So, you’ve just purchased your first luxury wristwatch, and after a home or car, this may be the biggest purchase you’ve ever made. Fortunately, now that it’s on your wrist, all that’s left is to enjoy it… right?
Well, not so fast. There are some additional costs that come along with owning a high-end mechanical timepiece that should be taken into account. We discuss just those on this page:
Once you’re caught on up on these, you’ll be well-equipped to wear and care for your timepieces like the most prolific watch collectors around.
As watch collectors ourselves, we wanted to put together a guide that provided a broad view of the hard and potential costs that come along with owning a luxury timepiece.
You may be aware of some of them already as they are widely discussed, such as the costs of servicing a timepiece. On the other hand, there are others, like opportunity cost, which are not often brought up.
We’ve included both of these along with various others, so that you can take them into account before spending your hard-earned cash. Depending on the value of your watch, some will be more important than others, but all should be kept in mind when shopping around.
Although it usually goes without saying, we’ve also included a section on the largest cost of watch ownership – the purchase. In this section, we discuss the different avenues for purchase, as well as the pros and cons of each.
We start off with this topic, so if you’d like to jump ahead, use the quick-links in the previous section. Otherwise, continue scrolling to read it all!
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The Purchase Price
Obviously, the biggest cost of owning a timepiece is going to be paid up-front at the time of purchase. The price you pay, on the other hand, will come down to who you’re purchasing the watch from.
Purchasing From An Individual
For the most part, if you purchase a watch outright from another individual, you are likely to pay the lowest price. Unfortunately, whatever cash can be saved through these types of transactions could be quickly overshadowed by issues that may arise later on.
Most importantly, when you buy a timepiece directly off the previous owner, you will not receive any kind of warranty. While it’s true that the manufacturer’s warranty can be exercised by a person who did not first purchase the timepiece, there are very strict guidelines that must be followed for the warranty to remain valid.
For example, if a watch covered by the manufacturer’s warranty has been opened, whether for a repair or to be refinished, then the warranty is automatically voided. Unfortunately, it’s easy for someone to lie about a watch’s past when unloading it onto someone else, leaving issues (and bills) to be handled by the new owner.
Additionally, a brand’s watchmakers possess various ways of knowing when a watch has been previously opened, and will be quick to point these out and deny any kind of warranty repair if such tampering is detected.
Purchasing From A Watch Dealer
A safer and also more expensive option to purchasing from another collector is to purchase from a dealer. That said, there are some excellent watch dealers such as Bob’s Watches that specialise in pre-owned certified timepieces that offer affordable options.
The majority of these shops have some kind of return policy, as well as a warranty period from the time of purchase which usually lasts 12 months.
Admittedly, we are big fans of return periods. Not because you should abuse them, but rather because we have ourselves experienced instances where we love a watch in pictures, but just don’t like how it fits on the wrist.
This is more common than you’d think, and is a big issue when purchasing watches online. A return policy helps alleviate this concern almost completely.
Note that you should not actively wear a watch before you’ve decided to keep it. It’s relatively easy to lightly tarnish a timepiece, and any kind of use generally negates return policies or can incur significant ‘restocking fees’.
Warranties offered by watch dealers will usually cover any kind of mechanical issue that arises during the coverage period. You should also understand that if the issues arise from an accident during wear, such as a hard hit or a drop of the timepiece, it is unlikely to be covered by the dealer. Essentially, if you are at fault for the issue, then you’re likely to foot the bill.
On the other hand, if you find that your watch is performing poorly just a couple of months after purchase, the dealer will usually honor the warranty and service the watch at no cost to you. This service will not include any kind of refinish or polishing work, unless you’ve previously established a strong relationship with the seller.
Having to return a watch, or having to send it in for a warranty repair, both sound like lousy circumstances, but there is some benefit here. It is in these situations that you should evaluate the attention offered to you by a dealer.
Purchasing experiences are consistently smooth, but when issues arise is when the true colors shine through. Use this time to consider whether the customer service is up to your standards, or whether it’s time to take your business elsewhere. With such a significant purchase, all aspects of the experience should be pleasant. If they’re not, be ready to walk.
