Get an answer to the question: “How much is my diamond worth?”
Understanding diamond resale values
Written by: Alastair Smith
Last updated on: August 15th, 2022
Whether you’re looking to sell your diamond, or if you’re just curious, understanding its value can be surprisingly difficult.
There actually isn’t just one value for your diamond, there are many, depending on the reason that you want to know.
In this post, you’ll learn the five different answers to the question “what’s my diamond worth?”
Brand New Retail Price
This is the price that you originally paid and the number that is listed on your receipt.
It’s likely that you know what you originally paid, but one thing to note is that the price that different jewellers charge for an identical ring can vary greatly.
For example, this is the price of a 1 carat, VS2 clarity, I color diamond in a 14k white gold setting at one of the latgest jewelry chains in USA:
Another jeweler (which is actually owned by the same parent company), prices a ring with a comparable 18k white gold solitaire setting and an identical diamond for just under half the price:
For this reason, the price you paid for your diamond ring isn’t necessarily a good indication of what your diamond ring is worth.
The replacement value is the value that it would cost to replace your diamond today, based on current market conditions.
If you have a diamond appraisal document, it’s the ‘replacement value’ that is being listed.
Unfortunately, many appraisals are extremely over-valued, which can lead people to expect too much when it comes to reselling their ring.
For example, this appraisal is for a platinum ring with a 2.7 carat, I color, SI1 clarity ring with excellent cut. The replacement value is given as $50,000:
While it may have been appraised at $50k as a replacement value, an identical diamond can be bought for around $27k – $31k:
The true replacement value is therefore the price of the diamond plus the setting, so around $32k.
Fair market value
The fair market value is the amount that someone is willing to pay for your ring.
This will depend on many factors, including:
- Who they are: whether they are a consumer who is looking to wear the ring themself, or whether they are a jeweler who is looking to sell the diamond ring on.
- The size of the diamond
- The quality of the diamond
- The quality of the setting
- The style of the setting
- The brand of the ring
- The state of the secondary market for that type of ring at the time you are enquiring.
A good place to understand what fair market value for your ring could be is Worthy.com’s ‘recent auctions’ listings.
For example, if we enter 1-1.1 carat, G color, VS2 clarity diamond rings, we can see that they have recently been selling for between $4,900 – $5,400:
We can therefore conclude that the fair market value for a solitaire diamond ring with these specs is in this ballpark as these are the prices that people have actually received for their rings.
Secondary market value
Secondary market value is what a jeweler would be able to sell your ring for once they have bought it from you.
This is likely to be around 60 – 70% of the original value of the ring. After all, the people buying the ring will likely expect a discount for buying pre-owned, rather than new.
For example, The Diamond Oak specialises in designer rings or higher carat weight rings. They are reselling this 1.18 carat, H color, VS2 clarity Tiffany & Co. ring for $12,500.
The original price of this wold would likely have been around $17,500:
The secondary market price is important to think about to ensure that you are being realistic about how much you will actually get for your ring.
This is the value of the raw elements that comprise your ring ie. how much the actual gold or platinum are worth as materials, rather than as a piece of jewelry.
Intrinsic value mostly comes into play for wedding rings that don’t include diamonds, or for diamond rings that include diamonds that have little resale value e.g. a cluster ring comprised of many small diamonds.
In these cases, the amount that you are offered will depend on the ‘spot price’ of gold or platinum on the day you enquire.
Over the last three years, tihs has varied from $1,250 per ounce to over $2,000:
The amount you are offered will therefore be the spot price minus some the purchasers costs and their profit margin.
Why your diamond ring isn’t worth what you paid for it
This isn’t a perfect metaphor, but it’s close enough to explain why the amount you will get for your ring is significantly less than you see listed at a store.
Jessica has had a change in life circumstances and is now looking to sell her sell her 6 month old VW Golf, which originally had a standard price of $25,000, with an extra $2,000 for burgundy metallic paint that she added as it’s her favourite color.
Rather than trying to sell it privately, Jessica decides to sell to a car dealer. On the way in she spots a similar used VW Golf priced at $20,000.
$20,000 would therefore be the replacement value for her car ie. what it would cost to buy a car to replace the one she as.
However, the dealer offers Jessica $13,000 for her car.
This is less than she originally anticipated, and the fact that she paid more to have a special paint color doesn’t increase the amount it is worth to the dealer.
In fact, personalising it with burgundy paint actually makes the car less valuable to the dealer as it’s likely that fewer used car buyers are looking this color compared to a more common colors.
The dealer knows that he has to clean the car, fixes minor issues, take pictures, advertise the car, store the car, pay staff salaries and then a bonus to the salesman who sells the car. All of this takes time and money, so $14,000 is what he can offer to ensure that he can make a profit and stay in business.
$13,000 is therefore the fair market value of the car ie. what someone is actually willing to pay.
Selling diamond jewelry is similar to this.
When you resell a stone, it will then be re-used (either in a new piece of jewelry or sold on) in order for the jeweler to recoup his purchase cost.
- The jeweler also needs to cover his costs to get the diamond ready for resale – this might include getting it reappraised, repolished or resetting it into a new ring style.
- A personal or less common choice in your ring design may mean that while it cost more to buy originally, it will likely be worth less than a simpler design when it comes to selling.
- Jewelry sold using ‘recycled’ diamonds is usually priced lower than jewelry with new diamonds, just like a used car
- The jeweler needs to include a profit margin in the transaction in order to stay in business.
If you bought from a bricks and mortar then the difference between the ‘replacement value’ listed on an appraisal and the ‘resale’ value that you are offered may be significant, and more than you expect.
The only way to really find out how much your diamond is really worth
It’s basic economics that an object or service is only worth what someone is willing to pay for it.
And different people will be willing to pay different amounts, depending on how much they want it.
If you’re selling a ring, it’s therefore important that you sell to the right person, rather than just the first person.
We have a whole blog post dedicated to understanding where the best place to sell your diamond ring is. However, the key takeaway is:
- Brand name e.g. Tiffany, Bvlgari: The Diamond Oak
- Over 1.2 carats: The Diamond Oak
- 0.5 – 1.2 carats (and likely to be worth more than $1,000): Worthy
- Under 0.5 carats: Express Gold Cash
If you are genuinely interested in selling, we recommend you get in touch to receive an offer. It’s the only true way to understand what your diamond ring is truly worth.