Plane prices; The sky is falling.....

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docmirror

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I just had a sad journey though ebay single engine planes for sale. It was disheartening. There's a beautiful '56 Bonanza on there for less than $30k, BIN for $38k. A nice clean Navion bidding $15k now, and not much action.

If you are in the market for a plane, or know a couple of guys that are, now or very soon is the time to strike. I didn't even look at the twin engine section. Too depressing.
 
docmirror said:
If you are in the market for a plane, or know a couple of guys that are, now or very soon is the time to strike.
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I don't believe that there's going to be any upturn in the next few years, and expect used plane prices will continue on down. There are a lot of older planes that the boomers will be shedding in the next few years, with not too many new pilots interested in them. For myself, I'm glad I got out when I did.

Dan (ex-N3319R)
 
My Lance has been for sale since February. I get occasional calls from brokers wanting to represent it, but only 3 tire kickers, and those in the first three weeks.
 
I don't see prices going back up for a while. I'm going to continue watching them decline so that when it's time for me to buy I get the most plane for the least money.
 
Dan Smith said:
I don't believe that there's going to be any upturn in the next few years, and expect used plane prices will continue on down. There are a lot of older planes that the boomers will be shedding in the next few years, with not too many new pilots interested in them. For myself, I'm glad I got out when I did.

Dan (ex-N3319R)
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There are enough newer, snazzier planes on the market that the older ones are that much less desirable. They were the only game in town for years thanks to the industry slow/shutdown in the late 80s, early 90s. Plus, as pointed out, a shrinking population and rapidly-increasing cost of gasoline will only exacerbate the situation.

Good planes that fill a niche will sell. Some of the more exotic, like Navions and Bellancas, will continue to crater IMHO. I can't imagine trying to sell an Apache, or a 7000hr Warrior right now. I predict the salvage yards will have full inventories in years to come.
 
My timing for my purchase could not have been much worse, could it?

Still, it looks like Bo prices (S35 and later), for decent planes, are holding on OK.

But I ain't sellin' ennyhoo.
 
A local A&P is trying to sell his C172E -- the one with the johnson bar flaps and the 145 Continental. I figure it would get snapped up but it's been two months...
 
Ebay is not always the best source of data. Exposure tends to be short, and often the prices don't even meet their reserves. I wouldn't argue about the trend, in a bad economy it makes sense that a luxury item will have harder sell. I'm certain boat manufacturers are feeling the strain, and Harley Davidson even announced a slowdown. Just a sign of the times. The time might come when the availability of all these cheap old airplanes leads to a resurgence in pilot populations. At the very least we'll all eventually end up with really nice rides.
 
What are the implications for those who took out airplane loans collateralized on increasing hull values? Similar to the housing market?
 
When you see new airplane manufacturers laying off despite the 2008 tax incentive to buy new airplane (50% the first year), you know the used market is going to get beaten up. It's not over either.

GA planes residual values had been increasing for a few good years, now that bubble has burst and these values are plummeting. Low confidence in the economy, high gas prices, LSA migration, and less people becoming recreational pilots; that's a perfect storm for older GA planes
 
SCCutler said:
My timing for my purchase could not have been much worse, could it?
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I'm going to take a bigger hit...new airplane, new airplane price. That will be ameliorated some by the airplane being small, economical to fly, and well-equipped, but I figure I'd have a hard time getting good money out of it if I had to sell.
 
docmirror said:
I just had a sad journey though ebay single engine planes for sale. It was disheartening...Too depressing.
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Why so glum? Sell low, buy low if you're looking to trade up/down. It all equals out. A bonus is it is now easier to convince the taxman of lowered valuations.

Depressing would be stratospheric pricing with no hope for the common man to buy in.
 
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JohnR said:
That's still pretty much the case for most of us.
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Even now?

We just bought a second plane, a '48 Ercoupe, with two friends. My total outlay: $6,000.

