Value of Used Aircraft [Archive]

DX Wombat

30th Sep 2007, 21:45

And another good reason may be the appalling (from what I have seen) apparent indifference to providing decent after sales service by Diamond and Thielert and also the poor standard of maintenance provided by at least one approved facility. The DA40TDi which I usually fly has now been grounded for months because they sent the wrong engine for it (it had been ordered in plenty of time) and now I've been told that there isn't a single engine available in the whole of Europe. I like flying the DA40 but being told that it is going to be grounded for the foreseeable future doesn't endear me to either Diamond or Thielert. How can they get such an important matter so wrong?
PS: It isn't my DA40TDi - just the one I fly and I am getting more and more fed up with the situation. :*

IO540

1st Oct 2007, 06:41

The general answer is that depreciation, very low in the early part of this decade, has accelerated and is now rapid.

A lot of people are saying the plane market is going like the car market.

A lot of the "blame" in the £259k market is of course Cirrus. You can't sell thousands of new planes, especially marketed specially to people who are not flying anoraks, without a fair proportion of them ending back on the market.

In Europe, Diamond have done their bit for prices too, but got a bit of a bad name with the engine issues, so depreciation on them is high too.

The glass cockpit situation is another factor - you can't give away a new plane without glass, and this depresses used values (wrongly IMHO since a glass cockpit does not give any extra mission capability over decent current avionics).

It's a good time to buy a used IFR tourer - for the long term. I now see some 1980s TB20s advertised for £40k - even though these are obviously old dogs, this is amazing since you could buy one and thoroughly refurbish it and still have a very capable machine.

A £200k metal plane bought in 2002 is now worth about half that.

Rod1

1st Oct 2007, 07:32

IO540

I would have thought that the cost of fuel on “conventional” machines such as the TB20 would have had an impact on the second hand value. Most UK pilots are VFR only and there are much less expensive ways of touring VFR which were not available 5 – 6 years ago.

I sold my AA5B 4 years ago for about £43k, but it is now unsold and advertised at £32k in very similar state to when I sold it. On the other hand Rotax 912 powered kit is selling in large numbers, and with new 912 kit selling for less than 100k, the old tec aircraft are suffering.

Rod1

sternone

1st Oct 2007, 10:07

It's a little bit (litte bit) like with sailboats, some manufactures came with prices on the market (bavaria, ...) that were the same or lower than some second hand boats and alot of people who weren't sea rats bought these things togheter with renting companys, the result is that there are way to much sailboats for sell wich drops the price and raises the time a sailboat gets sold...

I'm looking at both: new and used planes, i'm gonna buy a plane as soon as i'm rated but when i look at the second hand market i have noticed:

* there are way to much planes for sale, the market offering is much higher than the market demand
* second hand planes tend to be on the market for long periods (6months - 3 years)
* second hand planes gets sold for ALOT less than they are advertised (up to 40% ?)

Anyways, buying a plane isn't a rational descision, you shouldn't buy a plane normally......if it floats, flies or f*cks: rent it!

Luckely in life we have kicks out of emotional descions like buying and owning a plane, but you must know that emotional items costs somethimes a lot of money! A plane is not an investment.

I agree with IO540 that for way to less money you can get a capable non-glass aeroplane these days...but remember this: resale value of your bargain will be even more less!!!

VORTIME

1st Oct 2007, 11:03

Sternone - are they really going for 40% under their asking price?!

VT

sternone

1st Oct 2007, 11:14

Sternone - are they really going for 40% under their asking price?!

Well i had spontainiously a few sellers that while talking to them they dropped the price 30% to what was indicated on http://www.planecheck.com/ ... so that means that i could in my opionion drop another 10% ....

You know, the market is always correct, i'm not willing to pay a dime for emotional value for the other person... it's the choice of the seller to ask X amount for his plane, it's also his choice to got stuck with a plane that won't sell for years.. when they do have a seller they seem to panic easely and drop massivly, but again that is the free market isn't it...

What is a correct price for an item ? It's what the buy wan'ts to give for it... not anything else...

sternone

1st Oct 2007, 11:17

It's a good time to buy a used IFR tourer - for the long term

I would also like to hear from IO540 besides the tobago range what he finds a good/bargain IFR tourer ?

Rod1

1st Oct 2007, 14:01

Having spent some time over the weekend reading about the new part M maintenance and the likely increase in maintenance costs for C of A aircraft that are not in annex ll, I would expect the second hand cost of your British registered TB20 to drop again, and soon.

I would not agree that aircraft are bought with the hart and not the head. I have owned various aircraft, and shares in aircraft since 1991, and am currently many £1000’s up, which is not to say I have always got it right, but the current trend was predictable and much discussed on the BBS before it happened.

The new Euro LSA category will be in place within the next few years, which will again depress prices of older tec aircraft as brand new factory built aircraft with much lower running costs than our old Pipers and Cesspits flood in.