Purchasing From An Authorized Dealer
An authorized dealer is the only retailer that can sell you a watch in new condition. In fact, if you’re purchasing it anywhere else, then technically it is not considered new.
This is due to the fact that the authorized dealer will sign or electronically activate your timepiece’s warranty card, at which point the period of coverage by the manufacturer for defects will begin.
At an authorized dealer is also where you will pay the highest price for a watch. Depending on the brand, you may be able to get a discount on the MSRP, but don’t expect more than a 5-10% price break, if there’s any at all.
The premium paid here is largely derived from the experience, which should itself be incredibly pleasant and luxurious (to say the least). There’s also the virtue that the watch should be completely unworn, in brand spankin’ new condition, and completely free from any kind of mechanical defects.
Lastly, you can be completely sure that the timepiece is authentic, and has not been internally tampered with in any way.
Authorized dealers also tend to offer return periods, but the same conditions previously mentioned apply. Before purchasing, make sure you are clearly aware of the situations in which your return would be accepted so that you are not stuck with an undesired watch if you change your mind.
How Much Does It Cost To Insure A Watch?
In the same manner in which you’d purchase insurance for a car, you should purchase insurance for your timepiece to guard against theft, damage, or loss. Naturally, each insurance provider will have different terms and value amounts that they will cover.
Additionally, when looking into watch insurance plans, it’s important to consider how your insurance provider will replace your timepiece in case the insurance policy is exercised. Some may provide a cash disbursement, while others may try to replace the timepiece.
The latter scenario is unlikely, as many watch models tend to be discontinued and can not be purchased new again. On the other hand, if you’re insuring a high-price vintage model, the insurance plan may not cover the actual market value of the watch, and may even disburse an amount of money far below the value of the watch.
This is where an appraisal comes in. An appraisal is a document that the watch seller should be able to provide to you once your purchase your timepiece. It’s also likely to be required by the insurance company before your timepiece is covered.
On the appraisal, there are some important bits of information individual to your timepiece which should be indicated. Some of these include:
- Reference Number
- Serial Number
- Purchase Price
This kind of ‘official’ document is what will allow you to attain coverage for your watch, though your specific insurance provider may require more details, such as pictures of the timepiece to record it’s condition.
Adding To An Existing Policy
Some home insurance policies will allow you to “add on” valuables to the existing insurance policy. Unfortunately, these can be quite limited in their coverage, and may not reach the dollar amount necessary to cover timepieces.
These may also be limited in their scope of coverage, and are quite possibly insufficient in their breadth for a luxury timepiece.
What’s Actually Covered?
In general, you should always ask your insurance provider about specific situations where you may or may not be covered. For example, what if the watch breaks while being worn? What if the watch is stolen while you’re wearing it? What if you are the victim of a break-in and the watch is taken from your home? And what if it’s stolen while on vacation? This last one occurs regularly, if popular online watch forums are to be believed.
When dealing with expensive timepieces, you should not be ashamed to be fastidious with your queries regarding coverage. And more than ever, you should make sure to get any affirmations regarding coverage on paper, in case issues arise down the line.
There are various options online that deal exclusively with jewelry insurance coverage and, more specifically, with luxury watches. These policies will usually range in price from 1-2% of your watch’s value and are paid on a yearly basis.
Naturally, you have different options as to the insurance premium and the deductible amount. With a higher deductible, you’ll have a lower premium. The opposite is also true.
Where Is The Watch Stored?
You may be surprised to learn that insurance companies will charge you a lower premium depending on where you keep your timepiece.
If the watch is stored at home and not in a safe, you’re likely to face the highest premiums. On the other hand, if the watch is consistently kept in a bank deposit box, the premium is likely to be significantly lower.
With how expensive timepieces can be, a 1 or 2% difference in insurance premium can add up to thousands per year. If you find that you’re not wearing a watch regularly anymore, you should definitely consider the bank deposit option, as it could save you some serious cash in the long run.
How Much Does A Watch Service Cost?
As was the case with watch insurance above, the cost of servicing a watch will vary wildly depending on the timepiece and the service center.
