How to buy rare collectible coins

If you are a beginner numismatist, the grading and accreditations which surround rare coins can probably seem quite perplexing.

So, for the novice, here are some easy tips to set you on your path to becoming a rare coin expert - set out in ten questions you must ask yourself before buying rare coins.

The tips below apply primarily to US coins, which make up 95% of all numismatic activity among collectors.

Liquidity is to collectible coins what location is to real estate, and you can also use these criteria to help determine what types of coins will be desirable and easily liquidated.

1. Is the coin uncirculated, and how can you tell?

The much-prized 1927-D $20 is one of the rarest collector coins because most were destroyed before they were released into circulation. Uncirculated coins are particularly valuable. But how can you determine an uncirculated coin just by looking at it?

One way to tell is by asking: would you expect an uncirculated, 100 year-old coin to be dull with tiny scratches, or bright and shiny? If your answer is "dull with tiny scratches", then congratulations - you're a natural!

In its original condition, an old coin tends to be dull and hazy and may have a few tiny scratches. If the coin is bright, shiny and has no scratches then this probably indicates that the coin has been buffed or cleaned.

Remember: a shiny coin attracts buyers looking for the wrong thing. Eye-appeal is important, but old coins should be purchased in their original condition, and not cleaned-up.

2. Will a dealer pay you premium for the coin in the future?

Almost all old coins carry collectible premiums. However, there are many coins being wrongly promoted as collectible, which a dealer won't necessarily pay you a premium for.

3. Has the coin ever been re-struck?

Confusingly, in some instances, coins have been reproduced by a country using an old design cast. For instance, Swiss and French franc were produced in the 1940s using an old die cast, and bearing an older date.

In Austria, Ducats bearing the date 1915 are currently being reproduced. And, of course, mistaken or dishonest dealers are offering them as rare old coins for a premium.

And so the problem emerges: no-one knows the true population of the coins made with that date, nor how to tell the old from the new. So what can you do?

The answer is: keep your ear to the ground and pay attention to industry news. In today's internet and information-saturated age, once a coin is found to be illegitimate the world and his wife will quickly know about it.

4. Does the coin have a low mintage (meaning not many were made)?

A rare coin doesn't necessarily have to be "rare" by population, but it should be scarce. So, although many US coins were made in big populations, what really makes a coin scarce is the condition it has survived in.

For instance, the reported mintage figure for the 1927-D $20 gold piece was about 180,000 pieces - fairly high. Yet it ranks as one of the all-time rarities in the series because most of the 1927-Ds were destroyed before they were released into circulation.

On the other hand, the 1913-D $20 had yet small mintage of 34,000 pieces. But there is little or no premium attached to these coins because almost the entire mintage survived.

Although, if a coin is in great original condition and has also originated from a small population, then you are looking at a seriously collectible buy.

5. Is the coin over-valued or under-valued?

In other words, is the coin over-priced at this time: ie, is it being over-promoted by the dealer without really having good upside potential?

During the Y2K crisis, many dealers promoted cheap double eagle coins as great future investments, then priced just $80 or $100 above their gold value. Collectors bought them as bargain investments preferable to pricier uncirculated double eagles.

These buyers were duped: after Y2K, it was discovered that many of the coins were worth little more than their melt value.

So, if you are looking for less-expensive buy, keep an eye out for old and uncirculated coins with sizes and premiums similar to modern fractional bullion coins. This will help you spot good, appreciating coins.

6. Is the coin over-graded?

All too often, coin dealers will shirk the responsibility for the accuracy of coin gradings - that is, to value the coin by analysing its surface preservation, strike, lustre and eye-appeal (see below). Typically, they will refer to the current grading service standards.

This can pose a problem, and can work against market trends. Coin grading standards can change or loosen-up in order to introduce more coins to the market. The opposite scenario is that there may be no demand for the coin.

Keep an eye out for dealers that respond to changing market trends - particularly ones who will guarantee to buy-back the coins at the same grade they sold them to you.

7. Was the coin minted prior to 1934?

The question particularly applies to US coins. In 1934, the US stopped minting coins as legal tender as ordered by President Franklin D Roosevelt, to take currency out of the hands of the public during the depression.

Numismatic experts agree that only 2% of US coins minted prior to 1934 are available on the coin market today.

Ninety-five percent of these coins were melted down by the US after being confiscated form the public, with others destroyed in private industry meltdowns, or simply lost.

As a collector, you can be sure of the rarity of your purchase thanks to regular figures published by the Professional Coin Grading Service (PCGS) and Numismatic Guarantee Corporation (NGC).

8. Is the dealer reputable or well capitalised?

In the United States alone, there are currently around 5,000 coin dealers. Only a handful of them are reputable and established with the ability to give you the best service and advice.

So, our final piece of advice is: research your dealer thoroughly before you do business with them, through their history, and other collector's feedback.

In the UK, Companies House ( offers free information on organisations' date of incorporation, registered address, whether their accounts and returns are up-to-date and it has a list of disqualified directors.

Or the Department of Trade and Industry (DTI) has a section of its website dedicated to warning about scams (

9. How do you grade a coin?

Here are the four factors taken into account when grading a coin:

  • Surface preservation: analysts look for bagmarks, hairlines from cleaning or mishandling and other perfections (mint caused or man-made), their severity and their location on the coin's surface
  • Strike: or the sharpness and completeness of detail in the coin's design. The normal characteristics of the coin's age, type and mint mark (or issue) are taken into account
  • Lustre: or the brilliance, cartwheel, sheen and contrast of the coin. Again, each issue's characteristics are considered. Evidence of cleaning, retoning or friction is also examined
  • Eye-appeal: that is, the aesthetic appeal that results from the attractiveness of the coin's toning, the balance of the coin and the combination of all the coin's qualities.

Generally, surface preservation is considered the most important of the above four grading factors, with the other three equal in value and about half as important as surface grading.

10. How does the industry define a rare coin's condition?

For US coins, the industry uses a 70-point numerical grading scale to define the condition (or grade) of a rare coin. Mint State (MS) coins were struck for general circulation. Proof (PR) coins were specifically struck for coin collectors.

Coins graded MS63 or PR63, or higher, are usually recommended for purchase because they a) have shown the best rates of apprecition, and b) are more attractive. 

So there you have it: some key pieces of advice to bear in mind when taking your first steps into successful coin collecting.

These are just novice starter tips, and the key with numismatics is to constantly acquire new knowledge in order know what you are doing - but that's all part of the fun!

Paul Fraser. 

PS. You can explore my remarkable selection of rare and valuable coins here.

PPS. Looking for more info? Sign up to my free weekly newsletter for all the latest from the world of collectibles.

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