Your engine is the single most valuable part of your aircraft in more ways than one. For appraisal purposes, average engine time is considered to be 45% of the recommended TBO. Added value is awarded for lower time, and deductions made for higher time. Additional value is added for new, factory overhauled and remanufactured engines, and for those engines overhauled by nationally recognized facilities (Penn Yan, Piedmont, Mattituck, etc.).

"Runs great, compression's good, uses no oil..."

There are, however, other factors to be considered when examining engine time and value. For practical purposes, an engine approaching TBO is considered to be "runout" by most buyers. (No matter how enthusiastic the seller, he is probably the last person to buy an aircraft with similar engine time!) There is nothing wrong with buying an aircraft with a "runout" engine, as long as it is appropriately priced. In fact, some people prefer to do it this way in order to start with an engine that they, and they alone, have operated.

At the other end of the engine spectrum are those units that are "0 SMOH." The question to ask here is "By whom?" An overhaul by a shop with a good reputation is your best (and only) guarantee against future problems and will make your aircraft easier to resell. Find out what the warranty is, and whether it is transferable to a new owner.

You may also find an engine that has been overhauled by an individual mechanic or a small, unknown shop. While this in itself should not be grounds for refusing the aircraft (especially if everything else meets your requirements), you should pay special attention to its examination during the pre-purchase inspection. Find out if the engine was overhauled to "new" or "serviceable" specs. (Some "field" overhauls can be better than the big shops.) If you go with such an engine, you may wish to choose one that has a few hundred hours on it, and have your mechanic scrutinize it and the appropriate logbook entry. Any time an engine has been overhauled prematurely, look in the airframe log during the same time period for any major repairs that could indicate a hidden damage history.

If the aircraft you're examining has a "first-run" engine that has never been overhauled, beware! All engines deteriorate when they're not operated on a regular basis- in fact both Lycoming and Continental consider their engines need an overhaul every 12 years, whether they've been run or not! That 1400 hour Skyhawk may not be such a bargain when it needs a major overhaul 100 hours later!

Here's where our Skyhawk loses serious value. It's listed at 1,652 SFOH- (the "SFOH" stands for "Since Factory OverHaul"). If we buy this aircraft and fly it 50 hours per year, in 3-4 years it will be close enough to TBO to be considered runout by the next buyer. We will have to invest the money to overhaul it, or sell it as is for a lower price.

Entering the engine time into our Appraisal Software tells us it's at 83% of TBO, and computes a deduction of -$4,665.

This figure includes both an hourly correction from mid-time as well as premium for the remanufacture history.