When Firearms Don't Hold Their Value

    Everyone likes to think that firearms at least hold their value if not gain in value over time, but that isn't always true. Case in point is the most recent "HOT GAT or FUDD CRAP?" column at The Firearm Blog which looks at a "custom built" AR pattern pistol being offered for $999 starting price at Gun Broker. The description from the listing reads: "Spike's Tactical Custom AR9 Pistol 4" barrel keymod rail with handstop. The lower accepts Glock pattern magazines. Includes reflex sight and Magpul BUIS. Includes 4 x 32rd Glock pattern magazines. Condition is like-new; <100rds through it." 

    I would not be surprised if the seller was simply trying to recover the money that he had sunk into the weapon. It looks like a pretty clean build, although there is not a lot of detail about the parts used for the build. But there are various reasons why this firearm may not sell at the asked for price, or sit for a period of time before it does sell.

    First, and foremost, is that firearms are a bit like cars: as soon as you take them home from the store and unbox them, the value falls. Shooting them causes the value to fall farther. One source I located states:

In general, new factory-produced firearms depreciate about 15% when they are purchased. However, after that initial depreciation, the gun will hold its value for the next 15 years while only losing an additional 2% per year. Guns that are 15 years old don’t lose any value until year 50 when they start to appreciate about .5% per year.

Elsewhere, the same article states that new firearms will depreciate by 15 to 25% when purchased, but "[a]fter that, though, their value stays fairly consistent for at least the next 15 years." It adds:

Common guns do not hold value very well, because they are usually very easily available to the general public. Because there is a large supply and not a lot of demand, they do not tend to be as expensive to purchase and they just are not as valuable as other guns can be. If you maintain this type of gun well, it will still have that initial depreciation in value, but you should still be able to get 75-80% of the original value when selling it.

    Second is that it is a "custom built" weapon: i.e., probably a hobbyist build or put together by a small shop. It may be a fine weapon that shoots flawlessly. But it doesn't have the cachet that a name brand would carry and, in fact, has a negative connotation because so many home-builds or off-brand firearms are assembled incorrectly, use cheap parts, etc. In other words, there is a risk that the firearm will not function as intended and that risk will be reflected in its selling price. In addition, even if it had been customized with the best parts available, it won't have been customized the way that most buyers would want. I say all of this as someone that has built all of my ARs; but I did so knowing that I would never come close to recovering what I had spent in the parts if, for some reason, I tried to sell any of them.

    Third, there is nothing special about this weapon that would increase the price. If the manufacture of new ARs had been banned, there was high demand for AR pistols but no one made them, or someone famous (or notorious) had used this particular weapon, that would be one thing, but AR style pistols, and the parts to make them, are commonly available.

    Fourth, although it doesn't bother me because I would probably switch sights anyway, the included sights (and most specifically the red-dot sight) screams "cheap" and does nothing to increase the value of the firearm. In my opinion, the inclusion of such a cheap red dot actually lowers the value of the firearm because it emphasizes that the build was probably done as cheap as possible. The seller probably would have been better to sell it without the red-dot.

    Fifth, and similar to item 4, the handguards use the Key Mod system rather than MLOK. One can argue the advantages and disadvantages to both, but the reality is that MLOK won the battle for accessory mounts such that many consider Key Mod to be obsolete. I had thought at one time that Key Mod might hang on as the mounting system of choice for the high end (i.e., snooty) shooters, but that pretty much went out the window once SOCOM determined that MLOK was a stronger system.  

    Sixth, and finally, the weapon mounts a soon to be NFA regulated SB Tactical arm brace. That means that the buyer will have to replace the arm brace with something else (or simply remove and destroy it), keep it and register the weapon as an SBR, or keep it on the weapon and break the law. In short, it equates to a hassle for whomever buys the weapon.