Are Firearms a Financially Sound Investment?
March 17, 2016
What value do firearms hold other than for self-defense or fictional, apocalyptic scenarios? There are many people who collect commemorative editions or customized match pistols—but pistols can be a decent financial choice even if you’re not a specialist in collecting valuable guns.
Typically when you buy a pistol, the gun store will charge more than the MSRP sale price. However, when you trade in a used pistol, they will give you less than half of its value. The percentage is also likely to go down as much as 25-33% should you try to pawn or sell the firearm.
If that’s the case, then how could purchasing a pistol be a good investment?
For someone who just purchases a pistol occasionally, it isn’t. You’re not likely to get a profitable return in selling or trading a pistol, even if you originally got it new or used at a great price. That’s because a gun store owner purchases his pistols direct from the manufacturer with a Federal Firearms License (FFL). You can also obtain an FFL in order to buy, sell, ship and receive firearms. Doing so will make your profit margins better if you do decide that firearms are a good financial investment.
Pistols are a less concrete investment than, say, gold or silver. That’s because gold and silver have market prices that fluctuate. The price of a gun, however, depends upon market base. If you were to purchase a Glock 19 for $650, you would be lucky to get $550 for it when you put it back on the market. With the release of a new generation with different features, the resale price will then become considerably lower. And if you go through a gun store, you can expect to receive half the price.
This is the way pistols can be a good investment:
- If the model has been discontinued or is commemorative.
- If it has features that are rarely seen on the market.
- If you’ve obtained your FFL.
- If it has custom parts that are in demand which make it more valuable.
There are different factors that can play a role, but if you’re going to invest in guns financially, it’s a good idea to do the research necessary in order to determine which weapons keep or grow their value.