Rod1

IO540

1st Oct 2007, 14:13

Rod1 - I am not getting into the "PFA debate". Fuel is only a part (under a half) of the direct operating cost. It has always been the case that flying a lawn mower with wings, even an enclosed one, is much cheaper than flying an IFR legal and more importantly IFR capable machine with a 20k/25k ft ceiling and the capability to do a 900nm leg across Europe, above most weather etc. You pays your money and you takes your choice. One day I may be "VFR only" and then I will join your camp - but I will be doing it with a carbon fibre airframe with a PT6 on the front of it :) and not a Rotax :yuk: FYI the DOC of my TB20 is less than renting a C150 from a school.

Sternone - you ask 50 pilots and you get 50 answers. It's partly an emotional choice - especially if you fly only VFR - and everybody is "right" in what they bought.

For European IFR touring, looking at the cloud tops being below 18k or so some 95% of the time, the best buys will be the TB20 / SR22 / DA42 kind of thing. If you are happy with one door (I am not) then this expands to Mooneys.

IMHO you can't beat a TB20 and I would buy another one today - get a good condition TB20GT and expect to pay £ 120k-150k depending on hours, avionics etc. It's an attractive, modern, comfortable and very civilised plane which everybody loves to fly in, 5-6 hours even. Try to get one with the GNS430+GNS530, or the alternative KLN94+KMD550, and the KFC225 autopilot. Shadin flowmeter and EDM700 of course.

I have never flown the SR22 but would imagine it is similar. The fuel flow is similar at a given speed to the TB20. However, TB prices are more depressed due to Socata's botched announcement of the production stop, which is in your favour.

You will never get back what you paid - the way to look at this is that you will keep the plane for a long time.

sternone

1st Oct 2007, 14:25

but I will be doing it with a carbon fibre airframe with a PT6 on the front of it

My wild guess is that you mean an Epic ?

walkabout

1st Oct 2007, 14:34

I think one of the main drivers recently has been the $ exchange rate. At the end of 2002, £1 bought you $1.4, compared to $2 today meaning the price of new US manufactured aircraft has fallen by 30% in Sterling/Euro terms over that timeframe. This is turn pushes down second hand prices down of those aircraft and that knocks on across the market genarally, not withstanding the fit outs.
Question is, has the dollars depreciation run its course and is due for a reversal or not!
W

sternone

1st Oct 2007, 14:39

Question is, has the dollars depreciation run its course and is due for a reversal or not!

Absolutely NOT!!!!

USA cannot make their dollar stronger because that will hurt their badly needed export!!!! In my opinion the dollar is still over-rated!!!

An article some month's ago in UK's Pilot magazine about importing planes from the USA covered stories about people paying more at the end that if they would have bought their second hand plane in the UK in the first place...they concluded that you don't gain money with it, i don't know if they did that to protect the UK market or not....

I'm also still waiting for an article in any magazine with a test about a plane that is actually a bad plane and not good enough to buy!! Besides some minor issue's no magazine got balls enough to write that some design is crap or not a good choice enough.. i understand them since they earn money from the advertisers and little from the subscribers...

Contacttower

1st Oct 2007, 14:55

I'm also still waiting for an article in any magazine with a test about a plane that is actually a bad plane and not good enough to buy!!

We need a Jeremy Clarkson of the flying world. To be fair though there aren't actually that many really bad planes around. What do people think of the Rockwell Commander as an IR tourer (including from the value point of view)?

gasax

1st Oct 2007, 15:19

I would suggest a read of the US mag "Aviation Consumer". It is the only publication I have seen where they actually look at the ADs and accident history of the aircraft they are reviewing. Even stranger the aircraft they review are not for sale (any particular airframe) and they do not fly it as a 'freebe' and then just happen to include it in a magazine effectively as a huge advert.

You're right it would never catch on!

sternone

1st Oct 2007, 16:18

I would suggest a read of the US mag "Aviation Consumer".

I just took a subscription :-) let's see what they give me, and if you're right they deserve more paying members :ok::ok::ok::D:D:D:D

Hampstead

1st Oct 2007, 18:13

I would say this because I own one and am a huge fan, but Commanders are extremely capable tourers particularly the later ones (1993-2001). Not quite as quick as a TB20 but it's a larger aircraft and more comfortable as a result. There's still a lot of uncertainty surrounding the factory starting up again which has inevitably hit prices a bit, Then again, a 2001 115 went for over £200k recently.

Islander2

1st Oct 2007, 19:19

With all these references to TB20, SR22, Mooney, Commander, etc, I thought I'd better put in a plug for the Beech A36 Bonanza, the "Rolls-Royce of IFR SEP tourers!"

Vested interest? What vested interest? :ok::ok::ok:

VORTIME

1st Oct 2007, 21:54

I presume of the options the DA40 would be the cheapest to maintain? Composite frame, prorata engine warranty, solid state avionics, fixed landing gear etc ?

Commander/TB20 look great but would hate to foot the maintenance bills? Or am I wrong?

VT

PH-UKU

1st Oct 2007, 22:49

Anyways, buying a plane isn't a rational descision, you shouldn't buy a plane normally......if it floats, flies or f*cks: rent it!

