Guns: an investment or money pit?

[6.5x55swedish]

I had an interesting, and a bit testy conversation with a local gun shop operator yesterday where we had a differing of opinion on guns and their value.

A little background: I am in the market for an Ar-14 type rifle and being a consciousness consumer I will do several months of research before plopping down my hard earned for anything. As a rule I only purchase used guns... that way if I decide to to sell it I either make money on it or break even.

So I stopped at a gun shop yesterday to handle a few and get the shops opinion on the different options. The guy at the shop wasn't very helpful in pointing out the features of one brand over the other and basically told me to just buy what I think feels good and trade it off if I decided I wanted something different. This particular shop only had new Ar type guns, but had a lot of them so I expected that the owner would have been able to go into a little detail about the different feature, the good, the bad, etc... I was really disappointed in that regard.

At any rate the conversation came around to what I wanted and I said #1 it had to be used. At that point he wanted to know why and I responded that I don't take 40% hits on new cars or new guns... I let other people take the hit and buy all my guns as used. At that point he basically started shouting about having to pay the rent and the light bill..... You get the picture.

Then he made a comment that I have heard in the past many times and I don't subscribe too. That guns are an investment and do nothing but go up in value. That they are not new cars where you drive off of the lot and loose value. To which I responded that if I bought one off of him today and brought it back in a month after putting 100 rounds through it that he would not give me a fraction of what I paid for it, so yes... it was like buying a car.

His point is that if I bought it new today, and sold it in 20 years I would get more than I paid for it... That may be true, but that isn't an increase in value.

As an example I have a shotgun that my dad bought back in 1962 brand new. It is a Stevens double, and new it cost $60.00. If I sold it today I might be able to get $300.00 for it high end which is more than $60.00, But if you count for inflation since then the gun new would cost 440.06 in today's dollars so that is a loss in money... not a gain.

The shop owner ended up being so belligerent before I walked out that he lost any possibility of me going back in there and spending money....but that is beside the point.

 

[Ryanxia]

Depends on the gun. Some definitely go up in value (more than just inflation).
Take the Saiga 12 for example, a few years ago they were going for $200-$300 now they are going for $600+.

Another thing to consider is if/when they ban certain types of guns (assuming what's out there is grandfathered in and transferable) the price will shoot up down the road.

That being said, I almost always buy used as well to take a bit of the sting off.
I'm also lucky to have a dirt cheap, knowledgeable LGS to buy from.

Shooting all that ammo is the money pit IMO.

 

[oneounceload]

Gold is a better investment than any gun - it is more liquid if needing to be sold. Yes, prices go up, but when you factor in inflation, value of the dollar, etc., they typically just keep up - if that

 

[Bovice]

Lol you don't have to turn it into a debate, just ask if he has any used ARs. If not then leave. Everyone is entitled to an opinion and it's futile to argue.

 

[ny32182]

Just like cars, I'm sure a real collector, investing enough time and patience, can buy wisely enough to break even or make money on a true unique AR with real collector value (that isn't anything you are going to buy new or find at the rack at the gunstore).

On new production non-collector ARs today, the market fluctuates with the winds of political "panic", whatever the state is this week.

Basically, if you have to ask, I have to say you are probably not a real "collector" and are in fact looking at rack grade ARs. These are NOT investments as far as I'm concerned. They are a non-necessary, luxury item that might go up or down in value in the future. (Hint... if you buy during a panic, you will almost certainly be in the "down" category before long) Guessing whether it will or not is pure speculation. You can probably save a little money buying used if that is your goal. But the market is down right now, so maybe not as much as you think. Certainly not 40% overnight, unless the original buyer got reamed.

It is a hobby. In the end only you can decide what any given gun is worth to you.

 

[RetiredUSNChief]

My opinion is:

You're the customer and your wishes are paramount with regards to your purchasing criteria.

If you wish to buy used, then so be it. Discussing the associated pros and cons is a normal part of conversation and sales. However, as the customer, you have a budget and reasons which must be respected.

I see nothing wrong with your desire and reasoning. If the shop owner/salesman cannot respect that, to the point of rudeness, then I say take your business elsewhere.

