Angry buyers of Steinway pianos say they were duped by salespeople who told them the instruments would increase in value, though they actually plunge in price by 50 percent or more as soon as they leave the showroom floor, according to a report Saturday.
Owners of the ultra-expensive instruments, which cost between $70,000 and $150,000 when new, said salespeople lied to them about what their pianos’ worth in the future, the Hatch Institute reported Saturday.
Customers said they were shown charts of steadily rising prices for new models and were told that buying a Steinway made a better investment than Wall Street stock, the investigative journalism site said.
One Steinway brochure, titled “Your Steinway Investment,” claims that “for more than a century and a half, every handmade Steinway has increased in value,” adding that their pianos were “an investment instrument unique in all the world.”
But when owners tried to sell, they learned their Steinways were worth tens of thousands less than what they’d paid, even when the pianos were just months old or had never been played, the site reported.
One customer never took home the piano she purchased for $78,000 in 2013 after she agreed to accept an inexpensive upright while paying down a layaway loan that pushed the total cost to $100,000.
Kelly Kilrea made $68,000 in payments but when she could no longer afford them, she looked into selling the instrument, only to learn that she wouldn’t get more than about $33,000 from a used-piano dealer, which is what still owes Steinway.
“I said, `Are you kidding me? How is that possible when it’s supposed to appreciate.’ It was in showroom condition.”
The Steinway Gallery in Virginia, where she bought the piano and where it has remained all these years, then repossessed it. Kilrea is trying work out a deal to complete the sale, but she needs to borrow from a third party to pay off the loan.
“They use the word investment,” said Ronen Segev, who owns Park Avenue Pianos, which buys and sells used Steinways. “Steinways go up in value. It’s part of the expectation. Then you look at the secondary market and you see what prices are. It really shocks people.”
Company spokesman Anthony Gilroy conceded that Steinways “go down in value significantly right off the bat.” He said claims by salespeople that the pianos increase was “a very rare occurrence.”
As for the brochure making that statement, he said he “pulled it months ago from the website.” But Hatch found it was still widely in use.
Steinway, a central part of Astoria since 1870, when founder William Steinway set up shop there, is one of the few manufacturing plants still in New York. All new Steinways sold in the U.S. are made at the company’s headquarters.
The firm, which also once owned a palatial Victorian mansion with turrets and a tower a block away, is now being shopped by its owner, hedge fund billionaire John Paulson, who is asking $1 billion. He bought it for $513 million in 2013.