I have read your book *"How to Buy a Single
Engine Airplane" and learned a great deal. One question I have is
that since you have done so many plane transactions, you made mention that you
see most planes go close to the base retail price as noted on Vref?
still a buyer’s market? If that is still true, would a better deal be below
base retail? As I look at pre-owned planes I want to make sure I don't
pay too much. Thanks for your advice if you have time to answer this
for the email. I personally think that it is still a buyer’s market. I am still seeing a slight increase in sales,
but the market still seems to be slower than it has been in years past.
I’ll guess that a lot of people have an opinion about this. I also see a lot of prices when we are
insuring aircraft purchases. I try and
keep an eye on the values of the new transaction and compare them to the book
to see what the buyers are paying. And the underwriters will question a value
that is too high or too low.
this is my opinion
about the market.
that many of the aircraft advertised are overpriced and now that the investment
and aviation markets seem to be growing again, the sellers are reluctant to
lower their prices for a sale and risk losing money. Additionally, fairly
low interest rates will allow sellers to keep a higher price. The sales pitch is that the payments will
still be low.
My guess is that the seller will try and wait for the higher price BUT, even
then, it appears that most of the aircraft end up selling for a price that is
around the base values listed in the books.
The Vref base value takes into account the average number of hours that the
aircraft should have on the airframe and engine at the time of sale. The base price also includes a standard radio
package for the model and an average condition.
That is probably representative of over 50 percent of the aircraft on
the market. So the base price is
probably representative of over 50 percent of the aircraft for sale. Sure, you can add for low engine time and low
airframe, but it all seems to balance back towards the base price. A plane with a low total time, say 1,500
hours, will get an increase in value for the hours. But if the engine has 1,500 hours on it also
(and a 2,000 TBO) the book will reduce the value for the engine hours over the
halfway point of 1,000 hours. Typically,
the value of the engine per hour is higher than the airframe per hours.
course, if you have an aircraft that is loaded with all kinds of fancy
modifications or avionics, the price will probably not be close to the base
book values. But on the average, basic
book values are pretty close.
*The book "How to Buy a Single Engine Airplane" is out of
But email me for a packet of buyers tips.
Labels: aircraft, aircraft ownership, aircraft sales, AOPA, Aviation, aviation insurance, aviation market, buying aircraft, Cessna, EAA, FAA, flight training, GA NEws, Piper, vref