Hey Bob, prior to COVID, would you say the VREF info was actionable in you were relying on it for an imminent purchase?
Right. My question regards how accurate a guide it truly is. Maybe it's close...maybe it's not.
When you are ready to over pay $35,000 -$50,000 on a hp/complex plane let me know. The era of cheap money and bonus depreciation is over.
You need another one.
I always thought of VREF being at least 20% too high, even more when adding in newer avionics
I would take exception to a divisor of 2. But I would have some resources available for the unplanned/unexpected. An engine overhaul being a worst case. But, if there is a good prebuy and history with oil samples that would lessen the likelihood.
A friend who is an independent aviation insurance broker said that right now (and ever since COVID), VREF is ridiculously too low. Like 30%-50% or more! He said some insurance underwriters are refusing to insure for anything over VREF, which ends up sometimes being 50% less than purchase price.
This is not uncommon in the aviation insurance business. Owners can and do put too much money in avionics their planes and the insurance companies apply a maximum for a make a model.
Aircraft insurance policies are written on an agreed value basis - not an actual cash value. In theory you should be able to insure your aircraft for whatever you paid for it - even if you paid too much. The only problem comes when the market value drops and your aircraft become over-insured.
VRef historically has been higher than the Aircraft Bluebook value. Bluebook is based on reported priced paid - not list price - so should be closer to reality. But it too lags behind current values when they change rapidly. You need to assess what the market is doing and understand WHY values are what they are. Right now values are elevated due to increased demand. When the "pilot shortage" ends and flight schools dump their aircraft back onto the sales market values of single engine piston aircraft will come crashing down.
Sounds like you need to hire a good broker if you’re going to buy some.
…that have been sitting for years.I'm thinking if one waits 10-15 years....when all the boomers stop flying....there should be lots of good aircraft available ...cheap.
Good is the operative word. I've received some negative broker feedback that makes me hesitant but it might be right for me.
That's already happening now lol
Annuals can be anything from just some words written in a log book to actual thorough inspections held to the letter of the law. Then you have things you can't predict/inspect like old engines, sudden hydraulic leaks, avionics failures, etc...
You've got that right...I believe a bad broker is worse than no broker at all. Check references.
It was a joke....King....a joke.
This is why you want to have a good shop, that knows that type of aircraft, do a pre-purchase inspection.
The population has doubled since the big ga push 50 years ago. Doubled!
Last year’s AP thought the exhaust was fine. This year it needs to be replaced…so that’s a 2k annual with a 10k? repair/replacement. I’m sure there’s a million examples.
I look at the annual as an inspection of the plane and its log books to make sure there is not anything that makes the plane a mistake to buy. It is sort of like a house inspection when you buy a house. It is not a guarantee that the plane is in perfect condition or that nothing will go wrong. It may give you some idea of needed expenses but by no means is all inclusive. Unfortunately, often the little things that are difficult or impossible to find are the things that will cost you in the future when they become apparent.
