The economics of the engine upgrade

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AA5Bman

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He who ironically no longer flies an AA5B
Can those of you that have actually completed an engine upgrade help me understand how that process works from a dollars and cents perspective?

These days I'm flying a Cessna 205 with the IO-470S. If I wanted to put in Western Skyways IO-550, what am I going to spend? $60k for a brand new engine plus install?

That seems like the "retail" way to do it, but it's an amazing amount of money - like 1.5x what the plane is even worth. Am I missing something? Is there value in the current IO-470S? Does it make sense to sell the IO-470, buy a runout IO-550, overhaul, and install that engine? Does that save any money? Or is there some other way to do it?

For those of you that have actually taken on such a project, how did you do it? And... if you don't mind asking, what did the total bill come out to?
 
I took on a less ambitious project, that of converting an IO-520 to an IO-550. The 550 is just a stroked 520. It's also been awhile, so this is from fuzzy memory (sorry)

I cracked my 520 crankcase, so we did a field overhaul at a shop that I knew and trusted. The base overhaul at the time was $18,000 and change for the 520. The conversion to the 550 involved swapping out the connecting rods ($600 apiece if I recall, the suckers were titantium), pistons, crankshaft, possibly camshaft. We replaced the crankcase, and had to anyway. I was getting new cylinders, so it was only a matter of ensuring the proper venturi seats were used (all 550s have them, but not all 520s do if I recall correctly)

Then we had to buy the STC for my airframe (Bonanza), and pay a friendship fee to D'Shannon, $2,500 if I recall.

I'm unfamiliar with the 470S, but if it's a similar situation (probably a bore + stroke change in that scenario), then you might be able to "work some angles" as part of the upgrade and either manage the cost down or the quality up.

I believe companies like Airpower can handle a dissimilar core upcharge for swapping the 470 for a 550 reman off of their shelf. I recall it was very reasonable in my case. You might call and ask what that fee is.

I think all-in, it was about 8-10 grand in extras over and above the things we had to do to our 520 anyway. The need for a crankcase helped push us in that direction, I think it was $4500. The total project was in the 30K range. This is in 2010 or 2011. Costs are nuts these days, so I assume double my numbers. :)

80% of my enjoyment of the 550 upgrade was almost certainly due to the fresh motor vs the tired one, but there is still a certain value to having the top dog mill under the cowling.

Also doing the break-in flight yourself is a thrill. Orbiting the airport with a tight engine at full howl is something everyone should do once. :D

$0.02
 
Don’t know much about the 550 conversion but you will likely need a new propeller too? What you have to ask your self is do you need the extra performance? Will the plane serve your purpose for a long time with the engine upgrade that the current one will not?

The 550 is a absolutely fantastic efficient engine but there are a lot of little expenses that will add up.
 
Yeah that prop is gonna add another $14k or something. Which is kinda my point. Do people really drop $80k to put a new engine and propeller on a plane that might not be worth even that, or is there something else I’m missing? You do see 182s and 205s with 550s in them...

And “need”the performance? Well, depends what you mean by “need”!!
 
AA5Bman said:
Can those of you that have actually completed an engine upgrade help me understand how that process works from a dollars and cents perspective?

These days I'm flying a Cessna 205 with the IO-470S. If I wanted to put in Western Skyways IO-550, what am I going to spend? $60k for a brand new engine plus install?

That seems like the "retail" way to do it, but it's an amazing amount of money - like 1.5x what the plane is even worth. Am I missing something? Is there value in the current IO-470S? Does it make sense to sell the IO-470, buy a runout IO-550, overhaul, and install that engine? Does that save any money? Or is there some other way to do it?

For those of you that have actually taken on such a project, how did you do it? And... if you don't mind asking, what did the total bill come out to?
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I have been watching a IO550 upgrade. You are comparing apples and oranges. The shop is going to have to install new mounts, exhaust, baffles, rewire some things, modify your cowling ect. There is a ton of labor that you don't pay for just an overhauled engine installation.
 
