AOPA VREF

Mahneuvers

Mahneuvers

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Mahneuvers
What's everyone think about AOPA VREF? I've heard it lags the market by a substantial period which makes using it for an immediate purchase suspect.
 
At one time, VREF hopelessly overpriced small aircraft (that may have changed with the covid panic pricing).
 
Bob Noel said:
At one time, VREF hopelessly overpriced small aircraft (that may have changed with the covid panic pricing).
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Hey Bob, prior to COVID, would you say the VREF info was actionable in you were relying on it for an imminent purchase?
 
So this is the reason I'm asking. I've never purchased a plane. I feel intimidated to the point that maybe I just shouldn't be an owner. My wife will tell you I descend into analysis paralysis when buying a toaster and she would be correct. I've been watching 182 adds on TAP for a year. There's a huge difference in asking prices for same model, same year air frames. Why? Engine run out is easy. Avionics, not so easy. General condition, also not so easy. AD's, not so easy to surface and quantify. I struggle to identify the planes worth pursuing. I thought VREF might be my savior. I'm now thinking not.
 
V ref is only a guide to assist you in your search.
 
frfly172 said:
V ref is only a guide to assist you in your search.
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Right. My question regards how accurate a guide it truly is. Maybe it's close...maybe it's not.
 
One technique for pricing is to list all the advertised asking prices for the make and model of the plane you are seeking, then eliminate the highest and lowest prices and average the rest. Then start to account for the variables such as equipment, engine hours, etc. to see if the plane you are looking at is close to the result of your calculations. Not easy, but a jumping-off point.

Also consider the cost of traveling to inspect an airplane that is what you want, but far away. One local pilot spent $4,000 plus on travel only to find airplanes that were not what he expected from the ads. I was fortunate. All three of the airplanes I bought were local.
 
Mahneuvers said:
So this is the reason I'm asking. I've never purchased a plane. I feel intimidated to the point that maybe I just shouldn't be an owner.
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Do what the rest of us do; identify the perfect plane, scrutinizing every minute detail, have a detailed prebuy performed by the best in that type…..then after buying, plan on an $18,000 annual or an engine o/h in the first year (almost lol, but not)
 
Say you overpay by 10% - 20%, who cares? It's not a contest to get the best deal. Find a plane that fits your mission and keep it. If you're happy with the deal, then that's what matters.

My observation is that people get financially hurt when they only keep a plane for a few years to move on to something "better"

I do think VREF is a good starting place based on my observations.
 
Walboy said:
Say you overpay by 10% - 20%, who cares? It's not a contest to get the best deal. Find a plane that fits your mission and keep it. If you're happy with the deal, then that's what matters.

My observation is that people get financially hurt when they only keep a plane for a few years to move on to something "better"

I do think VREF is a good starting place based on my observations.
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When you are ready to over pay $35,000 -$50,000 on a hp/complex plane let me know. The era of cheap money and bonus depreciation is over.
 
The point is, the purchase price is a small part of the cost of ownership. So overpaying a bit is a small blip in the overall life cost.

I would VREF a few planes you are interested in and see how the asking price compares.

One thing that I think is not accurate is they use a straight line depreciation in value of avionics. So new is worth 100%, and 5 years old is 50% and 10 years is 10% value. When normally, reasonably modern avionics are worth about 50% of the installed cost.
 
Mahneuvers said:
Hey Bob, prior to COVID, would you say the VREF info was actionable in you were relying on it for an imminent purchase?
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I always thought of VREF being at least 20% too high, even more when adding in newer avionics
 
IIRC, Vref is based on listing pice, not actual sale price. Years ago those may have been substantially different, but now most older planes are selling at or near the asking price. Maybe Vref is a tad more accurate now?

In any case, these older aircraft are essentially snowflakes, with no two exactly alike. Differences in equipment, maintenance, engine life, cosmetics, etc., are all over the map. This makes price guides of limited utility. Sure, you might establish an average price, but the standard deviation will be so large as to make the average unimportant.

