Think that AR-15 is a good investment? Not so fast.
I’m doing some digging for my planned firearms FAQ.
One of the reports I found was a 1999 report (which you can read HERE) from the U.S. Justice Department that included a study of the impacts, from 1994 through 1996, of the 1994-2004 federal Assault Weapons Ban.
I haven’t gotten to part covering the the impact (or not) on crime, but I was very interested in what the report had to say about the firearms market. Check this out:
“Market effects
Primary market prices of the banned guns and magazines rose by upwards of 50 percent during 1993 and 1994, while the ban was being debated in Congress. Gun distributors, dealers, and collectors speculated that the banned weapons would become expensive collectors’ items. However, prices fell sharply after the ban was implemented. Exhibit 4 shows price trends for a number of firearms. Prices for
banned AR–15 rifles, exact copies, and legal substitutes at least doubled in the year preceding the ban, fell to near 1992 levels once the ban took effect, and remained at those levels at least through mid-1996. …
These trends suggest that the preban price and production increases reflected speculation that grandfathered weapons and magazines in the banned categories would become profitable collectors’ items after the ban took effect. Instead, assault weapons prices fell sharply within months after the ban was in place, apparently under the combined weight of preban overproduction of grandfathered guns and the
introduction of new legal substitute guns at that time.”
I’m not saying that this will happen again. But, history tends to be a pretty good teacher. And, remember this, the investments didn’t pay off even after the ban took effect. What might the impact be if efforts to implement a new federal ban fail altogether? (Which even most supporters of Sen. Feinstein’s bill are predicting.)
So what I am saying is that, if you’ve got your name on a waiting list for an AR, I wouldn’t be sweating it too much.
January 29, 2013 - 5:40 PM
Before Newtown I bought a NIB Stag Model 2 for $699 on Gunbroker. Yesterday I was offered $1500 for it, and $1200 for my 15 year old Hess AR that I bought for $450 new. No sale (too much fun to shoot!) but we have all seen the up and down on the semi-auto rifle market. Smith and Wesson Model 15 ARs are still wholesaling for $800, I would assume that wholesale prices on the others have not moved much. Availability is driving up the price, with anticipation that this style will not survive upcoming legislation. More disturbing is that .223 ammo has gone from $7/box to $16 and up; the gun prices may fluctuate but you can count on ammo prices staying up.
Walt — Take the money! Take it! That’s a 100 percent (plus) profit on the Stag. You can buy a new one in six months for $700! (Probably.)
IF Feinstein’s bill passes, it would prohibit the transfer of “assault weapons” and high-capacity magazines. So anything you bought as an investment had better be sold before the law were to go into effect, because afterwards it would be illegal to sell.
(at least that’s my reading of the law, correct me if I’m wrong)
I have a pre-PRE-pre ban Norinco NMH91…. (Before the ban talk of today, pre 94 AW ban, and pre-89 import ban) RPK type rifle (the long barrel AK type rifle) It was purchased new for about $150….During the 94 ban, I was offered $750 for it, and last week I was offered almost $1,500 for it… I will be selling it as soon as I am certain their is nearly zero chance of a ban. I am about 80% certain their will not be a ban now. The key is to buy one when their is no inkling of a ban, and to sell when people are fighting for them.
Kind of ironic that the liberal’s insistence on these bands has done more to sell massive amounts of these weapons and increased the bottom lines of the manufacturers than the NRA could have ever dreamed of doing for them. Pardon the pun, but they seem to be shooting themselves in the foot……multiple times.
Mark, I hope you are correct that history will repeat itself and prices will return to somewhat normal in six months to a year , but I’m not so sure. And it doesn’t concern me so much because I’m necessarily in the market for one, but more concerned with what effects all of this is having on the availability and price of ammo. I live within earshot of Roanoke Rifle and Revolver club in Hardy, and since the Sandy Hook tradegy and the following rush on ammo it has grown very quiet over there. I know the weather has been harsh and probably has kept some shooting enthusiasts off the range, but I can’t help but wonder if most folks are concerned that they won’t be able to replace anything they shoot up on an afternoon at the range. And with the push in Washington to reinstate the AWB and give it new bite, I wonder how long before legislation turns toward restrictions on what type of ammo you can buy, how much you’ll be able to purchase, what new taxes will be levied on it and the like. Whether the proposed legislation passes into law or not, I predict this will be the next course of action for the anti-gun sect. The whole situation could get a lot worse before it gets better for the pro gunners, and if (Heaven forbid) the US has another mass shooting….where will it take this situation?
Mark,
This is the law of supply and demand at work. The market will get so saturated that the values will sharply decline and prices will come down. Any collector will tell you that if there was alot of something made, down the road the value is just not there because there are a whole lot of them to be found.