That's less than I paid for a MOTORCYCLE in 1988.

Aircraft ownership CAN be affordable. To claim otherwise is simply wrong. And it's a fantastic time to buy.
 
Jay Honeck said:
Even now?

We just bought a second plane, a '48 Ercoupe, with two friends. My total outlay: $6,000.

That's less than I paid for a MOTORCYCLE in 1988.

Aircraft ownership CAN be affordable. To claim otherwise is simply wrong. And it's a fantastic time to buy.
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"Affordable" is is in the wallet of the beholder, otherwise every pilot would own 2-3 airplanes.

I'm happy you found an Ercoupe, but not everyone is able to buy an airplane -- or a second airplane.
 
I can barely feed and house one. But if this trend continues it could morph into a much faster one.
 
Richard said:
Why so glum? Sell low, buy low if you're looking to trade up/down. It all equals out. A bonus is it is now easier to convince the taxman of lowered valuations.

Depressing would be stratospheric pricing with no hope for the common man to buy in.
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It's only depressing because I have a plane for sale, and not much action. I guess I'll keep flying it until it goes to the recycler. Shame, such a nice plane. If I were in the buying mood(I am, kinda), it wouldn't be depressing at all.
 
While I would loose money on my plane if I manage to not become unemployed by the end of the year with all the layoffs perhaps an upgrade will be more affordable.
 
JohnR said:
What are the implications for those who took out airplane loans collateralized on increasing hull values? Similar to the housing market?
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A lot of planes were financed with home equity. We know about how THAT is working out.

He says... I'm in my second 5 year loan with 15 year amortization. It'll be funny (not) if when my final 5 year loan rollover comes they say I don't have enough Loan to Value. :(

Still, my mortgage rep said they want to write that loan, too. I only vaguely warned her that they don't know about aircraft financing.
 
A lot of planes were financed with home equity. We know about how THAT is working out.
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That's why I financed my plane with an aircraft loan. If things go south, they can take the plane, but not your house. Its worth the slightly higher interest rate to me.
 
Flyfishingpilot said:
When you see new airplane manufacturers laying off despite the 2008 tax incentive to buy new airplane (50% the first year), you know the used market is going to get beaten up. It's not over either.
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hmmmm, when did this tax incentive start? I asked my tax guy in Feb/March and there wasn't one yet according to him. This would have been good to know...
 
woodstock said:
hmmmm, when did this tax incentive start? I asked my tax guy in Feb/March and there wasn't one yet according to him. This would have been good to know...
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I think it was all part of the economic stimulus package with the "rebates" <ha>.
 
woodstock said:
hmmmm, when did this tax incentive start? I asked my tax guy in Feb/March and there wasn't one yet according to him. This would have been good to know...
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Jan 1, 2008. Aircraft must be new, ordered during 2008. With some creative thinking, you can get up to 80% on first year depreciation deduction. Good article in Plane&Pilot May 2008. Unless your CPA is a pilot, that's not the type of info they keep up with...
 
smigaldi said:
I am in that boat, er plane as well. At least I am not paying interest on a loan for a depreciating asset.
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Yes, there is that. And because I am a reluctant seller (spouse-induced move), I'm not really all that upset that it hasn't sold yet. It gives me the summer to re-acquaint her with the utility of GA, although the $5.21/gal I paid this morning is a little disconcerting.
 
gprellwitz said:
Bush signed it on 2/13/08. Note, though, that it's only good for business use of the plane because it's dealing with Sec. 179 depreciation. http://www.aviationtaxconsultants.com/pdfs/Used Aircraft Buyers and Bonus Depreciation.pdf
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Well, I had considered doing this last year because I need a massive deduction, but the last tax incentive had long since expired when I looked into it. My CFI was very successful in his plane venture - he leased back a brand new Diamond Star (which he had bought about 5 years ago, I believe) and did very well on both leasing and the deduction. Thanks for the info! I imagine it is similar to the last time I looked into this.
 
woodstock said:
My CFI was very successful in his plane venture - he leased back a brand new Diamond Star (which he had bought about 5 years ago, I believe) and did very well on both leasing and the deduction. Thanks for the info! I imagine it is similar to the last time I looked into this.
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Did he keep the aircraft when the depreciation expired, buy a new one, or get nailed by capital gains? My last foray into leaseback resulted in a $42,000 tax bill when I sold the airplane.
 
