Reevaluating the Value

Who told you that toy trains were an investment?  'Cause they were wrong.

BMT-Express posted:

Who told you that toy trains were an investment?  'Cause they were wrong.

 

 

Back in the 1980's they were. Then new manufacturers, led by MTH joining the fray and K-Line ramping up, increased the supply of new offerings tremendously and bye-bye value appreciation. 

Why should they hold their value?

Where I grew up, a used item generally sold for half of the new price, even if it was still unused. What would you pay for a used electric drill?

I feel like the prices are that way because it's prices that people want to pay vs. How much there forced to pay for a pre order or order from a dealer when the item arrives. 

It's basic economics, supply and demand at work. Supply of used trains is high and demand is low, thus lower prices. 

Also consider that if you bought a new car and never drove it, just kept it in your garage for 2 years and they tried to sell it, it wouldn't get anywhere near the price of a new car, even though it's virtually new. People just won't pay new prices for an old item unless it's rare. That's supply and demand.

In the "old" days, there was on one toy-train control system , AC Power, that hung around for decades.    Old stuff and new stuff all ran together.    Guys collected the older stuff cause it easily fit, and it brought back nostalgia.    Now, the mfg keep adding electronics and  upgrading and changing them every few years.    So older stuff that had whiz-bang electronics is like old cell-phones - obsolete.    Many people are buying the electronics and want the newest. 

As for warranty not being availabe - it is a very good argument.     these new electronic boards are very sensitive and easily burned out.     And even if the seller says "new and never used" buyer beware.    They seller may have bought it that way and not opened it, or may be exaggerating a little.

I think the collectors are not as prominent anymore either.    There were lots of people that just collected specific old toy trains and caused the value to stay up for "like new" or "new" but I think many of those people have moved on one way or another.   

Early on, someone told me that trains were not an investment and should not be thought of that way, despite what you tell your wife.      You should buy them because they are something you want to fit your era, what you model, or just because you like it.    Enjoy it, and when you want to move it, let it go.    You are not taking a bath, think of it as the cost of enjoying it for the years you had it.    

Country Joe presented a very good parallel without mentioning a dollar value.  Why worry about a toy train being worth $200 less than you paid when a new car can lose forty times that amount between the dealership and your driveway?  Do you question that with the same fervor?  John in Lansing, ILL

The value of toy trains is measured in fun, not dollars.

Pete

Also consider that if you bought a new car and never drove it, just kept it in your garage for 2 years and
they tried to sell it, it wouldn't get anywhere near the price of a new car, even though it's virtually new.
People just won't pay new prices for an old item unless it's rare. That's supply and demand.
Joe B.

You forgot to mention that 95% of new car buyers Don't have that cash to buy the car outright so loans are being taken and payments are being made. The buyer [loanee] are almost always "underwater".  What does the Original Poster PJB have to say about that?

No consumer item I've ever bought has "held" its value: all my furniture, carpets, appliances, computers, TVs, cars, AC units, and toy trains are today worth considerably less than I paid for them. But I have gotten years of good use out of most of my purchases, and I have gotten a lot of fun out of my trains, so I'm not worried about it. If you really want to "invest" in something, there are better bets, like stocks and real estate.

With new prices today sky high and  with growing price disparity between new & used,, wouldn't  it be nice if there was a shop close by where you could drop off older trains on consignment so others can see them on display and test them out?  There has to be tons of it out there waiting to move.   The cost would be a small percentage of the transaction and cheaper then Ebay.. Folks could  barter, trade or sell with others.. No different then the many resale shops all over the country that do well.   I'm sure if done right it would take off big time, maybe give a boost to the hobby as well....

joe

JC642 posted:

With new prices today sky high and  with growing price disparity between new & used,, wouldn't  it be nice if there was a shop close by where you could drop off older trains on consignment so others can see them on display and test them out?  There has to be tons of it out there waiting to move.   The cost would be a small percentage of the transaction and cheaper then Ebay.. Folks could  barter, trade or sell with others.. No different then the many resale shops all over the country that do well.   I'm sure if done right it would take off big time, maybe give a boost to the hobby as well....

joe

Some hobby and antique shops do take in merchandise on consignment. A big warning: if the shop goes belly-up, you may very well loose your goods.

