What is the Depreciation Rate for Used Locos?

I don't believe you can apply a rule of thumb her. Too many variables.

Seems when we are buying, we want the lowest or offer the lowest price. But when it comes time to sell, we are shocked by the offers made.

There are some, on E-Bay and one on here, I'm surprised ever sells anything by the asking prices.

'Of course the value of a used locomotive is what someone will pay for it'  would seem to answer your question.  As josef says, we want to buy low and sell high.  Passenger is correct - too many variables - low production and high demand could make the engine worth more years later; a starter set engine would be worth twenty bucks the day after you buy the set.  With all the electronic progress year to year, you might be lucky to get 20-30 percent of what you paid for an engine only a year old.

Here's my rule of thumb....."Buy high....Sell low"....this rule never fails, and has served me well for many years!        

The older something gets, the more difficult it is to measure depreciation, especially on consumer items. Add to that the variables mentioned by PTC such as road name, production run, shipping costs and so on that affect collectibility and it becomes very difficult to nail down a concrete rate of depreciation. Value is a concept, not a fact, and depreciation is only one variable in estimating value. Sales of similar items are the best indicators of value using markets that involve large numbers of sales. IMHO rather than focusing on just cost minus depreciation as an indicator of value, survey the market and read user reviews to identify what you should probably pay for a used item. 

I've sold off over 40 MTH premier steam and diesel logos in the last 3 years.   Many were nib,  and the ones that were not had very little run time.   I would say the average I could get would be 70% of more.

When I buy used,  unless it is a hard to find piece,  I would not pay more than 80% of more.

Just my results.   Yours may vary.

You'll have a very hard time getting me to pay more than 60% of the new price for a used locomotive. 

hokie71,

I can honestly say that I have never heard of a,"Depreciation Schedule". We're not dealing with used cars here. It would seem that you're expecting something like,"The Kelly Blue Book". The percentages you have in mind are just that, in your mind. Best of luck working with your numbers. 

Were it only that simple.  Just look at Lionel GEVO Hybrids and any of the die-cast ES44's...  and any kind of formula will go right out the window.  

 

David

+1. I think the two main variables are how many times has it been made and how old is the technology. 

 

Pete

For anyone looking to sell, I think this is very good expectation level.  Going in with higher hopes and you're being unrealistic -- unless you happen to be selling one of the small handful of locomotives in high demand, like the ones I mentioned above.

 

David

Well judging by the $1900 price tag I saw on a MTH PS-1 Challenger at the local train show this weekend they don't depreciate, only appreciate the older and more out of date they get

How about a generalization by grade and age(year)?

 G-Y(x10)=%

so for a 2yr old C-8

 8-2=6 / 6x10=60%

1yr old c-9

9-1 = 8x10= 80%

6-5 = 1x10= 10%

Yep I'd take a 5 year old C-6 Big Boy for under $200, so I like this formula.

 

 

Right on the money.  As a general rule the depreciation rate on the trains is about 50- 95%.   If it keeps going like this , why before you know it, you are going to have to pay people to take em away!

I'd have to agree.

 

I'm never selling any of mine, so I've never worried about it.

I look to see if the engine has been re-released. I won't buy an older model for more 50% when a newer version is available.  And if the older model and has been used and  re-released then i won't pay more than 40%.  Since i am an operator and not a collector this make sense to me.

I had a buddy that was in tree removal business. He said not a day goes by that someone would ask hin 'How nuch to cut down a tree??'.

The question had no answer.

A small tree in the middle of a field would be a lot less than a huge Elm growing between to large homes!!!!

Passenger Train is 100% correct....too many variables.

Besides.....some locomotives have gone up!! No formula for this one.....

Dennis,

         I will be more than happy to be paid to take anyone's old trains away.

Probably the reciprocal of the acceleration of a Funny Car on the 1/4 mile.

Find me a s3 or a visionline black hudson for the street prices they sold for new and i will buy as many as you have...Lets not even start with the diecast es44s or even the mth hybrid it went for alsmot a k on ebay last week..

From the few Railking PS-2 Steam engines I sold I would say that I received 33 - 50% of LIST PRICE after 2 - years.

It will be interesting to see what the new VL Big Boy will be selling for next year after the dealers are completely sold out.  I don't think that Lionel will be making new ones for several years.

 

The K-Line aluminum passenger cars have certainly held and even increased their value on the used market.  Although they are not engines it does indicate that certain items can appreciate.

 

 

Joe

I just found a Sunset/3rd Rail CP Selkirk.

I was not concerned with the price. Not like I can get a new one.

I have bought it.

It's not likely "worth" near as much to the vast majority on this board as it is to me!

 

Bizarrely, one was sold on ebay early in the year. From Texas. He would not ship to Canada. Dumbest decision I've ever seen on ebay! A hard-to-get Canadian branded loco! Not ship to Canada?? He paid the price for his obstinacy. He got a pittance compared to what I just paid for this Selkirk!

 

Only "the market" can set a price on items not readily available new. There can be no meaningful "rule of thumb."

 

 

 

 

Whats scary about the Visionline bigboy is i have seen some sell for 2600 on ebay aready..

He said "most" of the time...I think that covers the exceptions.

What we have here is a failure to communicate.

 

 

I thought I was listing some of prominent variables, not the exceptions. Some of other variables would be condition, road name, toy or scale, etc.

 

Pete

 

Pete

Although the 'whatever someone will pay' is what something will actually sell for, I think your formula sounds good from a buyer's view. GRJ's no more than 60% is a good point too, and possibly where I would start out. Of course how bad one wants something figures in as well. Also, I am not a collector, just have trains for enjoyment. I am sure most sellers will probably disagree here.