You hit it dead center Jim, we saw this with the increase number of AR manufacturers since Obama’s election, the market became saturated with ARs and prices stabilized. Mark, I’m not selling the rifles, not that I don’t need the money. I like them, like the way they look and the way they shoot. As an investment, there is nothing better than quality-made firearms. I can’t think of anything else that has held value like guns have, or at the present time, anything more in demand. I don’t see the demand shrinking over the long haul.
I told my FIL he should consider selling his while the price is up, since he’s nearing retirement and doesn’t get out to shoot much lately…and has had plans to sell several anyway. I figure the short-term market conditions are ripe for making some good profits on certain firearms…so he might as well strike while the iron is hot…because longer-term, I see the price collapses coming, like they always do. The bubble will burst.
Sunset clause last time. This time they want to make it permanent. I think that factor may change historical drops in value.
If I put a pistol grip on my 32 winchester does that become an Assult Rifle? The Lever Action will be replaced with a Pistol Grip Action
The American sportsman and/or gun club enthusiast will buy ammunition at any cost just like the American motorist will buy gasoline at any cost. Both will reduce the amount of usage, but continue to buy what they feel is necessary. Just as I do. The cost will not deter people who want the product.
if that ar ends up saving your or a member of your family’s lives….I would say it was the BEST investment you ever made
We know AR 15 and AK 47 look-alike type Sporting Weapons are semi-automatic weapons meaning you must pull the trigger every time you want it to go bang. We know the true Assault Rifle Versions owned by the Military are fully automatic…hold the trigger down….it shoots till it’s empty. As far as power, hunting weapons (and old WW2 pieces) are far more powerful and one can extend typical killing range out to 900 yards as opposed to the 300 yards of the assault weapon lookalikes. Regarding magazine capacity… If one had 4 magazines that held 5 rounds each….one can change the magazines in about 1 second…. So 20 round magazines verses 4each, 5 round magazines is not a lot of difference. Also everyone and probably all enthusiasts, know that what one sees in the movies of someone shooting fully auto sweeping from side to side rarely kills everyone…. That’s why they call it “spray and pray”. Simply put, it has been proven that 20 aimed shots will probably kill 20 out of 20….depending on the target density….spray and pray might kill 20% of the targets. Our dear anti-gun sheep, need to educate themselves before they go on and on to prove how much of an uninformed critic that they really are.
The reason for the price drop is simple. Before the bill was passed people likely thought that these Personal Defense Rifles were going to be banned outright. It turned out that in order for the manufacturers to sell new AR-15s and AKM pattern rifles was to remove the bayonet lug, remove the flash-hider or replace it with a comp or break, and sell all new guns with a fixed stock that could not fold or adjust the length of pull. BAM! problem solved. The “pre-ban” models that still had extra killy features like a bayonet lug or a telescoping stock that allow the user to adjust the length of pull still ended up selling for more because they allowed the guns to be complete and un-neutered.
This new ban redefines “assault weapons” as pretty much any rifle that can accept one of the 30rd magazines that was factory standard before the first AWB has been factory standard ever since.
Try to buy a KEL-TEK SKG.
I want a new .458 Socom upper but it will wait till this blows over. And it will when the ban is defeated.
Visiting a friends Pawn Shop in Blacksburg, remarked he has found himself keeping Ar’s or AK’s or the shelf and the ammo for both under a week.
Mark: No question about it, when everyone’s buying, it’s NOT a good time to buy. I have never seen any market that goes up so fast hold out for very long. My proud purchase was an Colt SP-1. Original box, unfired and still tagged with factory tags. Included original issue cleaning kit, Colt bi-pod, Colt bayonet and sheath, Colt magazine, Colt manuel and original Colt paperwork. Box serial # matches gun #. And the guy had more than just one! As to investment value, forget it! I’ll probably never get my money out of it esp if I actually start to shoot it. I lived with one of these pups for 365 days long ago. It’s just like seeing an old friend under better circumstances that when you last met.
I’ll say that it’s hard to sink today’s money in these guns because if the ban fails the price will come down. But if it succeeds it’s possible they could become illegal to possess and to sell, so what’s the value then. If it all blows over prices will also fall but my bet is that this time, it will not blow over. This time the momentum is just too strong and those who oppose a ban won’t get off their arses and make their views known. This time, the NRA does not have the influence. This time next year we will be living under different rules related to ALL firearms possession and sales.
There will be no AR 15 ban, why are the prices still so high ???? prices should be back down to $ 1, 200 ..I’ll wait til the price go down to buy one.