Piano Depreciation Question

Posted by: frogdog

Piano Depreciation Question - 09/10/09 11:11 PM

There's something I don't understand. I've read different and conflicting information on the value of a piano after 10 years. 1) I read that the value after 10 years is roughly 60% of the new price. 2) I read that a piano can be resold at 10 years for just about the new price. So which is it?

If a piano has a life of 30-40 years--before major work is required, then wouldn't it make sense to buy a 10 year old piano for 60% of its new price and get, for example, a 40K piano for 24K that still has a 20 to 30 year life span? Or in my case buy a 25K piano for, say, 15K?

Thanks, Cynthia in Calgary
Posted by: pd1500

Re: Piano Depreciation Question - 09/11/09 12:13 AM

Originally Posted By: frogdog
There's something I don't understand. I've read different and conflicting information on the value of a piano after 10 years. 1) I read that the value after 10 years is roughly 60% of the new price. 2) I read that a piano can be resold at 10 years for just about the new price. So which is it?


The magic of generalized price inflation. If you bought a high end brand of piano ten years ago for $X, then it's quite possible that if you sell it privately today and are very patient you might get $X or very nearly that much for it. This is because a new copy of the same piano will cost $X+10 years worth of inflation, which is probably considerably more than $X. This doesn't make the piano an investment on the level of, say, high quality corporate bonds. But considering all the other junk you can buy and have it become immediately worthless the day you open the box, it's not half bad.

Quote:
If a piano has a life of 30-40 years--before major work is required, then wouldn't it make sense to buy a 10 year old piano for 60% of its new price and get, for example, a 40K piano for 24K that still has a 20 to 30 year life span? Or in my case buy a 25K piano for, say, 15K?


It certainly does, as long as you're mindful that your savings are because you're giving up 10 years of the piano's life. For many people it's a completely sensible tradeoff.
Posted by: frogdog

Re: Piano Depreciation Question - 09/11/09 12:19 AM

Thank you. When a piano needs major work at the end of its 30-40 year life, what does it generally need, and what would it cost? I understand it may be different for each piano, but give me an idea in general terms. If you pay X for a new piano, a piano of quality 7 out of 10, and assuming the sound board is fine and the exterior is fine, and the piano was only played for a couple of hours after church on Sunday, what will it cost to get it back to 7 out of 10? thank you
Posted by: Norbert

Re: Piano Depreciation Question - 09/11/09 01:34 AM

In my mind there's different factors at play here.

The basic fact is that a piano costing 15k will have a different depreciation rate than a piano costing 60k this, from the very beginning - it's mere mathematics.

Depreciation from original price logically follows a different incremental scale, again this is basically mathematics [a bit as stock market works...]

Now it becomes more 'interesting' when the 15 k pianos is actually bought for 25% less ["undervalued" merchandise] and the 60k piano for also 25% less [ incrementally "more" undervalued merchandise] - the ideal situation for savy investors. [stocks anybody?]

Problem is that for many the industry has 'floating' prices and nobody seemes to ever fully understand how much a particular piano is supposed to cost in the first place.

Including all too often dealers themselves........ frown
[hey, we strictly go by 'looks'!!] help whome

Next consider the availability [or *not] of identical pianos on the market available *used*, being often the greatest competitor to their new counterparts.

In this regard the massproducers of this world in particualar will have to increasingly keep jumping over their own shadow - something we have been getting the taste of things by now for some time.....

Let's also not forget that some makers have by now damn near exhausted their realistic potential for future price appreciation [it didn't seem to work for Schimmel...] while certain others, especially the strong *climbers* may *not* - or at least not to the same extent.

IMHO only those with upward mobility will stand a greater chance to hold their price over time showing again a different [lesser] rate of depreciation than certain others.

Perfomance and success in the marke will IMHO depend on continually improved quality resulting by continually postive market reports and with it,increased market penetration and recognition of such product.

Last not least - consistent and steady recognition and upgrading by King Larry Fine in his bi-annual reports.

Anybody thinking the man has no power/influence on the market?

Think again....

Now the only question in my mind left is this:

What was first: the "chicken" or the "egg"??

Norbert wink





Posted by: Zooplibob

Re: Piano Depreciation Question - 09/11/09 02:22 AM

The problem is supply. Its like with cars. A 1 year old car can depreciate by almost 20%, so you'd have to be crazy to buy a new car thats just 1 year newer for that much more right? But the fact is nobody buys a car and sells it 1 year later unless theres something wrong with it.

So theoretically the price of a 10 year old piano will be a much better deal, but the supply of good ones is small.
Posted by: Steve Jackson

Re: Piano Depreciation Question - 09/11/09 11:12 AM


Hi:

You raise a good question.
Piano depreciation has, in my experience, been greatest in the last 10 years or so. Pianos bought 10 years ago for 5 - 6,000 are not selling at $1500 today. The exception for this level of depreciation would be Yamaha, Steinway and a few others. Just this week someone called with a 1999 Baldwin console they bought new for $7200. They will be lucky to get $1800 for it and maybe only $1200 or so. The reasons that I see is the decrease in piano prices at the low end. A new entry level piano today costs a dealer less than one 20 years ago (as someone with a 20 year old Young Chang found out yesterday.) There is also the internet factor. It's so easy and free to advertise a used piano these days. Before, you had to put an expensive ad in the paper and answer the phone to many people. Now, a free ad on Craigslist with pictures and e-mail makes it easy. The only way a piano can hold value is if new pianos increase a lot and the supply of used pianos decreases. This is certainly not happening now, but in 10 years, who's to know what will be?

Steve
Posted by: Marty Flinn

Re: Piano Depreciation Question - 09/12/09 06:42 PM

Our research demonstrated that new piano values take a dip in value, below the purchase price, for the first five or six years. By year six or seven the value of it used should come back to about what you paid for it. In years 10-20 it should sell for a little more than you paid for it.

Here are the caveats:
1. You paid a fair price originally.
2. You bought a recognized name brand and popular model.
3. You are selling to a private party and not to a dealer.
4. Your piano has been well maintained with no damage.
5. The economy does not have a complete meltdown.