And if it does all three .... ? :E :E :E

IO540

2nd Oct 2007, 06:27

In nearly 6 years with the TB20, from new, my only significant bill so far has been a new battery, at about £300, and that one lasted a lot longer than it should have.

There was a large amount of in-warranty work on the mostly American-made avionics, the reason for which was never determined but I have one or two ideas... but all planes have much the same avionics, and if you go to glass then a whole lot could go at the same time. The only way to definitely avoid avionics suprises is to not have any avionics.

If you buy new, and it's a good proven design like a TB20, you should not expect major bills for 10-15 years. After that, airframe parts will start to go, and they are always expensive no matter what it is. £7000 Annuals can be normal for a very old C150...

So, buying something say 25 years old is merely trading initial expenditure for continuous expenditure. To get the best out of the initial depreciation, the best buys are well under 10 years old, and hangared. Damage caused during maintenance (usually the main reason for airframe damage) excepted, mine still looks like new.

I have never flown the Commander but looked at a number of them when looking in 2002, and all advice I got from maintenance shops was "avoid", due to maintenance complications resulting in long time spent on the ground. One I know of has been grounded for 6 months waiting for parts. I fly a lot and would find that absolutely unacceptable.

Hampstead

2nd Oct 2007, 08:29

It's true that some maintenance places avoid Commanders..it's happened to me. The reality is somewhat different however and I have not had any problems in 4 years of ownership (then again, not much has gone wrong as it's a relatively new one). ASG in Guernsey are fantastic when it comes to Commanders. Mann Aviation at Fairoaks also are pretty good.

The Commander factory is supplying parts again too.

sternone

2nd Oct 2007, 09:27

And if it does all three .... ?

Then you have a strange sex life!!

Beech A36 Bonanza, the "Rolls-Royce of IFR SEP tourers!"

I guess you can't find real bargains on them ? they seem to keep their prices somehow ?

a good proven design like a TB20,

IO540 how come the demonstrated crosswind is so high ? 25knots ? Are spare parts no problem for the TB20 ??

IO540

2nd Oct 2007, 09:34

Hampstead - as I wrote, I would not expect you to need any airframe parts for your Commander for another 10 years. But if you bought a 25 year old 112 or some such, the situation would likely be very different.

Sternone - the max demo x/w of 25kt is real, and the TB20 is easy to land. I am no great pilot but to date I have done just ONE go-around due to my "performance". All go-arounds were caused by traffic on runway, etc. In 700hrs on the type, I have never yet cancelled a flight or diverted due to destination surface wind. Parts have never been an issue; I have not needed any airframe parts but there are no reports AFAIK of parts keeping planes AOG for significant periods. Production has stopped so if e.g. you wrecked the composite roof on the TB20GT then you have a problem, but this is kind of hard to do... The elevator trim tab hinges last about 1000hrs and cost £600 and I have a spare set ready...

I did look at the A36 back in 2002 and decided the DOC would be about 50% higher than a TB20. It's a bigger plane. Obviously it is also more capable in terms of payload, and a turbo should give you a 25k ceiling. Whether the cost increment is worth it depends on the desired mission profile, and the same argument would apply to a TB21 which is a just a turbocharged TB20 but with a silly engine overhaul cost (it's a rare variant of the TIO-540).

VORTIME

2nd Oct 2007, 10:25

IO540 - so why do people claim owning an aircraft is bottomless money pit? I was reckoning on spending a lot more on maintenance etc.

sternone

2nd Oct 2007, 10:28

IO540 - so why do people claim owning an aircraft is bottomless money pit? I was reckoning on spending a lot more on maintenance etc.

Buy a boat, then you know what a bottemless money pit is...

IO540

2nd Oct 2007, 10:39

IO540 - so why do people claim owning an aircraft is bottomless money pit? I was reckoning on spending a lot more on maintenance etc.

Firstly, because most people posting on pilot forums haven't got a clue what they are talking about.

Especially when it comes to type specific information. Most people have exactly zero experience of owning and just regurgitate old pilot forum rumours.

Those that have owned (look at the average age of the GA scene, c. 25 years) tend to have owned very old airframes, and they usually are bottomless pits for money. Buying an old plane for say £30k versus buying a new one for say £140k - the difference of £110k has to be sunk into a large pit somewhere... and that pit is called "maintenance". But if you bought one say 5 years old for say £80k, you should get 10 relatively cheap years.

I am happy to meet up with any prospective TB owner and show them my plane and my maintenance records and operating costs.

Buying a plane is the best thing I ever did - never regretted it for a second. Never regretted buying a new one either - it fits my mission profile better than anything else on the market, so I will keep it for so many years that the depreciation is largely irrelevant.

If you really worry about the long term depreciation, then forget buying anything and put your money on the stock market :) After many years, you will be very rich, and then you will die, having done exactly nothing interesting.

Buy a boat, then you know what a bottemless money pit is...

Yeah but there are some worthwhile extras (http://i101.photobucket.com/albums/m74/peterh337/boat.jpg)you can get while blowing away your fortune... I took this pic at Hvar, Croatia, a few weeks back. If only 1% of this money was spent on GA, we would have airports with gold plated toilets.