Buying an aircraft can be exciting, but daunting at the same time. For the private buyer, it generally represents a significant investment which is why it should not be taken lightly.
Moreover, buying a used aircraft adds challenges to the purchase process since the buyer will need to make sure that everything is running well, and that the used aircraft is worth the amount of money the seller is asking.
Now, the question is, how can I verify that the aircraft is in good condition and a good deal for my money? If you are wondering, we invite you to keep reading to discover what it takes.
It is true that buying a used aircraft is a good way to start your journey in the world of aviation. Used airplanes usually have a low price tag compared to new ones, but there is more beyond the initial price of an airplane that must be considered, financially speaking.
While setting up your budget, you must account for many sources of costs that will add up to your initial purchase. Let’s see some of the most relevant ones.
The first component of the fixed costs you need to consider for your budget is actually the price you are willing to pay for the aircraft. Most sellers will start with a high price, so it is likely that you will be able to bargain a bit to reach the price you set in your budget.
There are different factors that account for determining the real value of the used aircraft, and you can use them while determining the price you are willing to pay and negotiate with the seller. The Aircraft Owners and Pilots Association (AOPA) describes these factors as follows.
Perhaps the most common influence on resale value. The closer an engine is to its recommended time between overhaul (TBO), the less its value. Equally important is a record of consistent use coupled with a good maintenance program. Regular use helps keep seals and other engine components lubricated and in good shape.
This includes equipment such as avionics, air conditioning, deicing gear, and interior equipment. The big item here is usually avionics which can easily double the value of some older aircraft. Also, older equipment is generally more expensive to maintain.
ADs are issued by the FAA for safety reasons and are a fact of life for almost every aircraft. Once issued, owners are required to comply with the AD within the time period allotted. It’s important to look at the airworthiness history of an aircraft. Check the nature of the ADs and whether they are recurring or one-time compliance. Make sure the aircraft logbooks show compliance with all applicable ADs. You can search for ADs on the FAA website using aircraft records and aircraft title search features, or you can have a list prepared by Aircraft Title and Escrow Service.
Major repairs can affect the value of an aircraft significantly but may be hard to pin down. A damage history will decrease the value of an aircraft, depending on the type of accident, nature of the damage, and the degree to which major components have been involved. Any aircraft with a damage history should be closely scrutinized to make sure it has been properly repaired in accordance with the applicable FAA regulations and recommended practices.
Used on occasion to give “tired” aircraft a quick facelift. Check new paint jobs carefully for evidence of corrosion under the surface. Interior items should be checked for proper fit and condition. Done properly, both items enhance the value of the aircraft.
Now, if you are not an expert, you may be wondering how could you actually verify all the above to have a better idea of the real value of the aircraft. Well, if you do not have a mechanic that is friendly enough to do it for free, then you can add the extra fixed cost of a pre-purchase inspection.
A comprehensive inspection before completing the purchase will help you make sure you are actually paying what the used airplane is worth. Upon completion, the mechanic will provide you with a written report where the actual condition of the airplane will be thoroughly described.
The minimum that should be inspected includes a differential compression check on each cylinder of the engine, a critical aspect to determine the remaining life of the machine. Beyond the mechanical inspection, and keeping the aspects described above in mind, the aircraft logbooks and other records should also be carefully reviewed.
Things as FAA Form 337 (Report of Major Repair or Alteration), AD compliance, the status of service bulletins and letters, and aircraft/component serial numbers should be inspected. For example, the logbooks should show maintenance history, where things like a major overhaul should be described since it involves the complete disassembly, inspection, repair, and reassembly of components to specified limits.
Ideally, the mechanic you select to do the inspection should have experience and be familiar with the problems that may be encountered on the type of aircraft you are about to purchase.
Last but not least, it makes sense to go on a test flight before the purchase. This will give the buyer a hands-on experience of what the used aircraft will offer. During the flight, it will be easier to verify that all instruments, systems, and equipment are fully operational.
Many buyers only focus on the fixed costs described above which are usually paid upfront and do not add the operating costs to their valuation factors.
However, you should also consider operating costs since they vary from one airplane to another and could be a critical aspect of making the buying decision. You do not want to buy a used aircraft type that will force you to ground it because it generates costs of operation that you cannot afford.
Also, many believe that the airplane fuel price is what matters the most here, but the real cost of ownership is determined by all the factors that go into owning an airplane, not just fuel.
Other relevant factors that must be included in these costs include:
Based on Cessna 172 Skyhawk or similar, we can illustrate with a quick example:
Generally speaking, the average costs of operation for a used plane like this range between $100 and $200 per hour.
There are no more days in which you can shake hands or send checks. The amount of money involved in the operation should be negotiated in writing. Even though it is desirable, it is not mandatory for an attorney or an aircraft broker to prepare a sales contract.
The sales contract describes the agreements reached in a potential transaction. It also lists any warranty or promise made by the seller. Also, it is important to ensure there is a clear list of conditional clauses in the sale agreement. This section outlines your obligation to comply with entering into a binding contract.
Another important legal aspect during the purchase is the registration of the aircraft. This is the responsibility of the purchaser, and when the aircraft is already registered, a transfer of the registration documentation must take place. When registration takes place in the United States, under the FAA jurisdiction, it is important to have the seller execute a Bill of Sale to execute an Aircraft Registration Application and submit it along with the Bill of Sale and a $5 recording fee, to the FAA.
Finally, when closing the deal, AOPA recommends that you not allow other parties to the transaction to submit ownership documents affecting your interest in the aircraft.
We know buying used airplanes can be a tricky thing to do. Even with all the details we have shared in this guide, there may still be some questions in your mind. Therefore, we are going to share some of the most frequently asked questions when it comes to buying a used aircraft with you.
It all comes down to the interpretation of the term old plane. A plane can be called old because it was manufactured many years ago. Yet, if properly maintained and overhauled when needed, flying on it might be as safe as flying on any aircraft coming out of the factory. Now, if the term refers to a plane left unattended for many years, then buying it may not be a good idea since it will require a lot of money to take it back to flying form.
The price of single-engine aircraft, depending on the models and conditions, will vary from $1500 to $100,000. Two-engine planes can cost between $70,000 and $350,000.
Cessna continues to dominate this market. However, the likes of the Piper PA28 Cherokees are also a good alternative. If you have trained on low-wing aircraft, you should consider the Cherokee 140, Cherokee 180 Warrior Archer, Dakota, and Dakota. Those usually offer great value for the money you pay.
Clearly, buying a used airplane instead of a new plane is a good idea for those trying to find the perfect plane to start their journey into the aviation world. It only takes doing due diligence to find the most cost-effective plane and ensure a safe purchase. Also, finding the most suitable insurance company and financing should make the experience a very rewarding one, so these aspects should be at the top of the priority list.
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