Ken Ibold said:
Did he keep the aircraft when the depreciation expired, buy a new one, or get nailed by capital gains? My last foray into leaseback resulted in a $42,000 tax bill when I sold the airplane.
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I think he is in the middle of the decision process on that.

Despite the 42K tax bill, did you come out ahead anyway?
 
mikea said:
I dunno about 50%, but it's a similar investment tax credit for business use as the one that applies to Hummers. I thought it was 10%.

A credit means you take that 10% off of your tax bill, not off of your taxable income.

There were signs at Oshkosh "Let us tell you how buying this nnnn will save you $25,000(?) in tax this year."

Maybe adding in the depreciation, which does come off of your income, gets the saving closer to 50% over the years you can depreciate it.
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This new incentive, if it's the same structure as last time, is a huge deal. Without that incentive, the 10% or so you mention is more on target.
 
Ken Ibold said:
Well, it's not any easier to have paid with cash and then see your investment losing value with few sales prospects.
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Look on the bright side, scrap aluminum is selling for 90 cents a pound, so its going to be worth something.:redface:
 
woodstock said:
Despite the 42K tax bill, did you come out ahead anyway?
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Lost a little money before the tax bill. The annual tax loss covered about 70 percent of the cost of owning the airplane, then it lost money almost every month on leaseback, and the capital gain was the final insult.
 
I knew going in that I was ****ing my money away. I got out of the Sundowner without too much pain. I'm optimistic that the '05 T182T will be attractive enough when I sell that I won't get any more than a typical depreciation hit, it being new enough and gadgeted enough.

Used LSAs are going to kill the older/smaller airplane market, IMHO.
 
flyersfan31 said:
Good planes that fill a niche will sell. Some of the more exotic, like Navions and Bellancas, will continue to crater IMHO. I can't imagine trying to sell an Apache, or a 7000hr Warrior right now. I predict the salvage yards will have full inventories in years to come.
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Contradicting quote, The Bellanca fills a niche, Fast and affordable. Once you've flown a Viking it's hard to go back to anything else. If they crater there will be some very happy pilots out there.

Dan
 
I think the price of all planes is still headed down slightly. Which is bad for me, cause I'm trying to sell one now. No one aircraft will be spared, but I think that just like the auto market, some niche planes will suffer less than others. IMO the IO-520/540/550 CI, 300HP gas gulpers will be affected. The C150, with an O-200, or the Aeronca with a C-90 will be less affected.
 
For a while, it looked like trainers -- especially C-172s -- were going to be spared because of demand for them from China and India. But even those prices have started coming down now.

The first thing I saw the price of old 182s drop below the price of equivalent-year 172s. That's still true in some cases, probably because people are afraid of the fuel burn. But the 172s are being forced down, I think, because everything else is coming down around them.
 
I already own one of those older planes. Depressing part for me is filling those tanks with 200 gallons worth of fuel. A rich Texas oilman I ain't! Even if I were so inclined, selling it is out of the question right now.
 
2256Q said:
I already own one of those older planes. Depressing part for me is filling those tanks with 200 gallons worth of fuel. A rich Texas oilman I ain't! Even if I were so inclined, selling it is out of the question right now.
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Hey, be glad you don't have a boat with 400 gallon tanks!:hairraise:
And one solution, even in some of the higher-powered planes, is to keep a low percentage power! Yeah, you won't beat a 172, but you won't burn (too much) more fuel, either!
 
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