Estimating value of train collection

For insurance purposes, I would look at sales history online from the various auction sites as that is a pretty good indication of what it might cost to replace an item.  It pays to look at actual sales and not just listing prices as they vary considerably.  In the items I collect I have found that prices overall haven't deviated a great deal when you average the sales over the last several years.  I find this method is more realistic than published price guides as it reflects the actual market at any given time.  When doing this kind of research, I look for the "high median value" often discarding the lowest prices and some of the highest ones as there are always aberrations on the auction sites. 

As we all know too well, this value is generally going to be higher than the value of the collection if we were going to sell it and even then, the sale value could be all over the place based on how we plan on selling the collection.  A topic for a separate thread no doubt.

If you are looking to sell... Whatever you paid for it, cut it in half.

I generally agree with the above, here is my take on things:

For insurance: MSRP prices*

For selling: 45-55% of MSRP assuming everything is in good, working condition*

*The exception is if you have something "rare"/desirable, then I would look up the going sold prices on that major auction website. Example: MTH Euro locos sell for well over MSRP.

Albert, you are asking two different questions. For insurance coverage purposes provide the value consistent with the policy coverage language. For example, our policy is full replacement value, including the train collection, (after a deductible.) So our insurance broker uses the full retail value plus sales tax for the collectibles.

For the net worth statement, no good can come from putting a high value on the trains, unless you want to penalize the heir that gets the trains. My trains are all in a trust, the value we used is about 10% of Greenberg book values. We treat them as household goods that go with the house to our son. The estate percentage distributions that go to other heirs are exclusive of the house and all collectibles. If something unfortunate happened legally that the estate had to be probated the last thing we want is the tax man using Greenberg book values.

I have a friend that flys RC planes with me. He sold out his train collection about 5 years ago for enough to buy a new $50,000 pickup truck. I think five years ago was a turning point. The pool of buyers is getting smaller every year. As an example, I just noticed pricing on re-issued 6464 box cars as an example. Five years ago a 3-car set was selling for about $150 on ebay. (I bought a couple.) Today the sets are $50-80. Of course there are still items that will bring a good price but I'm afraid the overall trend is on a downward line. The work involved to inventory, research, photograph and sell off a collection is more than most people (heirs) want to do. Anything more than a third of what you think it's worth is probably wishful thinking.

@GVDobler posted:

The pool of buyers is getting smaller every year.

You may be missing at least one thing fairly recent and very important to this thread: During the pandemic many, many people either joined the hobby for the first time, or came back to it after a long absence, mostly because they were suddenly homebound and had nothing to do.  This led to a large spike in prices, which has only recently mitigated but not by very much.

This is apparently not true for 6464 boxcars but it's certainly the case for engines and most passenger cars.

I needed to liquidate my collection, did so two years ago at this time, and made very good money on most everything I sold (no boxcars).

I wish a continued very warm welcome to all those new hobbyists and returnees.

Mike

@GG1 4877 posted:

For insurance purposes, I would look at sales history online from the various auction sites as that is a pretty good indication of what it might cost to replace an item.  It pays to look at actual sales and not just listing prices as they vary considerably.  In the items I collect I have found that prices overall haven't deviated a great deal when you average the sales over the last several years.  I find this method is more realistic than published price guides as it reflects the actual market at any given time.  When doing this kind of research, I look for the "high median value" often discarding the lowest prices and some of the highest ones as there are always aberrations on the auction sites.

As we all know too well, this value is generally going to be higher than the value of the collection if we were going to sell it and even then, the sale value could be all over the place based on how we plan on selling the collection.  A topic for a separate thread no doubt.

Agreed. I follow items for sale on eBay that match stuff I have and see what they ultimately sell for. Ultimately, your collection is only worth what someone is willing to pay for it.

@SantaFeJim posted:

If you are looking to sell... Whatever you paid for it, cut it in half.

Then cut it in half again, and then again.  If one needed to liquidate a collection, unless it includes a lot of rare and/or mint postwar items, one would do well to get 20% of what was originally paid.  I know of one buyer who calculates his offer for MTH engines as yellow box (Railking) = $20, purple box (Premier) = $30 to account for the risk of bad electronics.