 

I have not had real good luck with very many used train purchases, so I am inclined to not offer a whole lot for something used. If I get it, it will be at my price comfort level, if not someone else gets it. I only want the modern electronic engines and, as you all know, they can be quite expensive to repair. Needless to say, I won't be buying any of the die cast ES44's at the current going prices.

 

I believe in the theory that all the shorts and spikes to the electronics are cumulative over time and shortens their life. Something with modern electronics that was running on an old postwar transformer without proper circuit protection will probably fail more quickly than something that was run with all the proper circuit protection in place. You really have no idea what they have been through or what was powering them prior to your purchasing them.

 

I am not entirely convinced that buying something broken for a very low price (with the plan to replace almost everything) wouldn't be better than buying an item advertised as working and paying a lot more for it?

 

And it was used -- not even new.    Pure insanity.

 

David

We never said there would be a shortage of nominees for the Darwin award.   

 

David

That has no one answer either........

I bought a MTH Premier GP-30 at a train show. Owner said everything was fried. I took a chance...a gutted dummy for $50 was OK with me. I got it home and the boards were fried.  Motors ran fine. Installed a Williams DCRU I had on hand....ran fine. I run conventional and not a big sound fan....so for ME...it was a deal. For a DCS runner that NEEDS sound to enjoy it...no. A case by case decision......

I recently offered a seller $500 for a $600 tinplate engine that they were asking $550, and was turned down.   That's 83% of msrp.  MTH hasn't made this engine in a while,  but I'm assuming they might in the next catalog or 2.  Assuming they are raising the msrp to $700, with Street prices close to $600, I'd rather wait and get the new engine with ps/3 any way.

Try getting someone to part with their K-Line TMCC Metra engine, or MTH PS/2 Metra engines for 50% off, see how that far will get you. Or Metra bi-level cars (but they are not engines).

 

Yes, supply and demand. But yeah, I can't see how I am going to spend MSRP on an engine that is commonly available yet has no warranty. Warranty does NOT transfer, unlike the accepted practice of transferring warranty for automobiles in the USA.

 

I have seen somewhere on this forum that warranty transfers for Lionel Vision line engines, but unless I see it on the lionel.com website, I will not believe it.

 

I think the technology also matters for operators. Postwar to 1969, Conventional MPC, Conventional LTI, TMCC with Pullmor, TMCC with can motors, Legacy. PS1, PS2, PS3. Also how many center rollers. I pay more for four rollers over two.

NONE!

If you wait long enough to purchase one in the right road name you will always end up spending more...

 

 

I never expect to make a profit on anything I sell anywhere.  I would never sell a used locomotive for the price of a new one especially one with old technology.  I have seen it just about everywhere a PS 1 locomotive selling for $ 250.00 diesel and steam. That is ridiculous considering they listed for about 299.00 or less 20 years ago.  I re-invest all my train sales back into my hobby.  I will never sale for a profit as I am not a collector I just like to run trains.  This forum is great as I haven't been disappointed on any of my purchases from other members ever.  I think it is safe to say that everyone has their own guidelines when it comes to buying and selling.

That's where lots of sellers lose site of the forrest for the trees.  And they're probably the same guys who lug the same ole stuff from train show to train show instead of selling their goods.

 

Nobody is gonna pay premium $$$ for older technology.  Collecting for the sake of having older toy trains is dead.  When I joined the ranks of Standard Gauge enthusiasts, i was shocked that the older traditionalists still expect us newbies to pay top dollar for "original" pieces in less than great condition.  

 

Let's see... Do I pay big bucks for an older/original tinplate set that needs lots of restoration work?  Or do I buy the PS/3 version that's brand new, pristine, and even has smoke/sounds?  It's a no-brainer.  

 

Sellers who ignore the technology treadmill don't live in the real world.  I'm all for MTH re-issuing items that were first manufactured years ago -- with some new features today.  I'm in this hobby to enjoy the trains that interest me at the moment -- not to make previous owners rich.  I have no interest in paying top $$$ for "original" items of years past.  I didn't do it for Lionel postwar O-Gauge, and I have no plans to do it for Lionel prewar Standard Gauge.  

 

David

If Lionel did cancel aluminum passenger cars some may find a second life with sem-scale Lionchief steamsthat arrive with cheap RS. It won't take long before many of those older painted 15" aluminum sets find a home behind one and appreciate in value. 

Joe

What is the Depreciation Rate ...?

 

1. Depends on whether the DJIA is in a bull or bear market (!)

which influences:

2. Media coverage of whether the "good times" are back or not.

which influences:

3. Overall consumer confidence levels as reported in the financial media.

which influences:

4. The glamor, glitz, of advertising in the media in general.

which influences:

5. Multi type feeding frenzy at every level of banking, commerce & now "social media."

which influences:

5. How much/type product is thrown onto the market by corporate, retail & "once was consumer hands."

all of which:

6. Defines wholesale/consumer product pricing (including food, fuel, housing & discretionaries, including toy trains: used or NIB).

 

Been that way since the end of WWll, was that way @York, who cares now about EBay. Knowledgeable buyers & sellers who have been through a market cycle or two know how to adjust their offer/bids accordingly, or not at all.

I recently bought a really nice late '40's or early '50's Marx Commodore Vanderbilt. It has a few small scratches, but still in good shape and runs like a champ, but old technology. I paid $25 for it. Considering that I could have bought the whole set back in the '40's or '50's for probably less than half that price, did I get robbed?  LOL

 

 

Hmmm.... methinks the word "depreciation" suggests the idea of an initial "investment", which suggests some kind of "self-discipline" which of course, as train nuts, we cannot guarantee in the slightest.