Many of these upgrades made sense years ago when the planes were worth more relative to the cost. The STC is still valid so they’ll still sell them if someone wants to buy, but few do anymore.

Imagine if you took a newer Baron and could upgrade engines on it for $150k. On a new $1+M ship that’s not so bad. On a used $150k BE58, much harder.
 
Clip4 said:
I have been watching a IO550 upgrade. You are comparing apples and oranges. The shop is going to have to install new mounts, exhaust, baffles, rewire some things, modify your cowling ect. There is a ton of labor that you don't pay for just an overhauled engine installation.
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Don't forget the paper work.. If there is no STC, the engineering alone will be cost prohibitive.
 
How about a O-470 to IO-520? Are the engines as physically different as 470->550? You could get a nice 300/310 METO HP 520 for a lot less...
 
Tom-D said:
Don't forget the paper work.. If there is no STC, the engineering alone will be cost prohibitive.
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Agreed. Checking to see if there is a supported STC would be the first thing I’d work on if I were considering an engine conversion/swap.
 
Oh yeah, the C-205 is right up at the top of my favorite airplanes list. In the 'eighties, you could get one for super cheap and once people figured out how much stuff it can carry, they became much more valuable.

A 205 with a monster engine in it would be a real sleeper...
 
I mean... There's no real benefit of spending anything on most of our GA airplanes. 90% of the stuff that gets purchased adds bupkis to the resale value of the plane. Putting in a glass cockpit into a 30k airplane costs you the value of the aircraft... but doesn't get you anywhere close to recovering the costs on the back side.

The real value is in what you get out of it. If you're going to have the plane for the next 15 years, then have at it. If you plan on selling yours and buying a different one before that, maybe hold off and put that money into buying upgrading your future plane for life.

Sent from my Pixel 3 using Tapatalk
 
IK04 said:
Oh yeah, the C-205 is right up at the top of my favorite airplanes list. In the 'eighties, you could get one for super cheap and once people figured out how much stuff it can carry, they became much more valuable.

A 205 with a monster engine in it would be a real sleeper...
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Unless the STC increases the max gross, you can't carry any more. just climb better
 
Western Skyways does have this particular STC but my question is more general. There are lots of people flying around with the pponk 470-50s in their 182s or even an IO-550. People put 160hp in pacers, 180 hp in 172s, rocket 305s in Mooneys, etc etc.

I figure that you would do this at overhaul time. And if there was a way to do the engine upgrade that was only incrementally more than the overhaul, I’d probably consider it. I always figured there was more going on than just buying a new engine off the shelf (plus, what do you do with your old engine - is it worth anything?), but maybe not. I dunno... that’s why I ask the question for anyone who has actually done it.
 
When I did my Pponk? Continental recalled my factory reman’s crank at 100 hours. They had to provide a crank, parts, and labor to rebuild the engine. They were out of 470 cranks at the time. I asked for and was provided a 520 crank. I had the case machined and bought new 520 cylinders. I sold the 100 hour since new factory 470 cylinders. I got a 520 upgrade for aboit $8K less the (then) $12K new prop. Total expense $20K and change. Great mod. Would I have done it at the “retail” price? Oh hell no. I’d have sold the plane and bought a 185.
 
You can sell your old engine for core value depending on condition 3-4k maybe. As mentioned earlier, a lot of these conversions were done a long time ago when it was much cheaper to do so or they were done to satisfy a need, not always a want. Some people just like a particular airplane and are willing to invest large amounts of money to make it perfect in their eyes. No different than everyone upgrading to glass instruments and fancy autopilots. Not really necessary and not economical but they just want to do it. If you are that torn on the price of it, you probably should just go with an overhaul of your current engine.
 
Engines and other upgrades are only worth it if they are worth it to you. If you are worried about resale value, you are better off buying the airplane you really need or want. Much like houses, most upgrades will not increase the value enough to compensate for the expense.
 
My personal experience with Western Skyways has not been good. PM me if you want more info.
 
