How Well Do Experimental Aircraft hold their value?

You can take inflation out of the equation if you want, but the whole exercise becomes pretty pointless if you do. "Hey I paid $20,000 for this airplane in 1970 and I can sell it today for $40,000 so it went up in value." No it didn't. It lost value. A lot of value. But because its now worth $40k it lost less value than if it were still worth only $20k today. If you want to call it appreciation because something lost less value than it otherwise could have that's fine but that's not what appreciation is. Or at the very least its appreciation that's a negative value.

I have to agree with @easik that we should generally remove inflation from the equation as inflation is a matter of Profit/Loss, not appreciation/depreciation. What you are describing is indeed true but nobody really looks at their stock, 401k or housing investments and calculates and starts calculating the inflation-adjusted value for the money they put in before calculating their return on investment (neither does the IRS for that matter), they just look at the "value" and see it went up.

If you want to include inflation than you also need to start including things like the cost of money (i.e. the interest rate on the loan you likely took out to buy the plane), opportunity costs (i.e. what the money could have earned had you placed it into a "smarter" investment), maintenance/sunk costs (e.g. every month you sit on a plane that isn't flying but is in annual is money lost towards the annual inspection and storage costs, while every hour you put on the plane before selling it is decreasing its value, unless you plan to overhaul the engine before listing it), etc. The list goes on pretty much ad nausem with regards to the various things you "could" consider in weighing your analysis of whether owning a plane was ultimately profitable for you.

The other problem with including inflation is that the market varies widely, especially over the "short" term. Just look at housing leading up to 2008 and housing since 2008 or college tuitions or computers. I'd even argue cars are in line with inflation only because of the features added to them.

So yeah, the fact your $20,000 doesn't buy as much today as it did in 1970 is an important profit/loss consideration but it does not change the question of whether something appreciated or depreciated in value.
 
I got's no idea what you just said....o_O

the inflation argument is true. Money is just paper unless someone is willing to take it in barter for something else. Money makes it easy for us to compare how much we can get in groceries, clothes, housing, etc for the cost of the aircraft. Inflation adjusting means you are comparing what your aircraft is worth today Vs. The cost of groceries today instead of competing the cost of your aircraft today vs. what groceries cost 20 years ago. Which one makes more sense? The reason we don’t do it is because it’s not convenient or quick or easy.
 
Thanks for the necropost!

Wait, you mean I just read through the this whole thread just for it to be a necropost? No wonder I didn't remember any of it!
 
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Late 2019 the Fed did another major bailout. No one much cared or it was drowned out by the covid news just a few months later.
 
Ask is not selling price, so its hard to judge.

I would only put value on the motor, the avionics and discount the kit cost as the person making the plane may or may not have the skills to do it properly.
 
Are we talking about a flyable plane?.....or partially completed projects?
 
I’m still waiting for @hindsight2020 Prognostication to come true.

there are some toys that I want to buy.
navarricos-navarros.gif


:D

That Covid threw thing for a loop boy. But, 4.9% 30 year a mere week after they announced 4.5% on 30 year fixed. We're getting close. Hoooooooooooooold! :D
 
Right now, we're at the apex. A recession is almost upon us. Ask this question again in June 2020 and you'll get a much different picture. Mark my words. The next 2008-like toy shedding is upon us. It's overdue.

This post did not age well.
 
I think the timing is off a bit, but???. I am guessing that if you replaced the 2020 date with 2023 the accuracy of the prediction will show.

So is your prediction that prices in 2023 will be lower than prices were in 2019? Because otherwise, the original prediction would still not be accurate.
 
So is your prediction that prices in 2023 will be lower than prices were in 2019? Because otherwise, the original prediction would still not be accurate.

No, just that prices will drop a significant amount once the new world order sets in.
 
Predicting recession is kind of like a cult leader predicting the end of the world. Eventually he will be right. The timing is the hard part.
 
Used to be the good RV6's were 40-50k ... now I see a lot of "asking 85K". The RV7's didn't appreciate as well, but are still up there. Am sure I could sell for what I bought mine at 3 years ago ....
 
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