Years back my brother had an item on loan to a local hobby  shop and we both had a bunch of stuff there on consignment. Lost it all when the shop closed

It's been awhile since I've had any dealings regarding consigned goods. I have a feeling that consignment percentages would be higher than EBay fees. To me the main advantages would be no shipping and all sales final. 

I'd rather set up at a local train show.

When I try to sell something I don't even think about the original price I paid. Use it, have fun and when you are tired of it then let someone else enjoy at a most favorable price. If I can get $.25 on the dollar then I'm happy.

Rod Miller

Why do toy trains not hold value? 

What you are talking about is price;  the price others are willing to pay which is set by supply and demand.  The value is different for each person and not necessarily related to price.  "One mans junk is another mans treasure".

Most items one buys lose price and value to most people with time.  Those who have to have the latest and newest will pay higher prices and see the price they will bring in the market depreciate.

Another saying that applies is " The second mouse gets the cheese".  These wants, status, bragging rights, keeping up with the Jones and having to have the best and latest will cause one to pay a higher price for the newest and latest.

These are some of the reasons I prefer antique furniture, pre-owned houses and cars, old 40s and 50s trains, vintage stereos and some older tools.   I also like the quality and features of them in most cases.  And with vintage trains, stereos and tools I can often repair them and parts are mostly still available (no chips or integrated circuits and usually no printed circuits, with donor or replacement parts obtainable).

Of course if you are able and willing to pay for something you really want be willing to pay up and then see, with time ,the price you can get for the item will by much lower.

Charlie

Just my opinion, but I NEVER consider " dollar value" when it comes to my hobbies, especially model trains.

Why do toy trains not hold value?

Five examples....

1.MTH RAILKING squashed the market, followed by a poor economy.

2. Prices on new overseas items tripled

3. Serious rail fans advanced to true "O"

4. Today, no one is interested in the old toy stuff.

5. Older guys are no longer with us. 

This is exactly why I only buy what I really want to keep over the years I've sold off a lot of the stuff that I bought when I 1st got in the hobby and was going crazy now if it's a brand new item that I have to have I preorder it otherwise I wait a year to and find one that's new job  for half or less.

Joe Gozzo

Country Joe posted:

It's basic economics, supply and demand at work. Supply of used trains is high and demand is low, thus lower prices. 

Also consider that if you bought a new car and never drove it, just kept it in your garage for 2 years and they tried to sell it, it wouldn't get anywhere near the price of a new car, even though it's virtually new. People just won't pay new prices for an old item unless it's rare. That's supply and demand.

Country Joe - I agree.  But that's not analogous.  To play the car versus toy train game, which is a silly comparison, here's a more analogous example: what if I bought a new car in say 2016 at $80, 000 and never drove it, and then tried to sell it in 2017 - would I expect it sell for $32,000 - $48,000?  Let me know where I can get that discount on a brand new Benz and I'll take two dozen.  But as I said, it's a silly comparison.  Unless you are talking about the rich guy collecting cars as a hobby, in every day life, a car is transportation with functional and purpose.  A toy train is, well, an unnecessary toy.  

CW Burfle - you're comparing a 1-2 year old brand new, still sealed toy train item to a used drill?  Don't really see anything at all similar or comparable between these two things, but, uh, ok...

BMT EXPRESS  - not sure if you're confusing this thread with some other, but if you read the title and OP to this thread, who ever mentioned anything about investment?  

I'm talking about the huge downward price/value adjustment the moment after a dealer sells the item. For instance, a brand new, never used Atlas O No.5 turnout being sold by a dealer at say $120 and then a day later that exact same item - still in the sealed shipping container - only able to net around $70 when the buyer posts it for sale.  Is this stuff really worth the dealer street prices?  If so, this phenomenon makes no sense.... 

Trainlover160 posted:

This is exactly why I only buy what I really want to keep over the years I've sold off a lot of the stuff that I bought when I 1st got in the hobby and was going crazy now if it's a brand new item that I have to have I preorder it otherwise I wait a year to and find one that's new job  for half or less.

