You can be sure that whoever sold Prince William his wife's wedding ring did him a good deal. However, not everyone is so lucky. One firm, which lends money secured against high value items, is seeing an influx of people borrowing against wedding and engagement rings. And for every person walking out with a loan, there are plenty who are more left open-mouthed when they discover that their ring is worth a fraction of what they paid for it.
So how are wedding and engagement ring buyers getting ripped off?
Rip offsThe problem is that jewellery retailers will add in a premium for the brand. And while you may be happy to pay for the name on the outside of the box, many people are surprised when they discover exactly how much they are paying for it.
Sam Lilley, head of valuations at borro.com, says: "Jewellery Retailers are known to have a mark-up of between 3 and 5x the open market worth and for luxury jewellery houses the mark-up can be as much as 10x the open market worth."
When you bear in mind the kinds of rings we're talking about, this mark-up is eye-wateringly huge. The company has made a £90,000 loan against a 5 carat marquise cut diamond ring, a £55,000 loan against an emerald cut diamond ring, and a £50,000 loan against a ring featuring two tapered baguette diamonds.
How to buyIf you're considering popping the question, and planning to use an antique ring, Lilley recommends buying at auction, where you will only pay the true market worth: "If you attend recognised auction houses such as Christies, Sothebys and Bonhams, they employ highly qualified jewellery specialists, so the jewellery you will be able to buy will be guaranteed quality goods at affordable prices. Auction houses will even provide condition reports upon request, giving you peace of mind that the jewellery you may wish to purchase is in good condition."
The process isn't entirely straightforward, however, because the price you bid will not be exactly what you pay. Lilley explains: "Always remember when buying at auction, there will be further charges applied to the hammer price. The 'buyers commission' as it is known will vary from house to house so it is best to check what additional charges will be incurred before you leave a bid. Please note that all buyers commission will also be subject to 20% VAT. As a general rule of thumb, it is best to add on an extra 30% to the hammer price which should cover all of the other charges."
Lilley says that when buying at auction it's also worth looking out for jewellery with British hallmarks, signed pieces, jewellery accompanied with certificates from recognised gemmological laboratories, such as the Gemmological Institute of America and jewellery with paperwork from luxury jewellery houses or retailers.