Checkout_my_Six said:
It’s always cheaper to sell and buy whatcha want.
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Which is why so many of these STC holders have faded from existence. About the only ones who survive are the ones that create a something unique from an ordinary airplane. Tailwheel conversions used to be a very popular stc that has all but gone away as it's cost prohibitive now. By the time you do a TW conversion and engine stc to a 172 it would be cheaper to buy a 180 that will be all around better.
 
IK04 said:
How about a O-470 to IO-520? Are the engines as physically different as 470->550? You could get a nice 300/310 METO HP 520 for a lot less...
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The external dimensions on the 470/520/550 are such that they end up being more or less interchangeable (unlike angle valve 540s vs. parallel valve). The 520-550 conversion is more popular since that's just a crankshaft. 470 to 520 or 550 you either need a new crankcase or you need to bore out the cylinder holes in the case. Hence why the 520-550 upgrade is so popular (especially on Bonanzas). Colemill had a good business when these planes were worth more selling upgrades for all of the big 6-cylinder airplanes. After the flood that wiped out Colemill as a company, Mike Jones bought up the complete STC rights for all of Colemill's STCs, primarily because he needed those for his "Lock and Key Navajo" program. I'm not sure how many of those he's selling either, but a few.

Bill Colbert was a really nice man when I spoke to him around the time we got the 310. When we finally needed to overhaul the 310's engines, I went through the options including doing the 520 to 550 upgrade (we already had 520s). Mike Jones very much seemed to be of the mindset of trying to get his money back on his investment and was pretty difficult to deal with, and made it such that the cost of the 550 upgrade was going to be much, much higher than just overhauling the 520s. I can't blame him for wanting to get money back on his investment, but ultimately he lost a sale because he was unwilling to budge on pricing for an airplane that already had one conversion, and all he would've had to do was sell a copy of the STC paperwork.

I'll disagree with @Checkout_my_Six to some extent, because if you have a good airplane a lot of times trading ends you up with a bad airplane if it's of the same type, or it can be hard to find the same make/model exactly as you want it. However if you look at your requirements in terms of performance, it can often make sense to just buy a faster plane than to try to make yours faster. For example, if you fly an Aztec and you want it to go 310/Baron speeds, you should just buy a 310 or a Baron. If you have a 310/Baron and want Aerostar speeds, buy an Aerostar. etc.
 
ircphoenix said:
I mean... There's no real benefit of spending anything on most of our GA airplanes. 90% of the stuff that gets purchased adds bupkis to the resale value of the plane. Putting in a glass cockpit into a 30k airplane costs you the value of the aircraft... but doesn't get you anywhere close to recovering the costs on the back side.

The real value is in what you get out of it. If you're going to have the plane for the next 15 years, then have at it. If you plan on selling yours and buying a different one before that, maybe hold off and put that money into buying upgrading your future plane for life.
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^ This

If you plan to have it for a long time, do whatever you like as long as you are good with the cost. If you are thinking you may sell in a few years then you need to look at how much of that cost that you will "lose". You were going to lose it either way, just over a much shorter timeframe.
 
wayne said:
If you plan to have it for a long time, do whatever you like as long as you are good with the cost. If you are thinking you may sell in a few years then you need to look at how much of that cost that you will "lose". You were going to lose it either way, just over a much shorter timeframe.
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This is only true to a certain extent..I know several people made the right upgrade, which increased the value of their aircraft, which allowed the owner to actually make money.
 
Tom-D said:
This is only true to a certain extent..I know several people made the right upgrade, which increased the value of their aircraft, which allowed the owner to actually make money.
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I guess that can be true if the plane is heavily discounted and in desperate need... But that's not going to be true in most cases. Especially with a true owner's plane. My Cherokee was worth 33k ish. If I had put in a trutrak, it would have cost me 7-8k. Most people aren't going to pay 40-41k for a 140/160.

Sent from my Pixel 3 using Tapatalk
 
ircphoenix said:
I guess that can be true if the plane is heavily discounted and in desperate need... But that's not going to be true in most cases. Especially with a true owner's plane. My Cherokee was worth 33k ish. If I had put in a trutrak, it would have cost me 7-8k. Most people aren't going to pay 40-41k for a 140/160.