Joe Gozzo

Hey Joe!  Thanks for chiming in.  Thought Trainlover 9914 and I were the only ones who hadn't drank the toy train cool-aid!  That's exactly what I'm now doing. 

'Stuff' is worth what someone is willing to pay for it. If people are buying 'stuff' at dealer prices it is worth it. If 'stuff' is not selling at dealer prices then it is not worth it. Those items will probably end up being sold in a close out sale at a lesser price to make room for newer 'stuff' that might sell at dealer prices.  I only buy what I want/like and can afford. I have never even thought about resale value of any of it.

PJB posted:

BMT EXPRESS  - not sure if you're confusing this thread with some other, but if you read the title and OP to this thread, who ever mentioned anything about investment?  

 

Why else would you be considering "holding value" if not as an investment?

Suum cuique

Pjb - the drill can be a 1 - 2 years old, new in the box model without a warrantee. What would you pay? Don't forget, the odds of needing that warrantee are lower for the drill.

BMT-Express posted:

PJB posted:

BMT EXPRESS  - not sure if you're confusing this thread with some other, but if you read the title and OP to this thread, who ever mentioned anything about investment?  

 

Why else would you be considering "holding value" if not as an investment?

Suum clique

I think you're confused - there is a big difference between investments and things that depreciate in value over time.  1-2 year old never used toy trains, by and large, fit in neither category.  The value is gigantically different the second after it walks out of the dealer's store.  

C W Burfle posted:

Pjb - the drill can be a 1 - 2 years old, new in the box model without a warrantee. What would you pay? Don't forget, the odds of needing that warrantee are lower for the drill.

I agree that electric tools with moving parts are a little risky with no warranty.  But I'm not talking about only locomotives.  So, what percentage of your entire collection of trackage, freight cars, buildings, passenger cars, etc. have you sent back for warranty claims?  I'm only one example, but in almost 6 years in this hobby and owning roughly 30 buildings, 60 freight cars, 80 passenger cars and about 900 feet of trackage, guess how many warranty claims I've made for all this stuff combined so far - not one.   0% warranty claims.  So how much would I pay for no warranty on any of these items?  Exactly the same amount I was willing to pay for that same item a day earlier from the dealer - or worst case, almost the same price.  Are you saying the lack of warranty on these things is the cause of the 40-60% price difference?  That seems absurd if you ask me.  

A good twist though, Last year, I got 2 Lionel UP Heritage SD70ACe diesels. Each I got for $400. On ebay, the same engines are around $800. Figure that out somewhere.  

Matt, that's my point.  I mean people are coming on here trying to ignore the obvious.  

OK, all of you folks that think this is no big deal - I'll tell you what - go out and buy Legacy locomotives and scale detailed passenger cars from your favorite dealer this weekend.  Don't open the shipping cartons and sell them to me 1 year from now for 50% of what you paid.  Cool?  

Any hobby from car collecting to trains to rc stuff and so on has large depreciation values since these items are sold to be used for either transportation in cars or entertainment in the hobbies so the dollar is spent to have the immediate reward. 

Cars, trains, or anything else being collected and sold will lose money and the market is fickle. Even collector cars lose money with only the rarest of the rare when demand is high going for top dollar. Real estate usually increases due to demand but consumables are different.

I understand how disturbing this can be in buying trains but if bought to enjoy and the buyer is happy with the money spent at that time then it should not be an issues. Anything can be found cheaper when you look but you may look forever and never have the fun.

PJB posted:

Matt, that's my point.  I mean people are coming on here trying to ignore the obvious.  

OK, all of you folks that think this is no big deal - I'll tell you what - go out and buy Legacy locomotives and scale detailed passenger cars from you favorite deal.  Don't open the shipping cartons and sell them to me 1 year from now for 50% of what you pid.  Cool?  

My point is that I would not buy anything that I would leave in the box for a year and then try to sell it a year later. I buy it. I open it. I play with it. If after a year I am not happy and sell it that is my choice. If I want a return on investment I will put my money into hedge funds, 401k, bonds, etc.

This is why the American schools quit teaching economics.  The supply and demand concepts are so hard to grasp.  Many businessmen and stock day traders struggle with these concepts as well.

