Pre-owned coins can be a cost-effective option for collectors and investors.
Buying on the secondary market from coin dealers like The Britannia Coin Company allows you to avoid the premiums associated with new coins and add sold-out issues to your collection.
But what can you expect when you buy a pre-owned coin? What condition will it be in? Will you get the original packaging? What tax will you have to pay?
We have the answers to these questions and more for anyone looking to dip their toe in the world of pre-owned coins.
What Are Pre-Owned Coins?
Pre-owned coins are coins that have had at least one previous owner.
All circulated coins are pre-owned in a way since they have passed through multiple hands but the term is usually used to refer to modern collectors coins and bullion pieces that are being sold by parties other than the mint or authorised dealers.
At The Britannia Coin Company, we sell new coins that have come directly from the manufacturer and a wide range of second-hand coins. You can find out whether a coin on our website is new or pre-owned by checking the 'Summary' tab on the product page. As a rule of thumb, older releases dated before 2021 or 2022 are all pre-owned.
All our coins are labelled as either 'new' or 'pre-owned' on the 'Summary' tab on the product page.
We buy second-hand coins from collectors in our Wiltshire valuation centre and via our postal coin buying service. Most collectors look after their coins, so the pre-owned items we buy from them are generally in excellent condition. Our business model is based on reselling these high-quality pre-owned coins to other collectors and investors.
Benefits Of Buying Pre-Owned Coins
There are several benefits to buying pre-owned coins, including:
- Getting sold-out pieces - Official distributors can sell out of newly released coins fast, particularly those from highly limited issues. If you have missed the initial release then the secondary market might be the only way to complete your collection
- Getting a better price - New coins are often sold for a significant premium over the price of gold or silver. For some popular coins, the secondary market price can skyrocket, significantly exceeding the RRP (Recommended Retail Price). For other issues, the price may drop closer to the precious metal price, allowing you to get a limited edition collector's coin for less
- Getting VAT-free silver - We can sell pre-owned silver, platinum and palladium on what is called the 'Special Second-Hand Scheme' or the 'Margin Scheme' meaning big discounts for second-hand buyers
Coins On The Second-Hand Scheme
If you buy new silver coins in the UK you will pay Value Added Tax (VAT) at a rate of 20%. VAT is a sales tax applied to most products sold by VAT-registered businesses.
There are some exceptions to standard VAT rates, including one that applies to pre-owned coins and bars made out of silver, platinum and palladium. The 'Margin Scheme' as it is known means that as a business selling a second-hand item, we only need to pay VAT at a rate of 16.67% on the difference between the price we buy a coin and the price we sell it for (our gross profit). Because there is much less VAT to pay we can pass on the savings to you, making our pre-owned Margin Scheme coins a very attractive option for investors.
The Second-Hand Scheme does not apply to gold coins and bars, which are already VAT-exempt in the UK and the EU.
Our mixed-date silver Britannias are all pre-owned and sold on the Margin Scheme, meaning you can expect a market-leading price.
Are Pre-Owned Coins Guaranteed Authentic?
Our customers are occasionally concerned that pre-owned coins are more likely to be forgeries than ones purchased directly from the supplier. This is understandable but not the case.
We do not sell fake coins. Our experts have decades of experience handling genuine coins, the benefit of high-end testing equipment and an extensive reference library. We are also institutional members and council members of the British Numismatic Trade Association (BNTA) and follow their Code of Ethics which prohibits selling counterfeit goods.
In the very unlikely scenario that a coin sold by The Britannia Coin Company is shown to be a forgery, we will provide a full refund.
Condition of Pre-Owned Coins
When you buy a pre-owned collectable coin from The Britannia Coin Company you can expect to receive the following:
- A coin with no signs of handling, damage or wear
- Complete packaging as issued, including capsules and boxes in good condition
- All original paperwork, including certificates of authenticity and information booklets
For proof or brilliant uncirculated coins, presented in boxes or sleeves, you may note signs that the packaging has been opened or minor abrasions to delicate cardboard. You may also note signs of natural deterioration to the coin itself including toning and milk spots, both of which are discussed below.
We do sometimes acquire pre-owned coins in poor condition. This might mean damaged or missing packaging, obvious signs of handling or even defacement. You will not find these coins for sale on our website. We do, however, sell some of these coins for a discount on our eBay shop with photos and a detailed description highlighting any issues.
Toning And Milkspots On Silver Coins
Silver and base metal coins can quickly develop a natural patina, even if they are not touched or stored poorly. This is referred to as 'toning' or 'tarnishing' and may be accompanied by 'milk spots' - another naturally occurring effect.
We notice toning on many UK silver proof coins. Toning on silver Two Pound coins is particularly common, emanating from the point that the gold-plated outer ring meets the .925 silver inner ring. Due to the manufacturing processes used by The Royal Mint and other world mints, this is regarded as an unavoidable part of owning and selling older silver coins.