Sent from my Pixel 3 using Tapatalk
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The only airplanes that could potentially make money with upgrades are going to be your working class airplanes like 185, 206, supercub, etc. Airplanes that have no real substitute for which you have increased their usability. Those are usually the exception and not the rule though. If we made rational airplane decision there would be no airplanes ever getting restored as it's usually an investment of passion unless the airplane is given to you.
 
Yeah, if you are going to sell it in a couple years it makes no sense to dump big money into it. But for a plane that works for you and is a proven good plane, you aren’t making an investment for when you sell it, you’re improving your experience.

I bought a plane that will work for me probably forever so I just don’t get the “don’t spend money on it” position. It will grow with me for a long time with some upgrades.
 
I was solidly in the camp of wanting to upgrade my plane (when I had it) for me, not resale. Unfortunately everything is just so damn expensive! Heartened to see that TruTrak seems to have put the pressure on Garmin to push out a product. After being away for a year or so from it, it's kind of nifty to see the pressure put on the big guys by some of the limited smaller guys entering the market.

Sent from my Pixel 3 using Tapatalk
 
This thread has drifted into the "is upgrading worth it" conversation which is fine but deserves its own thread. I was just trying to understand if there's a non-retail way to this that I'm missing. Honestly, I'm not seriously considering an upgrade at all, just trying figure out if there's a path that I wasn't aware of.
 
ircphoenix said:
I guess that can be true if the plane is heavily discounted and in desperate need... But that's not going to be true in most cases. Especially with a true owner's plane. My Cherokee was worth 33k ish. If I had put in a trutrak, it would have cost me 7-8k. Most people aren't going to pay 40-41k for a 140/160.
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What I've found is that when you're talking lower 5 figure planes, there's not a lot you can do to make the value go up very much. Most of the time the economics don't make sense for, well, anything outside of what you need, so it has to be because you want. You can't put $30k into an airplane for which good examples fetch $30k and expect to sell it for $60k.

Once you get into planes in the upper 5 figures and into the 6 figures, upgrades will typically get you a much better ROI. In the Twin Cessna world if you were flying a 310R or a '75+ 340/414/421 you could (and still can) get a good ROI on improvements that you make.
 
ircphoenix said:
I guess that can be true if the plane is heavily discounted and in desperate need... But that's not going to be true in most cases. Especially with a true owner's plane. My Cherokee was worth 33k ish. If I had put in a trutrak, it would have cost me 7-8k. Most people aren't going to pay 40-41k for a 140/160.

Sent from my Pixel 3 using Tapatalk
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The problem is we have a lot of junkers on the market and buyers think cheap is better.
when the smart buyers knows you can buy better aircraft than you can build then when they realize that that have choice of pay you now or pay some one later, the smart buyer will pay you now and fly now.
 
On the other hand, I bought a plane in great condition for way under market value because it had a run out engine and old avionics. I believe I’d get back every penny I put into my overhaul if I were to sell because now it’s a plane in great condition with a low time engine. I expect I’ll not do as well as I upgrade the avionics, but I’ll be doing it for me, not for the next owner.
 
FWIW I bought a 182 with an air plains iO 520 300 hp conversion. Every one that has flown with me says “holy ****” as soon as we take off. I love it. Would I pay the 79k it costs today? Probably.
 
deadeye99 said:
FWIW I bought a 182 with an air plains iO 520 300 hp conversion. Every one that has flown with me says “holy ****” as soon as we take off. I love it. Would I pay the 79k it costs today? Probably.
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Power corrupts.... once you have it, you don’t want to go back. ;)
 
That would make a hell of a plane out of her.

The only issue is you’re starting of with a 205, if this was a U206 that would be a different thing, end of the day a 205 is more or less a 206....but it will never be a 206, let alone, a factory seaplane U206 or something.


I’d say if you’re going to be keeping the plane long term do it, otherwise no
 
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