AIRCRAFT
OWNERSHIP

Aircraft Buying: Advice from
the Experts

Aircraft
Partnerships

Do-It-Yourself
Preventative
Maintenance

by Paul Bertorelli
Editor, The Aviation Consumer

Timing Counts

With investment value in mind, when’s the best time to buy? Should you buy a satisfactory airframe with a run-out engine and do the overhaul yourself? Or find one with a 100 hour engine and let the seller take the hit?

Actually, there’s a slight advantage to buying the runout and majoring it yourself, but it’s a very close thing. Runout engines tend to depress the airframe value below true market value while an engine with fewer than 100 hours tends to inflate it slightly above average.

At 200 or 300 hours, the advantage of that freshly overhauled engine begins to evaporate. If you buy and overhaul and the cost balloons even slightly, however, or you add on some extras such as new hoses, you’ll have more invested in the airplane after the overhaul than it’s worth, but not much more.

But let’s say you buy an airplane with a 600 hour engine that crumps in 50 hours. Now you’ll take a hit from both directions. You paid a slight premium for that engine but the airframe instantly drops to the runout engine value. By the time you replace the engine, you’ll have substantially more invested in the airplane than it’s worth.

In that sense, buying an engine that’s past mid-time actually makes sense because as the engine value declines, so does the airplane’s overall value. If you make it to or past TBO, you come out ahead.

Here’s the math: A 1978 Mooney 201 with average time and equipment but a zero time engine is worth $73,433, according to Aeroprice. (Bluebook has it at $77,000.) With the same equipment but a runout engine, the value drops to $59,000 and the difference between the two values is more than the cost of overhauling the engine, with an economy overhaul, at least.

If you bought in at 600 hours—airframe value about $69,000 at that point—and the engine lunched right away, say goodbye to $9000 in value. You’ll have to spend another $13,000 to zero the engine at which point the airplane will be worth $73,000, versus $82,000 invested, thus accounting for the $9000 delta. Had you bought a 1400 hour engine that blew up right away, you’d have gotten the airplane for $62,000. After you paid for the overhaul, you’d have $75,000 invested in an airplane worth about $73,000. You’d still be in the red but by a lot less

Some buyers—and dealers—take advantage of this when selling a ratty airframe with a fresh engine. It may make more sense to sell that good engine or trade it out for a serviceable runout and some cash. The corollary: The cheapest way to re-engine may not be an economy overhaul but a good used engine, which might deliver 75 percent of the service for 50 percent of the price.