Is a Rolex a good investment?

In a world where the price of Rolex is on the rise, it’s tempting to see it as less of an investment and more of a risk; this, however, simply isn’t the case.

With its crown already in place, Rolex, the king of watches, is anticipated to raise prices once again in 2021. With an increase in both 2016 and 2018 and an average retail price upswing of 7.4% in 2020, Rolex isn’t hiking its costs for fun. It’s a response to global inflation absolutely, but it is also the method by which Rolex makes sure its position at the high end of the luxury market is ringfenced. Smarter still, Rolex increases the cost of some models more than others, with a Rolex Daytona now costing around £1,500 more than in 2019, while the Rolex Day-Date has increased by £2,000. That’s how you create a demand for supply.

But, of course, Rolex remains resolute in its production schedule, only making a certain number of watches every year. For those of you already with a Rolex, the good news is that the value of a Rolex will rise along with the price hikes. If you are looking for a loan against your luxury Rolex, then Suttons and Robertsons’ specialist watch team can offer you the best offer, and you could borrow up to £2M in 24 hours.

What Drives Rolex Demand?

With a production schedule of around 1 million Rolex per year and an active and ready-to-buy market of many times more that, it means that buyers are prepared to turn to pre-owned Rolex just so that they can seal the deal. For purists and collectors, this means that they are in with a shout of sourcing a special edition or particular model long after its initial release.

Consider the Paul Newman 1968 Rolex Daytona, which was sold in 2017 for $17.8 million in New York; It’s a Rolex owned by one of the biggest movie stars of his generation, but it is the combination of watch, model and pre-owner that sprinkles millions of dollars of glitter over this watch’s value.

Why does Rolex hold its value?

Rolex is like gold; two of the few commodities in the modern world that have gone up in price – even during the pandemic.

Why?

The Rolex brand name, itself, pushes the value up. Sometimes mysterious and even aloof, the brand and its ambassadors rarely seem to put a foot wrong reputationally. This dates all the way back to the origins of their brand in 1905. Rolex also refuses to compromise on the quality of their materials; when you’re investing in a product that you need to see a good return on, quality is everything.

A simple figure, perhaps, but it is estimated that a Rolex traditionally increases in value by 5-15 per cent each year.

What sort of loan would I get for my Rolex?

That would depend on the model that you currently own. There is always an active and vibrant market for sports models, such as the Submariner and the Daytona. There is also a huge demand for chronological legends, such as the Date-Just and the Oyster Perpetual. If you’ve got your hands on a piece of pop culture, say the Hulk or the Kermit, you could see a superb return on investment. If you’ve gone for a limited edition with a special colour feature that failed to catch the imagination of the collecting world, then your resale price might not be as high as anticipated.

Submariner Track and Trace

Introduced in 1954, the Submariner has only grown in cost, value and esteem. Developed for the deep blue sea, you are as likely to spot a Sub around a dinner table or in the board room as 500ft under the sea.

  • 1950s cost – around £115. Taking inflation into account, that would be just over £1,100
  • Early 1970s – 18ct Rolex Submariner sells for about £170 or £1090 with inflation.
  • 1980s – Rolex became both a byword for luxury and the must-have status symbol, reflected in the price (with a huge jump) of £8,350 or just over £20,670 with inflation.
  • By the 1990s, the stainless steel Submariner Date stood at nearly £2,580.
  • In 2008, the Rolex Submariner Date Reference 16610 was set at £4,618
  • In the year of the London Olympics, the Submariner ref 116610V was around £6,966, the Submariner 116619 priced at almost £28,359, and the Submariner 116618 was £26,362.

Today, you would be expecting to pay in the region of £6,880 for a brand-new Submariner Reference 116610 – if you can find one or somehow get moved to the front of a very long waiting list.

Rolex – A Rise in Cost is a Rise in Value

Let’s revisit some of our key figures. Even with inflation, a 1950s Submariner would cost around £1100 today; however, we can see that the modern Rolex Submariner in Yellow Gold is actually currently priced around £29,500 while a Submariner OysterSteel is £6450.00.

This rise isn’t inflation, but it is directly attributable to the level of research and development that Rolex has poured into their watches. Yes, they can play with colours and materials, but, at the same time, they are also pushing the boundaries of the materials that they use. OysterSteel is not a Rolex invention, but the brand has taken steel from the 904L family – normally reserved for surgical use- and almost appropriated it as their own through clever brand wording. Nevertheless, while Rolex didn’t create the 904L alloy used in OysterSteel, they certainly have polished it to perfection and created strong, durable and corrosion-resistant watches that endure the test of time.

Rolex – Get Out More Than You Put In

Here’s the rub with Rolex – it is probable that you will get out, often considerably, more than you put in. When you’re thinking about buying a luxury item, there are not many others that measure well against a Rolex. With a Rolex, you can buy it, love it, wear it, leave it to the next generation and still get an expert valuation of your asset from Suttons and Robertsons. With a Rolex, the question isn’t if it is a good investment; the question is what percentage return on investment can I look forward to.

 

Looking to loan against or sell your Rolex watchContact us today for a free quote. You can also shop our pre-owned Rolex products online.