Service At The Brand
The most expensive service option is sending the watch to the brand’s watchmakers. In many cases, the watch must make its way to Switzerland (or other home country) to be serviced, which can significantly increase the length of time that you spend without your watch.
The specific model and complications will also affect the service cost. A simple date watch will cost significantly less than a perpetual calendar to service. The time spent at the manufacturer will also be longer for the more complicated timepiece.
The same is true for the case metal. Precious metal watches require expertise to refinish properly, so this will be reflected in the final price. Alternatively, exotic case materials like ceramic or carbon fiber cannot be refinished, so entire components will have to be replaced. This, too, will show up in the final bill.
The biggest benefit of paying a premium to send your watch to the brand is that you can rest easy knowing that your timepiece is in the best hands. Any replacement parts required will be legitimate. The watchmaker will also be of the highest pedigree, as brands are very strict about who they hire and the process that these individuals have to follow when working.
Lastly, a service at the brand will always be backed up by a service warranty. These are usually between 12-24 months long and will cover any mechanical issues that arise with the watch. Of course, if the damage is caused by your clumsiness, it probably won’t be a free repair.
Service At An Authorized Dealer
Many authorized dealers which have brand-certified watchmakers on site will be able to work on your watch. These watchmakers are also able to obtain original parts from the brand, which ensures that the provenance of the watch is maintained.
This option can be slightly less expensive and take less time, given the fact that your watch doesn’t have to be shipped halfway around the world.
The disadvantages of this option is that brand-certified watchmakers can’t work on every single movement. The most complicated timepieces will always have to be sent directly to the brand’s facility; this needs to be acknowledged at the time of purchase, as there’s really no safe way around it.
Service At A Local Watchmaker
Servicing your watch with a local watchmaker is the least expensive option while also being the riskiest, so to speak. It’s likely that the local watchmaker is not able to obtain new parts from the brand, so they may have to recycle them or obtain them through other means.
Nevertheless, always ask your watchmaker regarding this point. If they’re able to use new parts for your watch, are located nearby, and provide their services at a much lower price, then this is a watchmaker to hold on to.
As with most matters, it’s a good idea to get to know your watchmaker. Not only because it will improve your service experience, but also because watchmakers are the ultimate watch guys!
They literally spend their entire day working on watches. If that’s not love for horology, then I don’t know what is. They may also be able to teach you a thing or two, and are likely to have plenty of valuable advice regarding watches in general.
The Opportunity Cost Of Watch Ownership
The last ‘cost’ to consider when purchasing a luxury watch is the opportunity cost, given that many folks see watches as an investment, or at least as a safe store of value.
As with all investments, you should consider whether your money could be accruing at a greater rate, or depreciating at a lesser rate, somewhere else. Truth be told, there’s very few watches which produce a ROI, so it’s almost unreasonable to expect any kind of appreciation.
Also take into account that watches are, in financial terms, an illiquid asset. If you’re pressed for cash and need to sell one or more timepieces to cover other expenses, you will be forced to accept a price lower than the actual value of your watches.
Even with the above points in mind, and especially if you’re a self-proclaimed “watch guy”, then you know that wristwatches bring a lot of enjoyment to those who collect them.
The amount of joy that a watch can bring is impossible to translate into dollars and cents, but it’s likely more palpable than that of other investments. So, concentrate more on having fun, less on making money, and you’re sure to be rewarded.
More Watch Guides
We’d love to hear your thoughts in the comments section below! Also, if you’ve got any questions not answered by the content on this page, leave us a note here and we’ll gladly chime in. Otherwise, check out some of our other popular watch guides below:
- Should You Buy New Or Pre-Owned? An In-Depth Analysis
- Browse For Certified Swiss Watches On Bob’s Watches
- Why Collect & How To Start Your Own Timepiece Collection
- How Many Of These Watch Complications Are You Familiar With?
- Rolex Brand History & Models Guide
- Bespoke Unit Watch Homepage
"A well-written and knowledgeable article. There's tons of info here regarding owning a watch that you won't find anywhere else."Rating: 5.0★★★★★