The Collector’s Crossroads: Should I take on debt to buy a watch?

Ricardo Sime

This is the first in a series of articles discussing some common questions many watch collectors are faced with as they each go through their own collecting journey. The goal is not to give you an answer to these questions. Instead, the goal is to make sure you’re asking yourself the right questions beforehand – questions that can help you identify and think about the potential pitfalls that exist on either side of the debate.

Whether you’ve just started collecting or have been at it for quite some time, you’re probably familiar with these services. Their hook? That instant gratification on a luxury purchase is not only possible, but just a few clicks away. And though their advertisements are located right below that price that scared you only a few seconds ago, many immediately forget that fear and march onwards into the waiting embrace of debt. And of course, that shiny new watch.

 

And it’s tempting isn’t it? Particularly if you have an opportunity to buy a watch that you suspect will appreciate significantly in value.

But before you take that leap, it’s important to ask yourself these three questions and to present yourself with honest, thought out, answers.

Why the rush?

Is there a reason why you need this watch, now? This is probably the first question anyone looking to take on debt for a watch should ask. In many instances, FOMO, the fear of missing out, is the main culprit behind such a purchase. Some may immediately place a negative connotation on such a fear, however, there can be sound reasoning behind it.

Imagine walking into a an authorized dealer and discovering that hot model you’ve been saving for is suddenly nestled behind the glass. Whether it be that shiny new Submariner or the Speedmaster 321 slowly coming out of the factory, when opportunity knocks on certain models, you may be better off taking on debt. It will definitely save you time and the extra money you would have spent if you were left with no choice but the secondary market. In other instances, you may be better off playing the waiting game while you continue to save your money. A large, unsold supply could mean heavy discounts that you would have missed out on.

In both cases, the market for the watch you want will play heavily into whether you should take on debt.

What’s the worse case scenario?

In any type of lending, you’re presented with a set of terms and a payment schedule for the money you have to pay back. Before agreeing to these things, it’s imperative that you run through some worse case scenarios. If something happens to the watch, will you be able to pay for the repair on top of whatever you’re paying for the watch itself? If you lose your job, could you still afford to make these payments? Are any protections provided from the lender in such a case? After the year we’ve had, such scenarios no longer require a stretch of the imagination.

Will it feel the same?

Talk to a seasoned watch collector and they will wax lyrical about the thrill of the chase. About how they finally got the watch they wanted after years of obsessing, waiting and saving. That thrill plays a large part in the process of purchasing a watch for many people. If you’re one of those people, think long and hard about how you’ll feel about a watch you ended up buying on credit. That instant gratification could lead to a short honeymoon period. Next thing you know, you’re selling a watch at a loss, while still having to pay it off. However, if you couldn’t care less about the chase and will enjoy the watch on your wrist regardless of how you got it, getting it on credit wouldn’t be an issue.

At the end of the day, your decision as to whether to incur debt for a watch purchase really boils down to what that specific purchase means to you. Take the appropriate time out to define that so, should you decide to use credit, you’ll be left with no regrets. And hopefully a shiny new watch.