Watches – Secondary Market Prices

On What Basis Are You Insuring Your Clients’ Watches….?

James Lowe, Watch and Jewellery Specialist

Download this article

Certain watches, including some Rolex and Patek Philippe models have a 2-5 year waiting list due to brand exclusivity protection.
This can decide how your clients may choose to replace their watches in the event of a claim. During a valuation we establish how and where the client would likely source a replacement in the event of a loss.

1. Is the policy new for old?
2. Will they look at going direct to Rolex or Patek to replace?
3. Is the value based on a second-hand replacement value?
4. Is there a waiting list?
5. Has the watch been purchased as a collector’s item or as an investment?

Patek Philippe
A steel Nautilus bracelet watch with annual calendar, day, date and moonphase, ref. 5726/1A
RRP. £35,160
Secondary market value £110,000

 

Patek Philippe
An 18 carat rose gold Nautilus wrist watch with date, power reserve, moon phase and seconds, Ref. 5712R
RRP. £34,640
Secondary market value £65,000

As we know, HMRC regard watches as ‘wasting assets’ and as such do not charge Capital Gains Tax on any profit after sale. This can be viewed as a rare gift from the taxman and has consequently attracted many collectors to the watch market.

On discussions during a valuation the client may look to replace “Like for Like” rather than replacing with a similar current model, as many watches are no longer available as the model might be obsolete. Our valuation would clearly state that our value is based on the current model availability from the retailer today.

Rolex
A steel bracelet watch Oyster perpetual Sea Dweller 4,000 metre model, ref. 116600
RRP. £9300
Secondary market value £12,500

 

Rolex
A steel bracelet watch Oyster perpetual Cosmograph Daytona black dial and bezel, ref. 116500LN
RRP. £10,500
Secondary market value £22,500

However, some models of watches have a waiting list, so if the client chooses not to wait then the only option is to turn to the open market where you can replace immediately but with a much higher price, thus effecting valuation. Our valuation will clearly state the methodology used behind determining the value.

But what value do you accept in these scenarios?