Why are Diecast Expensive: What You Need To Know

When we see news of expensive diecast models being sold, most people would wonder how that happens. They are just replica which doesn’t even have motors but some can even be sold for $7.5 million like the Lamborghini Aventador gold. But why is this happening? Why are diecast models expensive? Let’s find out.

Diecast models are expensive for many reasons. One of which is that producing diecast models require some sort of specialization which drives up its labor cost. Furthermore, some diecast models are in limited edition pulling up their price because of increasing demand.

There are multiple reasons why these models get expensive. In fact, I actually listed 9 reasons why these models can get expensive. Let’s start.

Why Are Diecast Models So Expensive?

Diecast models are so expensive because of their labor cost. Producing diecast models requires experts to operate such as when producing smaller model parts. Furthermore, there are licensing fees with actual car manufacturers forcing them to increase their prices.

Diecast collectibles are engineered and handmade. Each model needs a significant amount of time, money, and talent to produce.

Some are antique and classic collectibles, as well as one-of-a-kind similar to jeweler’s masterpiece, sell for hundreds of thousands or even millions of dollars.

Like most stuff in life, you get what you pay for, and model vehicles are no exception. That said, below are some of the reasons why diecast models are expensive

If you would want to see how much the most expensive diecast cars were sold, you may check the article I’ve made here: Are diecast cars a good investment?

1. Chinese Experts Cost/ Professional Labor

With an hourly wage of around $1.20 US per hour, China will still be considered a low-cost labor economy.

Other emerging countries find it difficult to compete with China in terms of arts and crafts.

It could be viable to relocate the manufacturing facility to just a country with cheaper labor expenses to reduce production costs but the Chinese expertise makes this a tough decision to make.

Because precision with which they detail and manipulate such little pieces with their fingertips is unrivaled in the world.

2. Labour Cost

The average basic worker received a lump sum compensation of 400 to 500 RMB Yuan per month a decade ago. 

Their pay has now been raised by another 20% as a result of the Chinese government’s new minimum wage standards.

In 2007, the government enacted the Labor Law, which the industry had previously largely ignored.

As of today, the average worker makes around 2,000 RMB Yuan each month in a lump payment. In China, the average monthly minimum wage is presently around $300 US dollars.

Due to the hundreds of people required to construct each model automobile on the manufacturing line, the ratio among material and labor costs is around 1:4.

The labor cost of diecast vehicles is also significantly high due to the automobiles’ high level of detail.

The reason for this is that meticulous attention to detail necessitates skill, and such expertise comes at a high price.

As a result of the high production costs, the price of the end product, the diecast model will also be influenced.

Factory workers are dissatisfied and will readily abandon their positions in search of better pay elsewhere.

3. High licensing fees

Every year, the license rates for model vehicles rise.

Producing model vehicles were more profitable in the early 2000s when models were around $50 US than it is now when they cost three times as much.

It’s tough to keep up with the ever-increasing expense of production no matter how many times the lease rates are raised.

High license prices are caused by three key factors:

Because the original car manufacturers do not want to leave any money on the table, modeling outfits must pay license fees before receiving authorization to build diecast models.

The second reason is that diecast producers must create models of automobiles that people will want to buy; they cannot simply construct miniatures of vehicles except people already like them.

The third reason is that model producers want the original blueprint from a real car from a brand in order to create model vehicles that are as authentic as possible to delight collectors and hobbyists.

4. Original Manufacturer’s Design

Usually, the prominent luxury cars, race cars, and supercar manufacturers such as Ferrari, Lamborghini, and even Mercedes-Benz sanction the best model brands to ensure that it represents their brand well.

Because each model’s design is a complicated and time-consuming procedure, especially in the case of contemporary car models, designers use authentic CAD designs from the main vehicle manufacturer.

This includes images and digital scans of actual automobiles to recreate the original elements in the miniature diecast vehicle.

5. Handmade by Professionals

A team of skilled model builders creates high-end models by hand.

Some of the kits have over 800 parts and are painstakingly built with meticulous attention to detail.

To create each model, hundreds of hours of specialized effort may be required.

To complete every model, a large amount of time and specialized effort is also required.

6. Value for Craftmanship

A typical 1/18 scale model car presently costs around 120 to 150 US dollars.

Given the amount of effort and investment put into each model that is launched, the pricing is still considered to be very affordable.

Each model is made up of hundreds of components and takes about a year to construct, with hundreds of workers working on the production line for each model.

7. Special Edition

The majority of premium model automobiles are made in special edition releases with extremely short production runs.

Production runs can be limited to 1,000, a few hundred, or even a few dozen in the case of exceptional limited editions.

Individually numbered limited production runs are frequently accompanied by certifications of authenticity.

The cost of these very unusual model cars is influenced by the rarity of these models, as well as collector demand.

Collectors, as you might expect, are willing to spend much more if they know there are only 50 of a certain model available.

Furthermore, these types of models frequently increase in value over time, making them valuable investments.

8. Top-Notch Materials

High-end models make extensive use of premium materials to make even the tiniest aspects of the car, bring them to life.

Specialty textiles for seating including upholstery, leather, carpets, wood paneling, and other authentic materials are frequently used in vehicle interiors.

Because so many various materials are used, the assembling process becomes more complicated.

9. Item of Wealth

Premium models diecast vehicles are exotic collectibles designed for collectors and hobbyists, rather than toys that are for tom, dick, and harry.

It may seem odd to non-collectors why someone would spend several thousand dollars on a 30cm miniature vehicle.

The serious collector, on the other hand, recognizes that these automobiles are works of art and a form of investment.

Conclusion

The ratio between material and labor costs is around 1:4.

Diecasts are expensive due to their high production costs, and as a collectible, they are appreciating assets manufactured in current limited-edition models.

If you value the diecast model so much the rareness and increase in their price become a justification to own them.

Remember, since their price is steadily increasing, this just proves the point that they are really a good investment.

That’s a solid reason why you can even resell them at a high fee later in the future.