My advice? Establish your purchase budget. Divide that number by 2. Search only for planes at or below that lower number, holding the rest in reserve to correct whatever flaws you discover in your purchase.
 
Half Fast said:
IIRC, Vref is based on listing pice, not actual sale price. Years ago those may have been substantially different, but now most older planes are selling at or near the asking price. Maybe Vref is a tad more accurate now?

In any case, these older aircraft are essentially snowflakes, with no two exactly alike. Differences in equipment, maintenance, engine life, cosmetics, etc., are all over the map. This makes price guides of limited utility. Sure, you might establish an average price, but the standard deviation will be so large as to make the average unimportant.

My advice? Establish your purchase budget. Divide that number by 2. Search only for planes at or below that lower number, holding the rest in reserve to correct whatever flaws you discover in your purchase.
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I would take exception to a divisor of 2. But I would have some resources available for the unplanned/unexpected. An engine overhaul being a worst case. But, if there is a good prebuy and history with oil samples that would lessen the likelihood.
 
Bob Noel said:
I always thought of VREF being at least 20% too high, even more when adding in newer avionics
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A friend who is an independent aviation insurance broker said that right now (and ever since COVID), VREF is ridiculously too low. Like 30%-50% or more! He said some insurance underwriters are refusing to insure for anything over VREF, which ends up sometimes being 50% less than purchase price.
 
Country Flier said:
A friend who is an independent aviation insurance broker said that right now (and ever since COVID), VREF is ridiculously too low. Like 30%-50% or more! He said some insurance underwriters are refusing to insure for anything over VREF, which ends up sometimes being 50% less than purchase price.
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This is not uncommon in the aviation insurance business. Owners can and do put too much money in avionics their planes and the insurance companies apply a maximum for a make a model.
 
Maybe Vref and the insurance companies are right and people need to stop overpaying by 30-50% lol. I have no idea about Vref, never seen or used it. I would say any automated pricing tool is useless for aircraft evaluation. For something as common as a 182 there are plenty of comparables for sale. Decide what you want and what you can live without to narrow your selection down. If the market is higher than you feel comfortable paying, no harm in backing out. Where I really feel sorry for the average buyer is lack of knowledge on the AD compliance and other paperwork/condition issues. The last 2-3 airplanes I've looked at had very poor maintenance practices/records. Anything from conflicting AD compliance reports, to inspection panels in a fabric airplane that have never been cut out to properly inspect sections of the wing. One had no records of ever having a compression test done. It's the wild west out there, good luck!
 
Grum.Man said:
Maybe Vref and the insurance companies are right and people need to stop overpaying by 30-50% lol.
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Aircraft insurance policies are written on an agreed value basis - not an actual cash value. In theory you should be able to insure your aircraft for whatever you paid for it - even if you paid too much. The only problem comes when the market value drops and your aircraft become over-insured.
Mahneuvers said:
What's everyone think about AOPA VREF? I've heard it lags the market by a substantial period which makes using it for an immediate purchase suspect.
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VRef historically has been higher than the Aircraft Bluebook value. Bluebook is based on reported priced paid - not list price - so should be closer to reality. But it too lags behind current values when they change rapidly. You need to assess what the market is doing and understand WHY values are what they are. Right now values are elevated due to increased demand. When the "pilot shortage" ends and flight schools dump their aircraft back onto the sales market values of single engine piston aircraft will come crashing down.
 
Mahneuvers said:
So this is the reason I'm asking. I've never purchased a plane. I feel intimidated to the point that maybe I just shouldn't be an owner. My wife will tell you I descend into analysis paralysis when buying a toaster and she would be correct. I've been watching 182 adds on TAP for a year. There's a huge difference in asking prices for same model, same year air frames. Why? Engine run out is easy. Avionics, not so easy. General condition, also not so easy. AD's, not so easy to surface and quantify. I struggle to identify the planes worth pursuing. I thought VREF might be my savior. I'm now thinking not.
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Sounds like you need to hire a good broker if you’re going to buy some.
 