 Just cause i have one doesn't make it valuable.  Stocks, bonds, and real estate are common investment items and all have some risk.  Most other commodities are not considered investments.

 I've lost money on every car and lawnmower I have ever owned

Texas Pete posted:

The value of toy trains is measured in fun, not dollars.

Pete

Best reply ever!

I got back into tinplate trains in the '80's. This was a boom period when people who were kids in the '40's and '50's who were rememberlng and trying recapture a childhood. I was trying to do that, too.  The internet, for a while, made that easier and cheaper. Than more people caught on. Old trains became more expensive, and appear to be more expensive on net now and are not depreciating, but the new production is.  I am surprised this is true with the attrition of collectors. If this was not true, why would it be so expensive to fill the gaps in my collection?  I have given that up.

All I can say, it's actually a Buyers market.  So many of the men and women that are active in the hobby today, grew up in the late 1940's, 1950's, 1960's, and followed there Dreams. The post war scale like engines, cars, the Lionel F3's, 726's, 736's, FM's, and of course the 1950 "773" Wow, although conventional operating was considered Fun, We are mostly hooked by some type of command system, therefore,older trains have lost the Wow, causing their value to drop. Even, the first run Command engines from all manufacturers seem out dated with the truly great realistic running Model trains coming on the market today...All manufacturers are working hard to earn our orders $$$. This is simply my thoughts why many of our train and related items lose value...

There are some products holding a desirable return on investment, The Die Cast ES44AC's offered by Lionel, VisionLine products, and rare like new pre-war products...Price depends on the Buyer, Its simply a great hobby. Let's run trains.

SIRT posted:

Why do toy trains not hold value?

Five examples....

1.MTH RAILKING squashed the market, followed by a poor economy.

2. Prices on new overseas items tripled

3. Serious rail fans advanced to true "O"

4. Today, no one is interested in the old toy stuff.

5. Older guys are no longer with us. 

 

How could RK SQUASH THE MARKET?

Look at the recent Seacrest auctions all 5 of them with 500+ items on each sale. I got 2, 3rd rail E7s for about $600. Really pleased. I can tell you that a great number of the  2500 or so items sold for more than the estimated value.

Dick 

PJB posted:

C W Burfle posted:

Pjb - the drill can be a 1 - 2 years old, new in the box model without a warrantee. What would you pay? Don't forget, the odds of needing that warrantee are lower for the drill.

I agree that electric tools with moving parts are a little risky with no warranty.  But I'm not talking about only locomotives.  So, what percentage of your entire collection of trackage, freight cars, buildings, passenger cars, etc. have you sent back for warranty claims?  I'm only one example, but in almost 6 years in this hobby and owning roughly 30 buildings, 60 freight cars, 80 passenger cars and about 900 feet of trackage, guess how many warranty claims I've made for all this stuff combined so far - not one.   0% warranty claims.  So how much would I pay for no warranty on any of these items?  Exactly the same amount I was willing to pay for that same item a day earlier from the dealer - or worst case, almost the same price.  Are you saying the lack of warranty on these things is the cause of the 40-60% price difference?  That seems absurd if you ask me.  

You clearly don't like what people are telling you. The secondary market is what it is. How do you explain it?

C W Burfle posted:

PJB posted:

C W Burfle posted:

Pjb - the drill can be a 1 - 2 years old, new in the box model without a warrantee. What would you pay? Don't forget, the odds of needing that warrantee are lower for the drill.

I agree that electric tools with moving parts are a little risky with no warranty.  But I'm not talking about only locomotives.  So, what percentage of your entire collection of trackage, freight cars, buildings, passenger cars, etc. have you sent back for warranty claims?  I'm only one example, but in almost 6 years in this hobby and owning roughly 30 buildings, 60 freight cars, 80 passenger cars and about 900 feet of trackage, guess how many warranty claims I've made for all this stuff combined so far - not one.   0% warranty claims.  So how much would I pay for no warranty on any of these items?  Exactly the same amount I was willing to pay for that same item a day earlier from the dealer - or worst case, almost the same price.  Are you saying the lack of warranty on these things is the cause of the 40-60% price difference?  That seems absurd if you ask me.  

