. Because the secondary market price will NEVER be higher than the "dump" price or the lowest common discount price when the item was new. Guess what? Those dump prices are typically 50% of retail - so even a mint, still in the box, 5-10 year old model is worth exactly that - 50% or less of the original MSRP.
I have bought a large percentage of my loco fleet at dump sale prices - I would have paid more, but I did not have to - so I didn't, and someone lost out. But what could I possibly know about this business, I've just been in this hobby since 1968 and spend my first decade in this hobby also working in/managing a hobby shop.
Sheldon