Total Cost of Ownership w/ Exit

clamshack

Filing Flight Plan
Joined
Apr 25, 2019
Messages
10
Display Name

Display name:
clamshack
I'm lucky to be in a situation where I have some liquid cash, let's say 60-65k. So, in the event I wanted to buy, why don't I ever seem to see the exit sale price of the plane in the calculation. I can't post links yet, but take a look at 2327298 on www.trade-a-plane.com as an example. It's a 1968 Cardinal 177, TT: 3230 SMOH: 373. Current annual & IFR certified though I'd want to add ADS-B Out. Is this plane going to depreciate much? My plan would be to keep it for a few years and fly around 300-500 hours total.

Thanks for humoring me, I'm sure this has been discussed a lot, but most discussions don't include an exit strategy built into the equation.
 
I assume older planes are fully depreciated. Buy for $X, updating avionics will add value, putting time on it will subtract value. Pay more money every year to keep it airworthy. Then with any luck you can sell for $X + inflation, assuming no major market/economic fluctuations.
 
I assume older planes are fully depreciated. Buy for $X, updating avionics will add value, putting time on it will subtract value. Pay more money every year to keep it airworthy. Then with any luck you can sell for $X + inflation, assuming no major market/economic fluctuations.

Generally speaking, when do you consider them fully depreciated? 5, 10, 15, 20 years.....
 
$65k for a 1968 177 seems like an ass load of money, like they raised the price directly by how much they spent on paint and radios.

There is definitely some risk buying airplane with GPS near the end of their supported lifespan IMHO.
 
Baring any upgrades or damage the only thing that will impact resale is hours. Assuming you purchased it with a price adjusted for hours since tbo, I would expect to loose around 10.00 an hour on resale. As that is approximately the overhaul price decided by TBO. You can add a little back for inflation and of course upgrades and cosmetic improvements.
 
There is definitely some risk buying airplane with GPS near the end of their supported lifespan IMHO.

Besides the unit, how much labor is involved to swap a GNS430 for a GTN650? I'm assuming, and maybe wrongly, a lot less than the initial install of a GPS.
 
Besides the unit, how much labor is involved to swap a GNS430 for a GTN650? I'm assuming, and maybe wrongly, a lot less than the initial install of a GPS.

10 hours assume the one in there was done correctly the first time.
 
Personally, I don't include the value of selling an airplane in my calculations because 1) it doesn't affect the cost of owning and operating and 2) I wouldn't buy it intending to sell it.

If you want to see how much it will cost you to own a plane for a few years, including a sell price might be appropriate for you.
 
Actual sales prices aren’t available, right?

I assume I’ll overpay and get stuck.

Actual sale prices are not in a public record to my knowledge. There are books out there, buyer's brokers and appraisers.

Personally, I don't include the value of selling an airplane in my calculations because 1) it doesn't affect the cost of owning and operating and 2) I wouldn't buy it intending to sell it.

If you want to see how much it will cost you to own a plane for a few years, including a sell price might be appropriate for you.

Buying while not intending to sell definitely applies to a lot of people. A house or an RV can be the same. Maybe you intend to be in it for 20 years, at that point the future sale price is moot. Same with a plane, the only difference being the operating expense of a plane can be a ton more than it's initial purchase price :). Usually the opposite for those other big purchases.

Anybody else out there only calculating inflation in the capital cost of the aircraft in their total expense?
 
Besides the unit, how much labor is involved to swap a GNS430 for a GTN650? I'm assuming, and maybe wrongly, a lot less than the initial install of a GPS.

Nope, it's more. You're saving nothing. Labor cost to remove the 430w trays and such, plus brand new install job for the GTN. they're not slide-in compatible. The only savings is the WAAS antenna is already installed and perhaps the indicator cost and installation. Which brings me to the below....

or pop an IFD 440 in for zero hours of labor

Bingo. This. Avidyne FTW on this decision to clone the wiring pinout.
 
Much of the change in resale value has to do with the market fluctuations that will occur with time. For example, with the 414 Cloud Nine used to have, the owner purchased it at a peak (~2001) for $250k. Sold it for $100k in much the same physical condition. So, he lost a lot of money on that obviously. However there was a period where old planes were appreciating rather than depreciating.