I'm thinking if one waits 10-15 years....when all the boomers stop flying....there should be lots of good aircraft available ...cheap. ;)
 
Don't mean to jump on this thread but I have kind of the same question. Prices for what appears to be very similar aircraft can be all over the place, sometimes double. I am looking at 172's or PA 28 for a time builder. If a plane passes annual, how is it possible to need 18k in repairs the following year? Aren't annuals under some sort of regulation on wear limits/rules/time on what is considered airworthy or not?
 
fast99 said:
Don't mean to jump on this thread but I have kind of the same question. Prices for what appears to be very similar aircraft can be all over the place, sometimes double. I am looking at 172's or PA 28 for a time builder. If a plane passes annual, how is it possible to need 18k in repairs the following year? Aren't annuals under some sort of regulation on wear limits/rules/time on what is considered airworthy or not?
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Annuals can be anything from just some words written in a log book to actual thorough inspections held to the letter of the law. Then you have things you can't predict/inspect like old engines, sudden hydraulic leaks, avionics failures, etc...

Edit to add: first time annuals will and should always be more expensive. Why, the new mechanic should spend time researching AD notes and ensuring their compliance. They are now assuming responsibility in a way for all previous work. They will also be more likely to scrutinize little things since the plane and customer are new to them to ensure their responsibility of the plane starts off as clean sheet as possible.
 
Agree that the difference in prices for the low end isn’t that much and soon is swallowed up by hangar rent, annuals and maintenance. Purchase price is just the admission ticket to other expenses and in the long run isn’t as great a factor as one thinks.
 
Mahneuvers said:
Good is the operative word. I've received some negative broker feedback that makes me hesitant but it might be right for me.
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You've got that right...I believe a bad broker is worse than no broker at all. Check references.
 
“I'm thinking if one waits 10-15 years....when all the boomers stop flying....there should be lots of good aircraft available ...cheap”

The same thing was said about the WW2 generation passing. Or the prediction of numerous pilot shortages over the years that were imagined and didn’t happen until COVID changed the table for a while here. Aviation predictions are usually trying to prop up an faction of the industry.
 
skyking3286 said:
“I'm thinking if one waits 10-15 years....when all the boomers stop flying....there should be lots of good aircraft available ...cheap”

The same thing was said about the WW2 generation passing. Or the prediction of numerous pilot shortages over the years that were imagined and didn’t happen until COVID changed the table for a while here. Aviation predictions are usually trying to prop up an faction of the industry.
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It was a joke....King....a joke. ;)
 
fast99 said:
Don't mean to jump on this thread but I have kind of the same question. Prices for what appears to be very similar aircraft can be all over the place, sometimes double. I am looking at 172's or PA 28 for a time builder. If a plane passes annual, how is it possible to need 18k in repairs the following year? Aren't annuals under some sort of regulation on wear limits/rules/time on what is considered airworthy or not?
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This is why you want to have a good shop, that knows that type of aircraft, do a pre-purchase inspection.

And NOT the shop that is currently maintaining it.

And yes, prices are all over, so that is why you start comparing and deciding what are the Go and No Go parameters for YOU. And start removing those with No Go issues from the list. Eventually you will find a couple of planes that are Go and within your price range and you can make an offer, contingent on a pre-buy.

And if you over pay a bit, that is a small part of the cost of ownership. Unless you are tying to flip the airplane, in a few years it will be worth as much of more than you paid for it, IF you maintain it.
 
Post Covid, August 2021, the 172 and 182 were very overpriced. Even a new 182 was $610k...

So I bought a new plane:

www.pilotsofamerica.com

Ordered new Tecnam P2010

I've done my research and decided the Tecnam P2010 with IO390 215 HP engine is for me and my flight missions. Dave Copeland from Tecnam US and Mark from Delta Aviation are great. I spoke to other Tecnam dealers and settled on Delta Aviation because Mark is more local to me than the others and...
www.pilotsofamerica.com www.pilotsofamerica.com

I plan to hand it down in 8-10 years
 
Got my license in 2003. I have never found Vref valuations anything but crack smoke. You need to put in the work and watch a type's market for a few months to get a feel for correct pricing. In that time, you'll want to drink in the type forum wisdom, learn the problem areas and why owners buy and sell.