To get 50% of the original price, you'll need to have some desirable items and probably sell them one-by-one.  The market for common stuff has cratered in the past 5 years or so.

@AmFlyer posted:

Albert, you are asking two different questions. For insurance coverage purposes provide the value consistent with the policy coverage language. For example, our policy is full replacement value, including the train collection, (after a deductible.) So our insurance broker uses the full retail value plus sales tax for the collectibles.

For the net worth statement, no good can come from putting a high value on the trains, unless you want to penalize the heir that gets the trains. My trains are all in a trust, the value we used is about 10% of Greenberg book values. We treat them as household goods that go with the house to our son. The estate percentage distributions that go to other heirs are exclusive of the house and all collectibles. If something unfortunate happened legally that the estate had to be probated the last thing we want is the tax man using Greenberg book values.

I agree.  Re insurance, be sure you know what your policy covers, and the items which have collectible value might be subject to a lower limit.  Check with your insurance company.  There is a lot of disagreement on this issue, which has led to spirited debates on the forum.  Some folks carry extra coverage or use the company that sells thru TCA, while others insist that trains will be covered as toys under contents coverage.  The time to find out is BEFORE you have a claim.

As for estate value, I agree with @AmFlyer's use of 10%, although I've found Greenberg values to be grossly overstated.  I'm curious why one would want to inflate the value of something that will be passed to their children.

I think the value of second hand Lionel and MTH scale engines with PS2-3 or TMCC/Legacy have gone up.  For two reasons the first is as the MSRP of new engines has increased significantly more people are will to take a chance on used engines, the second was the pandemic.  You can question my sanity but about 8 years ago at York I bought every nice condition scale engine with control logic that was $150 or less.  I did do some negotiations.  I went home with a nice collection of about 12 engines.  Last York I found no nice scale engines with control logic for $150 or less.  I did go home with a nice Erie triplex but that was multiples of $150.  However, I think that most freight cars will lose most of their value.

I had obtained quotes from several of the large internet based sites and auction houses on a list of items I was thinking of parting with and I averaged about 30% of what I paid for the item. A little less if they packed and picked up the items . Things to consider if not using an auction house is all long it would take a seller to recoup their investment some cases in could take years for them to sell some of the items. I am considering start taking stuff to both York meets and dispose of it that way so my kids will not have to deal with and my wife and can enjoy the benefits of the extra cash and enjoyment of the trips to York. Just my 2 cents worth!

@RJT posted:

I am considering start taking stuff to both York meets and dispose of it that way so my kids will not have to deal with and my wife and can enjoy the benefits of the extra cash and enjoyment of the trips to York.

This is probably the best way to dispose of a collection or just excess inventory for those that are able.  You definitely will get more than what you will get from a dealer or an auction (unless you have some real desirable rarities).  I've been selling at York for a while now, and what I sell there more than pays for my trip and some goodies to bring home, and I have a blast doing it.

Andy

@Mellow Hudson Mike posted:

You may be missing at least one thing fairly recent and very important to this thread: During the pandemic many, many people either joined the hobby for the first time, or came back to it after a long absence, mostly because they were suddenly homebound and had nothing to do.  This led to a large spike in prices, which has only recently mitigated but not by very much.

My local hobby shop in town, experienced a bigger version of this during the down turn starting in 2008.  He sold out of everything, model kits that had sat in the front windows the boxes were all sun faded finally sold, and he made the biggest model kit reorder in years.  His train inventory went down equally, and he actually sold his HO train display layout, and then built a giant O gauge display in his store.  He did not note that big a sales surge during covid, everybody was scared to go out, but he did have much better sales than normal.

@GVDobler posted:

The pool of buyers is getting smaller every year.

Jon, I've been hearing that since 1970.

In the case of 6464 box cars peoples tastes might change, going more scale. Also during the pandemic there was no new production coming out.  Used prices went up because of lack of supply. Today things have gone back to normal.