You clearly don't like what people are telling you. The secondary market is what it is. How do you explain it?

I don't have to explain it.  My point is that it is shocking to learn that almost nothing in this hobby is worth what people pay for it and that I have become much more judicious in purchasing new releases.    

My secondary point is that the more people do what I do (and based on responses, it seems there are a lot), the larger effect is that the LHS isn't selling as much and the manufacturers aren't receiving as many orders and pre-orders.  None of this "dwindling" sounds like a step in the right direction for the future health of the hobby.  

PJB posted:

C W Burfle posted:

PJB posted:

C W Burfle posted:

Pjb - the drill can be a 1 - 2 years old, new in the box model without a warrantee. What would you pay? Don't forget, the odds of needing that warrantee are lower for the drill.

I agree that electric tools with moving parts are a little risky with no warranty.  But I'm not talking about only locomotives.  So, what percentage of your entire collection of trackage, freight cars, buildings, passenger cars, etc. have you sent back for warranty claims?  I'm only one example, but in almost 6 years in this hobby and owning roughly 30 buildings, 60 freight cars, 80 passenger cars and about 900 feet of trackage, guess how many warranty claims I've made for all this stuff combined so far - not one.   0% warranty claims.  So how much would I pay for no warranty on any of these items?  Exactly the same amount I was willing to pay for that same item a day earlier from the dealer - or worst case, almost the same price.  Are you saying the lack of warranty on these things is the cause of the 40-60% price difference?  That seems absurd if you ask me.  

You clearly don't like what people are telling you. The secondary market is what it is. How do you explain it?

I don't have to explain it.  My point is that it is shocking to learn that almost nothing in this hobby is worth what people pay for it and that I have become much more judicious in purchasing new releases.    

My secondary point is that the more people do what I do (and based on responses, it seems there are a lot), the larger effect is that the LHS isn't selling as much and the manufacturers aren't receiving as many orders and pre-orders.  None of this "dwindling" sounds like a step in the right direction for the future health of the hobby.  

 

"Shocking"??? Have you been living under a rock in your fortress of solitude?   (Rhetorical question).   Sheesh, we now have SEVENTY plus dollar price tags on a piece of traditional rolling stock.   Of course, it's not worth nearly what is paid for it, but if folks keep paying why lower the price?  (Another rhetorical question).

If you can afford it and wish to preorder, by all means go for it! You only live once.   If you can't, like me 99% of the time, enjoy the bargains on the secondary market.

-Greg

I don't buy trains to support any manufacturer/importer. And I don't buy trains with an expectation of resale. I buy what pleases me.

I think it is true that many people do buy trains with the expectation that the trains could always be sold to recoup most of what was spent, or even make a few dollars. 

For the most part those days are gone.

Are the manufacturers in trouble? .... probably. The market is shrinking, and they are competing with a tremendous secondary market.

I think Model Railroading is a good hobby that can teach or reinforce useful skills as well as provide a lot of enjoyment.

I'd like to see the manufactures do well.

But times change, the popularity of hobbies ebbs and flows.

I am always glad to help someone out if I can.

But I have no concern about the future of the hobby or the manufacturers. The formal manufacturers may shut down. There will still be plenty of folks interested in the hobby. There will still be small basement businesses making things.

Had a guy tell me that we had to recruit new blood so we'd have someone to buy our surplus trains. While I sell trains from time to time, my financial well being does not depend upon selling trains.

PJB posted:

I don't have to explain it.  My point is that it is shocking to learn that almost nothing in this hobby is worth what people pay for it and that I have become much more judicious in purchasing new releases.    

This hobby is so much more than monetary value.  Or should be.

If the model has value to you, then it's worth what you paid for it, regardless of resale value.

Take this little S Scale ditty for example:

DC, no sound, no smoke, no electronic razzmatazz except for diodes to reverse the headlights.  When all is said and done I probably have a little over $250.00 in it.  I'd probably get no more than a hundred bucks for it if I sold it.

Yet, it has more value to me than all the Big Boys from China. 

Why?

Because about 15 years ago: I took an undecorated locomotive, added detail parts, reworked it to better match the prototype, painted it, decaled it and most of all enjoy owning and running it.

Rusty