Better luck elsewhere!

 

[chhodge69]

It's a rare dealer who will leave money on the table when selling a gun. Retail shops buy guns as investments but their customers buy them as consumers.

 

[Tcruse]

If you shoot your guns the ammo is a money pit. I see regularly used guns being sold for more than the same gun available new. Especially, gun shows and pawn shops. So, it all depends on what the buyer is willing to pay.

 

[jmorris]

The biggest negative about guns as an investment as all it takes is a stroke of a pen and the "investment" is gone. Think about what would happen to the price of machine guns if we were allowed for form 1 them again. Your $18,000 machine gun would be worth $1500.

 

[303tom]

(Investment) Not like my kids, them just hanging around don`t hurt anything & if I don`t feed em, they don`t die...............

 

[Halal Pork]

It can be a craps shoot. Depending on what you're looking for, I definitely think buying used can be a good route in hedging our bets. The one thing I am sure of regarding firearms as money pits is that people who buy up the latest and greatest and then sell them off in order to "upgrade" when something newer and shinier hits the shelves end up losing a lot of money over the years and end up with not a whole lot to show for it. To expound on your analogy, it makes me think of trading in your old car for a new car. The dealer can't really afford to give you the best price on a trade-in.

Some of my guns have gone up in value and others have gone down. I wouldn't look at it as a means of making money. I do appreciate if I needed to sell a firearm one day the value would never fall to zero, it will always be worth something. But that holds true if you've bought new or used.

 

[22-rimfire]

...That guns are an investment and do nothing but go up in value. That they are not new cars where you drive off of the lot and loose value. To which I responded that if I bought one off of him today and brought it back in a month after putting 100 rounds through it that he would not give me a fraction of what I paid for it, so yes... it was like buying a car.

Once you get into an advisarial discussion, it is best to smile and just walk out the door. That includes talking to a buddy as well when it comes to guns. It doesn't go over well with car salesmen either. You aren't going to win this argument at a retail gunshop unless there are other factors coming into play that you may or may not be aware of. It's business.

Like cars, when they become "used" there is an immediate drop in value initially. The dealer is re-stating what many here say all the time... that a gun will not loose value and is a good investment... bla bla bla. And the AR example is a good one... if you sold it back to a typical gunshop 1-month after you bought it, you would get about 50-60% of what you paid for it. But if you sold to your buddy who like you is looking for a "used" AR in good condition, you will likely get 80-90% of the retail price. The sales tax is just flushed down the toilet, so don't even take that into consideration unless you are thinking 5 or 10 years down the road.

It may not be reasonable to expect a 40% reduction in price on a clean used gun relative to a new unfired weapon at a retail gunshop. I'd say 10% reduction is probably closer to reality... 10% of $1000 = $100 which is not nothing.

Always remember that if you are selling, what you have is a piece of crap and they are doing you a favor even considering buying it from you.

Guns tend to follow inflation in terms of increases in value which is often only a paper increase. There are collector grade guns that do better, but again you run into the pitfalls of selling versus buying where you feel the gun is worth $2000 but a buyer will only pay $1600. But that is only 20% less than your asking price. I value my firearms at full maket value or my sense of it and deduct 30% right off the top to come to an approximation of street value.

My best advice is to buy guns because you like or want the gun, not because you think in x-years it will be worth more. Sometimes they are and sometimes they aren't.

Added: Guns cost, but the ammunition and accessories is the money pit. Like all hobbies, it costs to partake in them. If you like golf, it costs... but you can buy a new set of clubs and just stand them in the closet and wait for them to go up in value if you choose to.

 

[huntsman]

Do your research buy what you want and use it, worrying about resale is a defeatist attitude.

Guns aren’t like women, it easier to get along with a less than desirable model.

 

[Rembrandt]

I am in the market for an Ar-14 type rifle...........

AR-14's are pretty rare....

 

[hso]

Pit for most people, investment for a few.

 

[Queen_of_Thunder]

While I do have some guns that have increased in value from the day I purchased them it really doesnt matter. Barring a need for money my guns will pass to my childre and granchildren. Their entry cost will be zero and if they decide to sell them it will be all profit for them.

