What is the Real effect of Damage

Consider that you have the opportunity to buy either of two aircraft you have been dreaming about owning.  They are identical in every respect except that one had a hard landing that resulted in damage to one of its landing gear.  The damage was repaired and except for the paper documentation, there is no evidence that the event even occurred.  Both aircraft are identical in terms of flight worthiness.  But, would you be willing to pay the same amount for either aircraft?  Unlikely! 

Most price guides simply deduct a fixed percentage from the total aircraft value.  As is this example, most damage events only affect one or two items, e.g. landing gear, wing, propeller, windshield, etc. and most components that account for an aircraft's value are unaffected by the damage.  If you deduct 10% or 20% of the aircraft's value due to the past damage event, your are deducting that percentage from potentially high value item like the avionics, and engines that were unaffected and may even be new since the event.  Does this make sense? Of course not. This whole aircraft assembly percentage method is a very poor method of calculating damage history depreciation.  But still the two aircraft will clearly not command the same amount at resale!  It's not that the two aircraft differ in terms of flight worthiness, but the market will not treat them as equivalent due to the stigma associated with the prior damage!

The basic marketplace decrease or possibly increase in value depends on the type of aircraft, the extent of the damage, method of repair, and the time since the repair. There are other factors as well.  The market is less accepting of damage history on certain classes of aircraft.  For example, the stigma of damage is far greater to a corporate jet  than it is to a single-engine piston aircraft. It is important to note that in some older helicopters damage history can be an asset if done correctly with better improvements. We are trained to analyze the current markets response for each particular type of aircraft and the effect the known damage may or may not have on value and make those changes accurately. The values of unrelated components are often not affected. This approach is based on the experience in tracking the aircraft market since the 1980's and having access to information data bases containing literally tens of thousands of Certified Aircraft Appraisals during this period.

We can provide true methodologies that can often translate into a BIG difference in the real value of your aircraft and or aircraft equipment. The use of a simple blue book review and or internet research for a value without the advantage of our appraisers comprehensive data bases, hundreds of other professional appraisers and their knowledge, USPAP principals, the ability to read and interpret aircraft maintenance logbooks, plus understand current and or historical market trends will generally produce inaccurate information at best.  To properly account for the value impact of present or historical damage much more information will need to be gathered and analysed.  It will take a professional personal property aircraft appraiser to arrive at true and trust worth values.    

Ask your appraiser what method they use to calculate damage history.  If it is not the system described above, walk away!

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260-200-1555

aasi-Sales@alanaircraftservices.com

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AOG Number Alan Lance mobile  #260-450-3623

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Our office is located at the

1365 N Warren Rd.

Hangar 214G

Huntington, IN 46750