Plane & Pilot
Saturday, May 1, 2004

Secrets For Buying Undervalued Aircraft

Whether you equate it to the search for the Holy Grail or a textbook example of caveat emptor, with a little perseverance and luck, you can still find a great deal on the airplane of your dreams—if you know where to look

Whether the stories are real or just urban legends, sooner or later, every hangar-talk session turns to a tale of someone finding that cherry-red Bonanza sitting in a barn in the middle of nowhere and the farmer selling it for $5,000. While stories like this are much more fiction than fact, a question remains: How can you find that undervalued gem that will ensure your place in aircraft buyer’s lore? Unfortunately, it’s not as easy as it used to be. " />

Just to keep things from seeming too clear, he adds that there is another category of good and bad undervalued airplanes. “I define these good ones as ones that you can buy for a price below what you would pay for the similar performance from a more popular model,” he says. “These are usually particular models to which the market just doesn’t pay much attention.” You could probably buy one of these, fly it happily for a few years and resell it for pretty close to what you have in it.

“On the other hand are the bad undervalues,” continues Thomas. “These are airplanes that, due to high maintenance, insurance or operating costs, the market has undervalued way below competitive models’ costs. Some are still good airplanes, but you need deep pockets to afford to fly them.” Buy one of these and chances are you’ll be digging a financial hole you’ll never be able to fly yourself out of.

The key to being able to spot the proverbial diamond in the rough is knowing exactly why a particular airplane is undervalued. Is it situational or mechanical?

Uncovering The Undervalued

Now that we know what to look for and look out for, it’s time to find the best places in which to look. A good idea is to start where other sharp-eyed buyers may not be looking, like estate sales and banks. If the aircraft is part of an estate, often the surviving family members don’t know the airplane’s value and may not be interested in doing the homework to determine the current market value. There is no harm done in alerting banks and members of the legal community that you’re in the market to buy a plane. If you’re in the right place at the right time and you make them a good offer, you score a win.

We’ve all heard about the pennies-on-the-dollar deals you can get at those seized property auctions that the U.S. government holds. Today, that’s the exception and not the rule.

“We tend to get fair market value for the aircraft we auction off,” explains Britney Sheehan, a representative of the company that handles auctions for the U.S. Treasury and other departments. “We get an appraisal of the airplane before it’s auctioned, so we know what the value is. Most of the aircraft have no logbooks, have run-out engines and props, and need a lot of work. But every once in a while, there is a great deal in there.”


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