Do Diamond Rings Depreciate?

[Aurora43]

Many things like homes or cars depreciate as soon as they are sold unless there is a lot of upgrading done on them. Is this the case with a diamond ring as well? Or, do they become more valuable with age if they are still in mint condition?

 

[Bron357]

When you buy a diamond ring from a store (for eg) part of the price you paid is shop markup and taxes. When you have a setting made you are paying extra for the designers experience and labour costs. So a second hand ring is always worth less than you paid for it. Another resale issue is that most people want and expect a "brand new ring" with no history or previous owner so when you sell a "second hand ring" it must be cheaper than the new equivalent. So a diamond ring isn't an "investment" as such but it does have a diamond value, gold value and if a fancy designer name made it (think Tiffany or Cartier) a designer name value. Diamonds aren't rare as such but if you have a very large diamond in a high colour, cut and clarity it will certainly always be saleable at a good price.

 

[iwantsparkle]

Many things like homes or cars depreciate as soon as they are sold unless there is a lot of upgrading done on them. Is this the case with a diamond ring as well? Or, do they become more valuable with age if they are still in mint condition?

I think there isn't a simple answer. I agree that cars depreciate as soon as you drive them off the lot. Houses? It totally depends on the market. I live in a hot market and our house continues to increase in value (without upgrading) because it is what the market currently dictates. It all just depends.

I think generally speaking, diamonds are not to be considered an investment. A diamond may be worth more than you paid for it if you hold on to it for a long time.

 

[whitewave]

It has trade value.

 

[diamondseeker2006]

Sometimes diamond prices go up and sometimes they go down. Generally over long periods of time they have increased. But if you pay retail for a ring (or almost anything else) and go try to sell it second hand soon after, you likely are going to lose a significant percentage of the diamond price. I have bought a diamond before and prices rose fairly sharply a few years later, and I sold it and made a profit (and bought another diamond). But I would never count on that. It's just nice to buy when prices are relatively low, and now is one of those times.

Buying from a vendor with an upgrade policy is a great way to get the full amount you paid applied toward the new stone (as long as you are buying from a vendor with competitive pricing, such as the vendors we know here).

 

[denverappraiser]

Many things like homes or cars depreciate as soon as they are sold unless there is a lot of upgrading done on them. Is this the case with a diamond ring as well? Or, do they become more valuable with age if they are still in mint condition?

Yes.

The problem is twofold. First, it's a fashion product. What's hot now won't be hot in the future. Just look at your Grandma's jewelry if you don't believe me. New/used can be an important topic to buyers whether you call condition 'mint' or not. Second, selling is a talent and not everybody has it. Market access costs money. It's no coincidence that Blue Nile spends $10,000/day on advertising, that dealers across the country invest millions in inventory, or that Tiffany enjoys the brand recognition they do. Private sellers are operating at a significant disadvantage.

 

[oldminer]

If you purchase a diamond ring and put it away in a vault, it will not deteriorate in away way over the next 500 years. If, instead you put it on a finger and wear it for the next few weeks, there will be quite a build up of minor surface wear on the ring although far more months or years of wear might be required to do much of anything to the diamond. Even after decades of daily wear, some diamonds show next to no apparent wear although their mountings will show the years use. The mountings that began their life as heavy and thick will have become thinner and possibly more elegant while the ones that initially were thin and light, will become too thin and delicate to be worn without major refurbishment.

The value of a ring when bought at retail when new immediately alters once it has been sold to a consumer. By definition, such a ring is no longer "new". It is now pre-owned. Does this depreciate the value? It depends on who might now be the buyer and who might be the seller. If the current owner is very famous, the next buyer might be impressed enough to pay even more than what was previously paid. If the seller is no one special, then it is up to mutual agreement what the transaction price might be. Most likely, it will be less than original retail no matter how perfect the current condition the ring and diamond.

The question asked does not have one simple answer other than "It depends". Most pre-owned, lightly used used luxury items bring less than new retail when they get resold. However, there are exceptions, mostly based on fashion or provenance, which may greatly vary for no apparent reason over short or longer periods of time.

 

[Aurora43]

Thanks for the great answers. I was wondering this because my sister inlaw has a beautiful diamond ring that was owned by her great grandmother and she was told about ten years ago that it was worth $15,000. She is in a bit of a financial bind now and wondered if she could still get that amount out of it to pay off a couple of her credit card bills. I'll tell her it is best to have it appraised by a few different jewelers so she can know exactly what it is worth now.

 

[rubybeth]

Thanks for the great answers. I was wondering this because my sister inlaw has a beautiful diamond ring that was owned by her great grandmother and she was told about ten years ago that it was worth $15,000. She is in a bit of a financial bind now and wondered if she could still get that amount out of it to pay off a couple of her credit card bills. I'll tell her it is best to have it appraised by a few different jewelers so she can know exactly what it is worth now.

I would caution you to not recommend a jeweler to appraise it--have an appraiser do this, just one appraisal to confirm what it is (carat weight, specs like clarity, etc.). Click on the "Resources" tab above and select "Appraisers" to find one nearby.

Also, most items sold secondhand are not going to sell for appraised value, but rather will need to be compared to other similar items on the secondhand market. For example, a pair of shoes that you can buy new for $100, but you find your exact size on eBay, minimally worn--would you pay $100? Of course not, because they are slightly used, you'd want to pay less, maybe $60-80. Generally, people looking at secondhand items are looking for a deal, not to pay what they could pay at retail. You could also try consigning it with someone like Grace at Jewels by Grace or Erica at Love Affair Diamonds, or a local place that specializes in antiques, if it's truly an antique and not just old.