 

[theotherwaldo]

Folks keep pointing out that gold increases in value much faster than guns, and that has proven to be true for the last ten years or so.

They also point out that guns can be rendered valueless by the stroke of a pen,

So can gold.

Anyone remember a fellow called Franklin Delano Roosevelt?

(I'll keep on clinging - bitterly!)

 

[Mike OTDP]

hso is right. Investing in firearms requires a thorough knowledge of what you are buying, what it should cost, and the projected appreciation.

Except possibly for the very earliest production examples, ARs are a commodity, not an investment.

 

[Justin]

The shop owner is an idiot.

At best, most common guns will track along with inflation, and that's assuming you keep them pristine, in the box, and never fired. You might be able to turn a profit by unloading it during an election time panic, but so what? At that point your profit probably wouldn't exceed $200 or so. You're not going to retire on that, and you'd have to buy hundreds of guns before you made any real money off of such an "investment."

If you really want to get into buying guns as an investment, then you'll be buying the sorts of guns that don't come from your local gun shop, that's for sure.

Instead, if you decide to collect guns, you'll be buying firearms that come from places like Holland and Holland or Purdy.

One fellow I've met, who has guns as part of a retirement portfolio, was telling me about the 1900s-era double rifle he'd added to his collection. The value of the gun was a result of the fact that it's an antique, that it's rare, and that it has a historical record proving that it was owned by such-and-such Duke or Earl who used it on hunting expeditions in India.

I can believe that a gun like that is an investment. However, you're certainly not going to ever find that level of firearm at your local gun shop.

 

[22-rimfire]

Been reading a book "Survivors" by James Wesley Rawles. In the scenario he paints the value of firearms exceeded a car initially. Because there was little gas for cars. But one thing happened in his scenario... the new "power" declared that almost all firearms had to be turned in and the remaining legal ones had to be registered under penalty of a firing squad. It is a fairly good read overall as these kinds of books go.

Just thought I would add to the "stroke of the pen" statement.

 

[mgmorden]

Depends on the gun, but any gun still available new you still don't know.

What ends up going up in value are things that are desirable, rare, and typically out of production. Colt Pythons for example are likely to keep going up (at least to a point). Remington 870's - not so much. Still in production and anything but rare.

Guns however typically depreciate differently than cars. The vast majority of cars will continuously depreciate down to almost nothing. Guns tend to take an immediate hit for being used but then will maintain that value (even adjusting that value up for inflation) indefinitely.

With that in mind, while they're not good INVESTMENTS, they're relatively good hobby purchases. I've had computer equipment that I bought for $500 that 5 years later you couldn't sell for $15. If I ever decide to sell off a gun that I've enjoyed for a long time I'm going to take a loss but I'll still be able to get a decent fraction of my initial investment back.

 

[paintballdude902]

a bit of both. guns (unless major damage is sustained) will always be worth money. some may go up so may go down. just depends on the gun itself and the care/use/abuse

 

[22-rimfire]

Good post mgmorden. You are correct that "guns hold their value" even ones still in production. That is not to say that the value is your purchase price, but rather that the value will not be essentially zero like many consumer goods.

 

[Texan Scott]

hmmm....
Central heating and air conditioning: investment or money pit?
Pickup truck: investment or money pit?
Wives: investment or money pit? *ducks hurled frying pan*
...
..
.
Shoes: investment, or - never mind.

A lot of things we spend money on are not investments because they aren't meant to return money. Their value lies in having and enjoying them. That doesn't mean they're a "money pit", either... it means we consider the use we get from them worth what we pay for them... like food.

Firearms, a truck, shoes, FOOD... these are things I'm accustomed to having as part of my lavish workin-poor hillbilly lifestyle.

Better question: "Guns: investments or necessary things?"

ETA: Your LGS might be run by a jerk; he might also not understand that while his purppose in selling guns is to make money for himself, your purpose in buying from him isn't to further his financial goals. I'd have walked out, too... though i'd probably not argued with him- just left.

 

[Russ Jackson]

Over the years excellent examples of top quality old guns seem to always go up. The better the condition the better the increase. Make sure your getting the real thing or all you bought was a paperweight.