Quote:
Originally Posted by Dan2010
I'm a finance guy so I wanted to do a little cost of ownership analysis on the new Sub C since there are a great many people who think it's too much for a SS watch. This analysis can apply to any Rolex for that matter.
I will use my own recent purchase of the Sub C as an example. I paid $7,600 after sales tax. Now a Rolex will last what, 50, 75, 100 years? Lets say it will last for 75 years. Exclude the regular watch maintenance cost every 5-7 years as all Rolex's will require this.
If I take the cost of $7,600 and divide it by 75 years you get $101. This is my annual cost of owning this watch. Now will I personally get to enjoy this watch for the next 75 years? Odds are probably not but between myself and giving it to one of my kids someday, we will get 75 years of use out of it. When you break it down, $101 a year aint bad to own this or any other Rolex that has such longevity. But wait, it gets better. In 75 years, if one of my kids wants to sell this "vintage Sub C", I can almost guarantee you they will get more than $7,600 that dear old dad paid way back when. So guess what, the only real cost has been the cost of the maintenance and that is assuming that one of the kids sells it only for $7,600. If they sell it for more someday, the premium may even cover that cost too. In the end, we quite possibly owned this great watch for FREE. And for all you other finance geeks, yes I am ignoring the time value of money in this analysis.
Now is it a great INVESTMENT? I never said that. I just analyzed the cost of ownership. Could I have used that $7,600 and turned it into more money. Well duh. But I wouldn't have enjoyed it as much as owning something as fine as this Rolex. Could I of waited and gotten a better deal? Well duh again but remember this analysis can be applied to that $10,000 Daytona too. For me, I was willing to pay the premium.
The whole point of this is, if you plan on keeping the Sub C or any other watch for the long term, you may find the cost is not so bad after all.
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You cost-benefit analysis is about 50% right and 50% wrong. I'm glad that you understand that there are better investments, especially with a 75 year time horizion. I would, as others have already, point to the cost of upkeep- with recommended service intervals 5-7 years. Assuming the current cost of $750 and being very generous in assuming that number does not increase and you service every 6 years, you're looking at $12,500.00 Making the total cost of owning the watch, $20,100.00- a rather staggering figure but this model reflects the cost of ownership on the majority of cars and definitely boats.
Most people don't keep their watches for 75 years. This is where I have an issue with your findings. My first question and really only one, would be: How old was this person when they acquired this watch?
I think you've taken a very extreme example and used it as a basis to arrive at a conclusion that applies to .5% of Rolex owners. You rightfully acknowledge that a "premium" exist- I believe the annual cost of owning the model, Sub C is more than 2.5x your amount. For the watch to have paid for itself after the dust has settled, you'd have to have beaten 1-2% inflation over a 75 year period... and be alive at 100 years old or something like that to realize you cost-benefit conclusion.
I'm sorry but I think this is misleading and grossly inaccurate.