High time engine affect on overall value?

ActiveAir

ActiveAir

Pre-takeoff checklist
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ActiveAir
How much should a high time engine (at TBO 2000 hrs. - IO 540) affect an airplane's value regarding insurance value and sale price? Engine still has high compressions and borescope looks good, after mostly been flown at 65% hp and LOP. Plane otherwise has nice upgraded avionics and new OH on 3 blade prop. BTW, insurance increases are ridiculous. So much for more pilot experience and older air frame producing lower premiums each year. They have only just continued to go up.
 
Sale price - Big impact. Any moment you may be out another $20k - $45K to replace the engine.
Insurance - Everything adversely affects insurance costs.
 
Really depends if you want to deal with an engine swap in the near future. It's a detractor for many buyers, except for those who want to overhaul the engine to their needs. Example taking an O-470 and adding the PPonk upgrade or a high-end engine shop like Zephyr or Victor Aviation.

If the compressions and visual inspection of both exterior and borescope are good, and oil consumption is normal; then the engine probably has a lot of life left. Part 91 is overhaul on condition. I bought my 182 with an engine at TBO and she flew for 4 more years and 350 hours before the engine starting to speaking to me.

I actually bought the plane for the airframe value and turned out to be a great deal.

If someone is looking at long term ownership, overhauling the engine to the buyer specs is valuable instead of lowest bid to sell the plane.

Insurance is agreed hull value so get it insured as if the engine was mid-time or fresh.
 
Price as if you have to OH tomorrow. Any extra life you get is gravy, but don't count on it, and don't pay for hope. Look up prices for your engine at a few OH shops and add that to your budget. Good news is that OH value is the least subjective part of aircraft value.
 
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It's probably a good thing if you're the buyer and bad if you're the seller. The thing might run another 1000 hours. You get it much cheaper. You make back most if not all your money on the overhaul when you finally do it and then sell some day.
 
NordicDave said:
... I bought my 182 with an engine at TBO and she flew for 4 more years and 350 hours before the engine starting to speaking to me.
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What signs were the engine speaking to you?
 
Ed Haywood said:
Price as if you have to OH tomorrow. Any extra life you get is gravy, but don't count on it, and don't pay for hope.
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That's generally good advice for any airplane purchase. The benefit to doing it on a high time engine is that you don't have to make any pretense about it.
 
It depends. Are you the seller or the buyer?
 
ActiveAir said:
What signs were the engine speaking to you?
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In my case started seeping oil beyond the occasional drip or two, slight pitting on the cam lobes, and 2 cylinders with low compression. Not my case, but others sometimes see higher oil consumption as well. At some point calendar age catches up with an engine too.
 
Selling at TBO seems to really limit your buyer pool too. I'd guess only 1/4 or so prospective buyers will even entertain a runout.

I prefer them myself, as I control the eventual overhaul quality, and as mentioned, possibility for gravy hours before the expense and downtime. But lots of folks want "turnkey" and the false security of a low SMOH number. ¯\_(ツ)_/¯
 
The insurance market is adjusting back to normal now that many companies who offered dirt cheap prices the last decade are leaving due to being crushed by costly claims.

I'm an adjuster and believe it or not most of my bad crashes and high value claims have been experienced pilots older than 40, not some student pilot.
 
FWIW, Mike Busch says pretty much the same thing: don’t overhaul it until necessary. Careful monitoring at oil changes would be a really good idea, of course.
 
ActiveAir said:
Looking at insurance aspects. Want to be cost effective but not under-insure.
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So then if you use it, you'll be selling. It has little impact.

If you want better, the hourly loss is (overhaul cost / 2000), but you'll need a base value. Or you can do some comparison shopping on the selling sites.
 
I know this answer will not help you much, but there are two ways to measure the impact of engine time on sales price.
1) Subjective on the part of the seller and the buyer. This has been discussed in previous comments.
and
2) Statistically speaking, the impact of engine time depends entirely upon the aircraft up for sale at the particular moment you are in the market. At the time I did my analysis (2010), avionics age/modernity was king (and I ain't talkin' about the manufacturer). Engine time came in second. If I had my analysis handy, I could show you exactly how much each hour subtracted from the value of the plane. Of course, the engine age (IIRC) also depended on the make/model of the aircraft itself.

So, in summary, the answer to your question is: it depends.
 
schmookeeg said:
But lots of folks want "turnkey" and the false security of a low SMOH number. ¯\_(ツ)_/¯
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This is a good thing to keep in mind. Low SMOH numbers really are a false sense of security - anything can happen at any time, and you don't know if the prior owner treated the engine well, or terribly, or broke it in properly, or what. All that said, however, having been through a nightmare overhaul, I'll personally take that risk over having to overhaul an engine, which can be a mess in and of itself especially if there is anything at all unique about the engine (for instance a rare engine or something significantly modified by STC). That's another good point, actually - if you're going to buy runout engine, my recommendation would be that it's something super down-the-fairway and unmodified. Stock O-470, stock O-360, that kind of thing. I'd be pretty careful buying a runout, highly modified GTSIO-480 or whatever.
 
ActiveAir said:
What signs were the engine speaking to you?
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At 2100hrs, it ate a piston ring on #3, repaired returned to service.

At 2200hrs, it ate the #1 intake valve.

Two fairly major engine issues 100hrs from each other, and considering the Mooney POH lists the recommended TBO for this engine at 1600hrs, we decided to call it and do a firewall forward.
 
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