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I bought a shiny new black Les Paul Custom back in 1980. I paid something like 8 or $900, if that? Anyway, kept it for a couple years then sold it (just not for me). I also bought at the same time a very basic Ovation Applause acoustic for under $200. Now, that very Les Paul would go for near $5000. The other one... next to nothing.

Point is, I don’t understand why that Les Paul would go for near $5000 when a brand new one is (likely) just as good - if not better - and a lot cheaper. It’s not a rare guitar either, really. And, it’s not like they gain anything with age anyway. Acoustics age and “mature” in sound quality to be sure so I can see their value go up (Ovations with the weird “plastic” backs don’t count). But electrics?

What’s the rationale?
 
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I think it was the Rev Billy Gibbons who started it all by buying all the old guit's that he could lay his hands on.
 

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I bought a shiny new black Les Paul Custom back in 1980. I paid something like 8 or $900, if that? Anyway, kept it for a couple years then sold it (just not for me). I also bought at the same time a very basic Ovation Applause acoustic for under $200. Now, that very Les Paul would go for near $5000. The other one... next to nothing.

Point is, I don’t understand why that Les Paul would go for near $5000 when a brand new one is (likely) just as good - if not better - and a lot cheaper. It’s not a rare guitar either, really. And, it’s not like they gain anything with age anyway. Acoustics age and “mature” in sound quality to be sure so I can see their value go up (Ovations with the weird “plastic” backs don’t count). But electrics?

What’s the rationale?
A new custom will be North of 6k now... and really what it boils down to is fair market value, shit is is worth whatever people are willing to pay.
 

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I think a lot of it has to do with the people who are buying these vintage guitars.

Most people I know that are specifically seeking vintage guitars are nearing or past retirement age. They grew up in a time when their heroes were playing those instruments, and that nostalgia carried on with them to their adult lives.

Couple that with the fact that there’s only a finite number of 50s, 60s, 70s and 80s Gibson’s around, and that’s where the demand/ pricing comes from.

Some brands weren’t as popular back in the day, and that carried forward too; although some unpopular instruments now command huge prices as well.
 

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I bought a shiny new black Les Paul Custom back in 1980. I paid something like 8 or $900, if that? Anyway, kept it for a couple years then sold it (just not for me). I also bought at the same time a very basic Ovation Applause acoustic for under $200. Now, that very Les Paul would go for near $5000. The other one... next to nothing.

Point is, I don’t understand why that Les Paul would go for near $5000 when a brand new one is (likely) just as good - if not better - and a lot cheaper. It’s not a rare guitar either, really. And, it’s not like they gain anything with age anyway. Acoustics age and “mature” in sound quality to be sure so I can see their value go up (Ovations with the weird “plastic” backs don’t count). But electrics?

What’s the rationale?
It doesn't make sense to me either, nor does paying $5000.00 for one new or old but I think what Ronbeast explains is the reason for the prices being so high.
 

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It can get mind-boggling for sure. I love when people are posting 89’s and 90’s Fenders on Kijiji, calling them vintage, and asking idiotic prices.
 

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It doesn't make sense to me either, nor does paying $5000.00 for one new or old but I think what Ronbeast explains is the reason for the prices being so high.
LMGTFY

You're obviously in the minority... because if everyone thought like you the prices would be lower. Like I said, prices reflect demand and people's willingness to pay.
 

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... and really what it boils down to is fair market value, shit is is worth whatever people are willing to pay.
Just a quick interjection. The above comment, the ' what the market will bear' argument is a gross oversimplification that I am tired of hearing ( on the news; in a larger economic/ political sense; see also wage issues) so I feel the need to challenge it.

There are factors other than this that can affect pricing other than simple supply and demand. Why a price is the price is a very complex process with many factors and most of the time, not at all as sacred, hallowed or even fair as a free market fanatic would like you to believe. For example, there is both conscious and unconscious collusion to increase (or decrease/supress, as the case may be - see wage issues) prices. Conscious is obvious ( see the whole Joe Walsh thing), but unconscious is the mere fact that we all want to maximise sale value; collective efforts in this direction ( internet hype machine; increasing asking prices on eBay and reverb and people not checking actual finished listing vs the inflated BIN on an item resisted for the 5th time etc).

This all has a small but cumulative effect. Buyers are slowly conditioned to expect to pay more, and there's also the further mindfuck that they too, one day would like to flip this item for double what they paid for it. Same reason poor rural people vote for rich urban populists. Those are just examples and not an exhaustive list.

However, in the case of the vintage LP custom, I do agree, a new one is 6Kish, so if you put value on the vintage aspect then that is actually not a bad deal. If you want one cheaper, buy a recent used one, or a quality alternative brand. If it bothers you that a Gibson costs so much, vote with your wallet and get something else ( their 'only a Gibson ...' tag line is BS; at various times there was always another brand making as good or better quality LP).
 

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The monthly price guide in Vintage Guitar magazine is a good source to turn to. They survey a healthy sampling of dealersand store-owners who deal in older instruments, and get an average low and high price for instruments, amps, pedals in excellent condition. They obviously can't cover everything ina mere 3 pages, so what dealers get suurveyed about changes monthly, with some more popular items repeating intermittently. For instance, the current issue with the beat-up59 Bassman on the cover shows a 1992 Ovation CustomBalladeer going for between $600 and $800 in excellent shape, and a 1982 Gibson Les Paul "Guitar Trader Reissue" with Shaw PAF's and "highly flamed" going for $4000-$5200. Keep in mind, that's what experienced dealers GET for them, not simply inflated prices they ask on E-bay.
 

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$900 in 1980 is about $2700 now, with inflation.
I was thinking he same thing. However, on many retail items, the prices have gone down, not up. Remember how much a 50" TV used to cost? With the efficiency of manufacturing since 1980, I don't think that applies to guitars, either.
 

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Supply and Demand essentially. Defining demand may not be straight forward though. Emotional components, like desire and taste and pleasure, can definitely factor into demand. Think classic car analogies: 1968 Plymouth Hemi Road Runner or a 1961 Ferrari 250 GT (definitely a taste factor difference here but desire can be just as strong). Then there is the investment aspect. In the same ballpark as investing in gold, but obviously more pleasurable in many ways
 
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I bought a shiny new black Les Paul Custom back in 1980. I paid something like 8 or $900, if that? Anyway, kept it for a couple years then sold it (just not for me). I also bought at the same time a very basic Ovation Applause acoustic for under $200. Now, that very Les Paul would go for near $5000. The other one... next to nothing.

Point is, I don’t understand why that Les Paul would go for near $5000 when a brand new one is (likely) just as good - if not better - and a lot cheaper. It’s not a rare guitar either, really. And, it’s not like they gain anything with age anyway. Acoustics age and “mature” in sound quality to be sure so I can see their value go up (Ovations with the weird “plastic” backs don’t count). But electrics?

What’s the rationale?
If you think that's a lot to pay for an old LP, do not look at what people are getting for the ones they made 20 years earlier. It may cause permanent damage.

 
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