It's aviation. Tons of smart people do this. You can't beat them by just logging into a website.

$0.02
 
skyking3286 said:
“I'm thinking if one waits 10-15 years....when all the boomers stop flying....there should be lots of good aircraft available ...cheap”

The same thing was said about the WW2 generation passing. Or the prediction of numerous pilot shortages over the years that were imagined and didn’t happen until COVID changed the table for a while here. Aviation predictions are usually trying to prop up a faction of the industry.
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The population has doubled since the big ga push 50 years ago. Doubled!

It’s certainly possible that no one with money hungers for a 60 year old plane next year or five years from now but I think the odds are better than commonly asserted here
 
fast99 said:
Don't mean to jump on this thread but I have kind of the same question. Prices for what appears to be very similar aircraft can be all over the place, sometimes double. I am looking at 172's or PA 28 for a time builder. If a plane passes annual, how is it possible to need 18k in repairs the following year? Aren't annuals under some sort of regulation on wear limits/rules/time on what is considered airworthy or not?
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Last year’s AP thought the exhaust was fine. This year it needs to be replaced…so that’s a 2k annual with a 10k? repair/replacement. I’m sure there’s a million examples.
 
fast99 said:
Don't mean to jump on this thread but I have kind of the same question. Prices for what appears to be very similar aircraft can be all over the place, sometimes double. I am looking at 172's or PA 28 for a time builder. If a plane passes annual, how is it possible to need 18k in repairs the following year? Aren't annuals under some sort of regulation on wear limits/rules/time on what is considered airworthy or not?
Click to expand...
I look at the annual as an inspection of the plane and its log books to make sure there is not anything that makes the plane a mistake to buy. It is sort of like a house inspection when you buy a house. It is not a guarantee that the plane is in perfect condition or that nothing will go wrong. It may give you some idea of needed expenses but by no means is all inclusive. Unfortunately, often the little things that are difficult or impossible to find are the things that will cost you in the future when they become apparent.
 
Seems like folks here advocate overpaying? I'm gonna sell my plane here when the time comes...

On VREF and ownership: As a new student I felt overwhelmed with the knowledge firehose. For buying, it was as if I was the new guy at the poker table, ie the sucker. VREF offered me a framework to gauge price/value in an objective manner. It took the emotion laden ads and boiled them down to facts. Updated avionics (Garmin 430??? really), perfect time builder, no expense spared, all those kinds of comments. After buying a 172 , and moving quickly on it due to asking price vs VREF, I sought out a 182. Wiser, many seemed like they were FOS ads, dealers, owners. Should I trust a mechanic that changed 58/80 cylinder on Continental and still had 58/80 on the new one? When shopping I'd often ask owners/brokers to justify the price relative to VREF, not in a manner that I was nickel and diming them, but just to give my mind some footing for paying more, nobody really helped with that, so no 182 was purchased.

VREF also helped with valuing my own upgrades.

Why are new owner annuals expensive?
-Cause I am a sucker at the poker table.
-cause I do not know anything much
-cause the plane had neglect or areas that were not focused on
-cause I wanted to fly my first officer safely with peace of mind
-because I was not aware of reliability centered maintenance https://resources.savvyaviation.com..._2010-01_reliability-centered-maintenance.pdf
-because my prebuy was 3-4 hours of work at most and only looked at major issues.
 
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Not bad for 54 years of service....no reason it can't go another 30.


Randomskylane said:
The population has doubled since the big ga push 50 years ago. Doubled!

It’s certainly possible that no one with money hungers for a 60 year old plane next year or five years from now but I think the odds are better than commonly asserted here
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;)
 

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