Risks of Buying Luxury Watches

New from Authorized Dealers vs. Secondary Market

Purchasing a luxury watch like a Rolex involves balancing immediate ownership against potential savings and market risks. Here's a detailed analysis of the risks associated with each approach.

New from AD

Price Premium & Depreciation

Paying retail price plus potential bundling costs. New watches can depreciate immediately after purchase, especially non-hyped models.

Market Volatility

Subject to long-term depreciation risks if the model loses popularity. Rolex's increased production may suppress secondary prices.

Availability Issues

Hyped models often require long waiting lists or配货 (bundling) at ADs, delaying ownership and tying up funds.

Economic Sensitivity

Affected by tariffs (e.g., 39% U.S. tariff on Swiss watches) and material costs (gold rose 33% in 2024).

Secondary Market

Market Volatility

Highly volatile - some models dropped 50% from their peak. The Rolex market index fell 28.8% from its 2022 peak.

Authenticity Concerns

Risks include counterfeits, frankenwatches, or hidden damage. Verification remains challenging despite platforms like Chrono24.

Premium Pricing

Hyped models command high premiums despite recent market cooling. Potential for overpaying for models that could drop further.

Lack of Warranty

May not include manufacturer warranty, requiring third-party services for repairs. Potential hidden service costs.

Key Considerations by Purchase Type

Factor	New from AD	Secondary Market
Price	Retail + potential bundling costs; may depreciate	Often below retail for non-hyped models; premiums for hyped
Authenticity	Guaranteed genuine with warranty	Risk of counterfeits; requires verification
Availability	Long waits for popular models	Immediate access but at market-driven prices
Investment Potential	Long-term appreciation likely but not guaranteed	High volatility; short-term losses possible
Economic Sensitivity	Affected by tariffs and material costs	More responsive to market demand and sentiment

Conclusion & Recommendations

Both purchase paths carry risks: new watches face depreciation and waiting games, while secondary markets involve volatility and authenticity concerns. Align your choice with your priorities—ownership security vs. financial opportunism.

For Safe Ownership

Buy new if you prioritize authenticity, warranty, and condition over cost savings. Ideal for collectors who plan to hold long-term.

For Value Seekers

Use the secondary market for discontinued or undervalued models (e.g., vintage pieces), but always verify authenticity through trusted dealers.

Timing Matters

With the Rolex market index rebounding slightly in 2025, now may be a good time to buy secondary as prices stabilize. Avoid overpaying for hyped models.

Diversify Risks

Consider mixing new and secondary purchases—buy new for foundational pieces and secondary for rare or speculative models.

Information based on market data from 2024-2025. Always conduct your own research before making purchase decisions.

© 2025 Luxury Watch Market Analysis