April 21, 2014 at 11:01 pm #85015
I’m sure the answer to this question is going to be “it depends” but a more specific answer would be greatly appreciated.
How does one assign a value to avionics/upgrades? For example, if a Twin Cessna has a Garmin 530W how much incremental value is assigned? 50%? 30%? 100%
What about a RAM upgrade? Vref states to depreciate it at 3% per year PLUS the hourly TBO rate. But that doesn’t necessarily make sense as you’ll hit zero before the TBO. Do RAM upgrades really have no intrinsic value besides the time remaining on the engine?
Thanks in advance.
MarissaApril 21, 2014 at 11:29 pm #104714
I would say that value wise avionics take about a 40% hit in the first year. Thats not a hard and fast rule because it depends on the airplane and whether it is expected to have that type of equipment.
If you want a quick estimate of the value hop over to trade a plane and use our Appraisal Association evaluator. I may be partial but in my opinion it is the best of all the price evaluator on the internet.
The way we work the RAM conversions is to remove the value of the engines and then prorate a RAM overhaul.
On a side note I will most likely be offering discounted appraisals this year at the convention.April 22, 2014 at 12:37 am #104715quote DMOORE1:
I’m not quite sure what you mean by that? Are you saying that the value of a RAM conversion is the prorated difference between a standard o/h and a RAM conversion?
If a standard o/h is 110k and a ram 7 conversion is 160k and you have exactly mid-time engines then the value of the RAM is 25k?
Thanks!April 22, 2014 at 1:55 am #104720quote mchien1:
I’d start with 50%, Marissa. The “Blue Book” gives more definitive guidance. Something like 30% after 9 years, IIRC. Best get hold of a Blue Book! My FBO has the latest, but I have to buy lunch 🙂 That’s for avionics. My RAM 1 just made it easier to sell (GW increase), with run-out engines.April 22, 2014 at 2:42 am #104723
This may be a bit unrelated. I have a 1975 BE36 and am interested in moving up to a Cessna 421C. Obviously there are a lot of variables, to get some idea of comparative value which online pricing guide do you recommend – Vref or Blue Book? I’m willing to pony up for the annual subscription – just wondering which is preferred for older piston planes.April 22, 2014 at 11:32 am #104733
When we appraise an aircraft we normally have a dollar per hour figure that an engine is computed at say $28 or so. When we appraise a RAM converted aircraft we take the cost of the RAM overhaul which is higher than a standard overhaul and prorate it on an hourly rate. It ends up being several dollars per hour higher than a standard overhaul. Of course an appraisal is an opinion so different appraisers may alter their numbers based on how they think they should value the numbers. On a 421 I think the RAM engines really are any more valuable than a TCM reman, but on others 340/414 for instance the increase in horsepower and better turbos and intercoolers does add to the value.
The problem with Vref/Bluebook and the NAAA evaluator is the fact that you may be evaluating an airplane simply by some numbers on a paper. We DO NOT perform appraisals on aircraft we have not seen. There are a lot of intangibles which can not be judged from half way across the country which should only be taken into consideration once the aircraft has been seen. ABB does not have a way of computing the effects of damage, Vref has allowance for it, but it very subjective (when I talk about Vref I am referring to the full subscription not the AOPA freebie).
The NAAA evaluator on Trade A Plane is the best of the available options plus its free with your Trade A Plane subscription which makes it less expensive than the others.
As appraisers we don’t view glass panels quite the same as other avionics since this is partly instrumentation partly avionics (ie I won’t depreciate the value the same as panel mounted avionics).April 22, 2014 at 2:44 pm #104742
Dan, thanks for the insights.
I would agree with Dan that appraising airplanes or anything for that matter is more of an art form than a science and you’ll definitely get different opinions from different appraisers. Having said that, I just wanted to get a feel for some of the questions that I had.
My next question is why do people put in massive upgrades (like a G600, digital AP, etc) just to turn around and sell it? In theory, you wouldn’t get back what you put into it.April 22, 2014 at 3:09 pm #104743quote mchien1:
It seems to me it’s usually because people are making a last ditch effort to like their plane before realizing it’s not for them.April 22, 2014 at 4:22 pm #104746
The rational that improvements to our airplanes will ever return us even 50% of the cost of the equipment plus installation simply flies in the face of nearly every aspect of owning an airplane… or a boat… or… some would say having a spouse 😉
I upgrade my airplanes because I enjoy the process, the education, and the satisfaction. I know I’ll never see 50% of the $ I dump into avionics upgrades, including the install, but… if I can do a lot of the work myself, grow my skills and knowledge, grow my tool collection, have fun, build relationships, and have a better understanding of my airplane, I consider it money well spent. It has to be a labor of love.
When buying an airplane, I check prices for used avionics. I’ll value installed and functional avionics no higher than the used uninstalled market with the caveat being the more unique, out of favor, or aged equipment gets an additional haircut. And that’s generally how I appraise my own airplane.April 22, 2014 at 5:55 pm #104754quote mchien1:
So its ready for a nice buyer like you! Thats the ones to buy the ones that have everything done!April 22, 2014 at 10:52 pm #104760
Jim – I assume you were referring to the 3 F’s rule – if it f*cks, flies or floats, then you should rent instead of buy? 😉
MarissaApril 22, 2014 at 11:16 pm #104761
Spoken like you might just be from Vegas! 🙂April 23, 2014 at 12:33 am #104762quote mchien1:
The version I always heard was it’s cheaper to rent. But owning has advantages, such as exclusivity. At least with planes. 😉April 23, 2014 at 5:49 am #104764quote TDUPUIS:
Spoken like you’re from somewhere that shares boats?April 23, 2014 at 1:22 pm #104769quote mchien1:
To be competitive with everyone else selling their airplane who already upgraded. You can’t discount the price of the airframe enough on some of these unimproved planes to justify any price.
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