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. " />
Ready, Set, Buy!
Unlike high school, successfully buying an undervalued airplane—or any airplane for that matter—requires that you do all your homework.
“The first thing you need is a good market appraisal,” says Jacobson. “It’s a realistic value inspection. You need to know what the history of the airplane is: use, damage, modifications, etc. Believe it or not, some sellers will misrepresent the actual condition of their airplane, even when they’ve ‘undervalued’ it—hidden damage, incorrect or incomplete logs, improper modifications, things that would have been uncovered with a good pre-purchase inspection.”
A big part of that pre-purchase process is a thorough technical evaluation. “A good technical inspection is just like a home inspection,” explains Matt Thurber, A&P/AI and editor of Aviation Maintenance magazine. “You’ll not only find out what is mechanically wrong with the aircraft, but also what it may cost to fix it. The important thing is to really determine the airworthiness of the airplane. That’s where you’re going to spend the really big bucks making it right. If you find that an airplane has had a cylinder removed at every annual for the past five years, chances are it’s a problem that isn’t going away. It’s only going to cost more money in the future, and that money has to be added to the price to determine the real value.”
That real market value will have a lot to do with getting the right financing. “If you’re lucky enough to find an airplane that has a higher market value than what you’re paying for it, you can use the equity to pay for improvements you want to do,” explains Blais. “You can end up with an airplane that’s better than others on the market at a price that was below everything else. It’s a real win for the consumer.”
…Happily Ever After
If your thoughts of finding your undervalued gem are getting a bit bleak, take heart. There are deals out there.
“A few years ago, we found an Archer that had been sitting unused in the desert for about eight years,” says Jacobson. “It was part of an estate sale. It only had 1,100 hours on it and we got it at a great price. We did a thorough annual, including an inspection of the engine, which surprisingly didn’t need any real work. We replaced the interior and glass, and painted it. In the end, we had a pretty nice airplane at a very nice price—way below what the market was asking. You don’t find many deals like this, but when you do, it really works out well.”
Page 4 of 4