Assuming that you have a period of time where resale values as a whole haven't changed for the fleet, then the things that will impact your resale at the end of life vs. beginning. Those are hours/years on your engine(s) and prop(s), condition of the paint and interior, and the avionics. So for example, you buy a plane that's $60k and it's a top of the line plane with 10/10 on P&I, best avionics, and brand new engine and prop. You keep the plane for 5 years, fly it 1000 hours. Now you have a mid time engine and a prop that may be mid time on it. You also flew through a lot of rain storms and your paint isn't looking so good, and you flew dogs that left messes in the plane and tore your leather seats so the interior is also deteriorated.

The market might still support $60k for the plane you purchased, but your plane might now be worth $40k because of the wear and tear.

If you take care of the plane and do things properly, also buy it right and sell it right, you generally can more or less break even. But nobody can account for what will happen in the market.
 
$65k for a 1968 177 seems like an ass load of money, like they raised the price directly by how much they spent on paint and radios.
Yup. Its a 177 with acceptable but certainly not great radios. The 430W is the KX155 of 20 years ago or the KX170 of 40 years ago which is to say it functions but it ain't great and never again will be. And the Michael 2nd radio? That's nothing more than a KX170 with digital display and flip/flop function. If you expect side-tone from it you're probably going to disappointed.

On the upside it does have nice paint and power-flow. But the power-flow is going to give you some climb and not much else. Long and short, there's a sh*t ton of '68 177's out there. This one is nice but I don't think its nice enough to bring the same kind of money that a later money 'RG model could get you. My opinion only.
 
Long and short, there's a sh*t ton of '68 177's out there. This one is nice but I don't think its nice enough to bring the same kind of money that a later money 'RG model could get you. My opinion only.

So, at the time of purchase, I will be 60-70 hour private pilot. I suppose I could get a complex, that doesn’t take much right? I would want to use this plane for my IFR rating. Is anyone going to insure me on an RG model with 80 hrs and private/complex? How much more are the annuals?
 
An RG is it's a cheap way to build complex time towards your commercial rating while getting your IFR.
 
That's about the right price in this market where the value of 172 and 182 have gone stratospheric. Its pulled forward the 177 and also Dakota's too. Unfortunately, we have no way of knowing if and when it'll cool. For those not shopping the past few years those 2 models were seeing 20% price increases.

I love the cardinals but an RG costs at minimum $500/yr in maintenance and for a low time pilot, closer to an additional $1000 for the first year of insurance. Go join CFO if you want the scoop on those birds.
 
I would want to use this plane for my IFR rating. Is anyone going to insure me on an RG model with 80 hrs and private/complex? How much more are the annuals?
I wouldn't expect too much trouble finding insurance. I didn't have many more hours than you when I started flying a Mooney and insurance wasn't an issue. Insurance will be more expensive the first year, but that is always the case when moving to complex no matter how many hours you have. Annuals? You gotta put it on jacks and swing the gear so a couple hundred bucks more. But that's for the inspection itself. If the gear swings and everything is fine, that's it. Like any other item looked at during an annual, if issues are found when swinging the gear total cost of annual will obviously be more. Some Cessna RG systems can be quirky but I don't think the Cardinals are overly problematic.

But I should clarify that my comment about the plane you're looking costing as much as some RG's go for wasn't so much to say you should just buy an RG instead but more to point out that if a 68' fixed gear 177 is what you're looking for, there are cheaper examples to be found in similar condition. Because its an airframe that is considered by most to really need more horsepower and/or a CS prop, the 150hp 68's are unique among the type. They're obviously the slowest of the breed with the poorest performance. But the smaller motor is also going to have a lower fuel burn and the fixed prop is going to require less maintenance over time. Which is kind of a long winded way of saying if a 68' FG is what you really want, I don't know that you'll see as much value in a later RG and if a later RG is what you really want, I don't know that you'll be satisfied with a 68' FG.
 
A 150 horse 177 performs just about the same as a 150/160 horse 172 of the same year, with an extra 72 pounds fuel capacity to boot. Flying? I'd pick the 150 horse 177 any day of the week.


That being said we did pick up a 1968 182 with a GTN625, GI106A, GMA340, GDL88 and GTX 327 w/new encoder, dual KX155s, wet vacuum pump with new airwolf separator, tanis engine heater for $62k. It has about 900 hours on a factory reman, engine mount & exhaust and everything was done at the same time. Prop had around 300 hrs on an IRAN, Original interior in good shape, original paint needs some help. No hangar rash on any of the fight controls. A couple light dents on the wing leading edges.
 
Last edited:
Back
Top