Steve

There are a few exceptions, mostly what were higher end, scale, limited production items to begin with: e.g. Vision Line engines that haven't been re-done, and GGD aluminum cars.  I'd include some of the bigger MTH PS3 engines like their UP coal and gas turbines and big Lionel Legacy steam too, as well as certain rare 3rd Rail engines e.g. the Jawn Henry.  These are all desirable, and at the very least, you can get your money out, and on some of these items, you might even make a little, depending on exactly what it is.

I have about 100,000 worth of trains and will be lucky to get 10,000 back.

I was priveleged to help disperse a large collect of one of the Fort Pitt Highrailer's long time participants.   Do an internet search for Model Train Auction house, Pittsburgh, PA.  They, the auction house,  provided a truck to Matt Irvin's home, where most of the trains were located.  We, (Fort Pitt Highrailers), loaded the truck, and then rented a second truck at a local U-Haul to deliver the trains to the Auction house, Pittsburgh, location.  Keep in mind;  an excellent inventory, before you start this project is important.  Been several years, I thought 12% of original purchase price was the money returned to Matt's family/estate.   IMO, Mike CT.   All expenses are/were deducted from the auction gross proceeds.

You really want to find out what something is worth? Try selling it. Ebay, Craigslist, Market Place are all full of pie in the sky sellers of many, many things. The true test is what a buyer is willing to pay. True for refrigerators, new cars, guitars, Coca Cola items....and train stuff.

I have always said, the best time to sell something is when someone wants to buy it. Sellers of things are often plentiful, especially in times like this. Buyers are often scarce. NYC above, his post is probably very realistic.  But, what do I know?

Greg   (Right after I posted, I saw the 12% post. About what I stated.)

@Oscale_Trains_Lover_ posted:

I generally agree with the above, here is my take on things:

For insurance: MSRP prices*

For selling: 45-55% of MSRP assuming everything is in good, working condition*

I tend to use the 50% of MSRP approach, too, when musing about such things.

However, the condition issues are somewhat generational, aren't they?  "Everything in good working condition" is more of a modern era, highly electronics-equipped issue, methinks.  The TCA approach, born of earlier product generations, tends to be more cosmetics-focused.  Yes?  No?  Then there are other subtleties, such as packaging...If the product was a special edition (club, organization, etc.) or a 'celebration' item in unique packaging, then the condition/availability of same (later added to TCA ratings) would affect resale value, would it not?

In truth, it really is what someone will pay for it on a given day, set of circumstances.

I'm constantly amazed by the 'power' of just two avid...rabid?...buyers desperate to prevail on a sale...by clock or gavel!!  While at another time the (seemingly) same item...different auction...goes to a single bidder.  NO competition. Crickets chirping at the close...for far less $$$.   

Maybe we should have our sales close on St. Patrick's Day, eh?  A little Irish luck might just be the ticket!

KD

@dkdkrd posted:

I tend to use the 50% of MSRP approach, too, when musing about such things.

However, the condition issues are somewhat generational, aren't they?  "Everything in good working condition" is more of a modern era, highly electronics-equipped issue, methinks.  The TCA approach, born of earlier product generations, tends to be more cosmetics-focused.  Yes?  No?  Then there are other subtleties, such as packaging...If the product was a special edition (club, organization, etc.) or a 'celebration' item in unique packaging, then the condition/availability of same (later added to TCA ratings) would affect resale value, would it not?

In truth, it really is what someone will pay for it on a given day, set of circumstances.

I'm constantly amazed by the 'power' of just two avid...rabid?...buyers desperate to prevail on a sale...by clock or gavel!!  While at another time the (seemingly) same item...different auction...goes to a single bidder.  NO competition. Crickets chirping at the close...for far less $$$.   

Maybe we should have our sales close on St. Patrick's Day, eh?  A little Irish luck might just be the ticket!

KD

KD,

Youthinks correct! 90% of my collection is post-1995 so I use the "modern" terms.

I agree with subtleties, hence my asterix Not having boxes tends to be a no-starter for me so I just ignore those listing nowadays.

Yes, at the end of the day it is what someone is willing to pay, we all can admit to overpaying for things we realllyyyyy wanted. I can name at least 5 without hesitation haha!

Bryce