R22 Corner
Joined: Jan 2006
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From: Oz
R22 Depreciation
This is a quote from someone selling R22's - could someone shed some light on whether this is actually the case...
"Depreciation (Negligible, freshly overhauled R22s typically sell for more than $ N/A their original cost)"
Any help much appreciated
"Depreciation (Negligible, freshly overhauled R22s typically sell for more than $ N/A their original cost)"
Any help much appreciated
Joined: Aug 2000
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From: 5 nM S of TNT, UK
The "negligible" depreciation assumes that you put away a large amount of dollars each month/year to cover the mandatory rebuild at 2200 hours/12 years. If you don't, the drop in value with time (which I would call depreciation) is very considerable. It is true that after the rebuild the value is close to that of a new one, but any premium would only happen if there was a real shortage of new ones.
Joined: Jan 2006
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From: Oz
Thanks Muffin
So, in a busy school (assuming I did a leaseback) I may recoup my costs? I aim to do 200 hours of training myself in the same machine at the same school.
I've been offered an 80/20 split but I pay insurance, hangar, maintenance, 100hr inspections etc. It's a busy school and could have used the 2200 hours by the end of the year (apparently).
Any thoughts?
So, in a busy school (assuming I did a leaseback) I may recoup my costs? I aim to do 200 hours of training myself in the same machine at the same school.
I've been offered an 80/20 split but I pay insurance, hangar, maintenance, 100hr inspections etc. It's a busy school and could have used the 2200 hours by the end of the year (apparently).
Any thoughts?
Joined: Jan 2000
Posts: 438
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From: Derby
"Insurance company says no problem we’ll pay for one quarter of the above"
What's the rationale behind that ? Why only a quarter of the repair costs ? Apart from "we don't want to pay out even the slightest bit more than we have to" ?
What's the rationale behind that ? Why only a quarter of the repair costs ? Apart from "we don't want to pay out even the slightest bit more than we have to" ?
Joined: Jan 2006
Posts: 259
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From: Oz
So, premiums should go down as the helicopter gets older then?!
But I was thinking of buying new. Would the insurance companies not pay to cash for 1 quarter value then? Assuming at that point that I had made the money on leaseback etc?
But I was thinking of buying new. Would the insurance companies not pay to cash for 1 quarter value then? Assuming at that point that I had made the money on leaseback etc?
Joined: Feb 2002
Posts: 176
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From: england
You insure the machine for its current value, weather its 40k - 0r 100k and thats what the insurance co pay less the hull value it you keep it or let them have the lot.
I know because i had i share in one that got bent
I know because i had i share in one that got bent
Joined: Jan 2006
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From: Oz
Mr S
That's why I'm asking the questions - to learn from those such as yourselves. Just trying to get a big picture before ploughing in...
Cyclic Flare
I believe Hull value is calculated on the New Price - a certain rate per hour flown. Is that right? Do recall the formula? Did you buy another one?!
That's why I'm asking the questions - to learn from those such as yourselves. Just trying to get a big picture before ploughing in...
Cyclic Flare
I believe Hull value is calculated on the New Price - a certain rate per hour flown. Is that right? Do recall the formula? Did you buy another one?!
Joined: Jan 2006
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From: Oz
Originally Posted by Mr Selfish
I4iq
Yes premiums should go down as “life” is used up.
The biggest trick in helicopter ownership is financial management and reserve/backup.
If you are putting a suitable sum away from hour one you should be in a position to contribute to a repair or overhaul the machine when required.
The reserve refers to the ability to pay the excess and contribute (a little) if something bad happens early on.
Yes premiums should go down as “life” is used up.
The biggest trick in helicopter ownership is financial management and reserve/backup.
If you are putting a suitable sum away from hour one you should be in a position to contribute to a repair or overhaul the machine when required.
The reserve refers to the ability to pay the excess and contribute (a little) if something bad happens early on.
Joined: Feb 2002
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From: england
Depending whats on it about £114k plus vat thats on an exchange rate of $1.80 to the pound
£105k for a newly overhauled one.
If you are overhauling beware of a 4000 hour machine this will need a new boom $11000.00 extra.
£105k for a newly overhauled one.
If you are overhauling beware of a 4000 hour machine this will need a new boom $11000.00 extra.
Joined: Aug 2000
Posts: 700
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From: 5 nM S of TNT, UK
When you take out the insurance on a used one you agree the hull value with the insurer. As the machine ages, the hull value indeed does go down, so if you agree a new hull value each year then your hull premium element should indeed fall. However, in the UK at least, there are break points in value where the percentage premium rate charged falls as the hull value increases. So you may well find that a lower agreed hull value is charged at a higher % rate so the premium is actually greater.
The biggest risk in doing what you are proposing is that training ships do get bashed about with repeated EOLs etc. Hence the maintenance costs may well be a lot higher than you are budgeting for. remember, you can't claim for everything that might happen on insurance.
The biggest risk in doing what you are proposing is that training ships do get bashed about with repeated EOLs etc. Hence the maintenance costs may well be a lot higher than you are budgeting for. remember, you can't claim for everything that might happen on insurance.
Joined: Oct 2005
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From: hampshire