You will find that our pre-owned silver proof and base metal coins all include a disclaimer, explaining that they are likely to show evidence of light toning or milkspots. We do not sell coins that have serious deterioration on our website.
This 2010-dated silver proof Two Pound has developed light but acceptable toning to the silver inner ring over time.
Circulated And Bullion Coins
Coins struck for circulation can be found in pristine condition but it is more likely that they will show some sign of rattling around in cash registers and pockets. Bullion coins too are not handled with much ceremony. Since they are an investment product, most buyers are focused on the precious metal content, not the odd edge dink or fingerprint.
For these reasons, we apply different standards to our circulated and bullion coins than to our pre-owned modern collector's coins.
You will find that our bullion and circulation coins (whether modern or historic) are advertised with a grade or a minimum grade. Getting your head around the difference between an GF and an VF can help avoid disappointment. For instance, a coin graded 'VF' or 'Very Fine' will show minimal evidence of circulation and wear to the high points of the design. This is a high grade for an old coin but if you are hunting for an 'UNC' or 'Uncirculated' example you may need to look at another product.
Grading Pre-Owned Coins With NGC
We are often asked whether our pre-owned coins are suitable for grading.
Grading in this context means sending the coin off to a third-party grading company like NGC or PCGS. For a fee, the experts at these well-known grading companies add the coin to their database and assign a numerical grade on a 70-point scale.
Getting a coin graded in this way can act as a measure of authenticity to some buyers who prefer graded coins. It can also be a way to increase the value of your coin.
If a coin scores highly, gaining the sought-after '70' grade, then you could realise a higher price when you come to sell. If the grade is even a little lower then the value of the coin when sold in its sealed holder, displaying the numerical grade, could be a lot less.
While our pre-owned and new coins are in excellent condition we cannot guarantee they will achieve a 70 grade. This is a risk that buyers take on when they buy coins with the intention of grading them. Even brand-new coins, straight from the mint do not always achieve top grades. Frankly, if we could predict the grade, then we would get them graded ourselves.
Original Mint Packaging
Our pre-owned coins come with all the original presentation packaging unless specified otherwise. For proof coins, this will usually include a display box of some sort, a capsule and a certificate of authenticity. We do our best to describe and provide pictures of the relevant packaging which can vary quite a bit from product to product.
The presentation packaging associated with this quarter-ounce gold proof Harry Potter coin includes a protective capsule, a glossy wooden display case, a black card inner box and a printed card outer box. A certificate of authenticity and an information booklet are also included.
When you buy proof coins directly from The Royal Mint or other manufacturers, they may be supplied in a plain brown or white cardboard box to protect the coin and its decorative packaging during transit. These boxes are bulky so some collectors will discard them. This does not affect the resale value of the coin, as long as the rest of the packaging is present.
Most of our pre-owned proof coins are supplied without the plain cardboard box. If it is present, we will include it, but we consider 'presentation packaging' to encompass the display box, any printed card packaging and original booklets and certificates, not the plain delivery box.
These plain, protective cardboard boxes are not always included with pre-owned coins.
Bullion coins and circulated coins are not supplied with any additional packaging. We post these in a clear coin sleeve. If you would like to purchase a box or a capsule for your coin we do offer a range on our accessories page.
Stock Photos On Our Website
For many of the coins on our website we have several examples in stock at any one time. Because of this we use a standard stock photo that represents the type and grade of coin available but does not show the exact coin you will receive. You may note minor differences to the packaging, strike, grade and wear pattern as relevant.
We offer a small range of 'one-off' coins illustrated with unique photos. These coins are labelled with an asterisk below the image.
In our stock photos you might notice that the certificate of authenticity number, if visible, has been edited out. This is because we cannot guarantee a specific 'COA' number. Other than this we use minimal editing on our images and aim to provide a true representation of the coins we are selling.
In general, we are unable to provide photos of the specific coins we have in stock for you to choose between.
Pre-Owned Coins Versus New Coins
Choosing between pre-owned and new coins is a personal decision and should be informed by your reasons for buying.
If you are an investor, pre-owned coins are the sensible choice. Whether you are after Margin Scheme silver or VAT-free gold, second-hand bullion is generally available for much closer to the metal spot price than brand-new issues.
For the collector, buying pre-owned might be the only way to get hold of the coin you are looking for, particularly if it was issued years or decades ago. If you are interested in recent releases, it is important to consider that the price can significantly rise after the manufacturer and authorised distributors sell out. Further, pre-owned coins, even those in excellent condition, may show signs of age, either to the coin or the packaging, that are usually not apparent on new coins.
When you buy from The Britannia Coin Company you can be confident that our new and pre-owned products are clearly identified as such so you can make an informed decision.
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