All the same incurring costs aside: In 10 years you’ll spend 700k more on the used MEP?
That’s an extreme case and my “rule” won’t work there. But it should be true if comparing a 10 year old DA42 with a 5 year old DA42, etc. A lot of seasoned owners have reported this.
JasonC wrote:
Using this analysis, MEPs are underpriced, turboprops are overpriced, jets are underpriced.
In purchase? Yea, that pretty much looks like there is some truth in that.
JasonC wrote:
But they are different segments and the same buyers don’t consider each category dispassionately. If you can, they you are right that you should do the maths and get the best value aircraft for you.
Well yes. That is one aspect which at times makes things “difficult” for people like me who do.
When I looked to buy a plane in 2009 after a hiatus, I had a budget and I knew I wanted something which goes 140-150 kts and has a decent range for two – three. That was all I “knew”. Types, segments, no preferrence, I was willing to look at everything. And ended up one segment (complex) higher than anticipated because it turned out that the type was affordable and more or less exactly what I was looking for. But I had not ever considered that airplane type or make because my “wisdom” at the time was that those Mooney are eeeexpensive. Wrong.
I see this regularly when people come to me and say they are looking for a plane. They think they can only afford a simple fixed prop/gear spamcan but discover that for their budget they can do much better. Bang for buck works that way, if you are fixed on a type or segment you will almost certainly end up there.
If you want, the turboprop vs light jet business goes in that direction. Turboprops are highly valued. Jets are not. The estimation by many perspective buyers is that they can not afford a jet (which they really want) so they go for a turboprop which is the next best thing. Well, how is that really? Most TBM’s are in a range of 2-4 Million used (save some original 700s) and you can get a 501SP for 250-500 k with mid time engines or a Mustang for 1 Million. Or, if you still will do turboprop, a Cheyenne for 400-500k. And if you have a TBM budget of say 2.5 Million and end up buying for 500k airworthy and with potential for a few years then you have 2 million to pay the difference in cost… and all of a sudden, that jet is not as unaffordable anymore.
Timothy wrote:
I am happy to share this with you, go through it with you at Friedrichshafen or both.
Super! Yes, I am looking forward to meeting you in person finally at the Aero. Will pm before that.
Peter wrote:
Also, if you buy an older plane and keep it for say 10 years, the amount you will spend on it is likely to be similar to buying a newer one and keeping that for 10 years.
I bought my most recent plane nine years ago for $35K, at which point it was 39 years old. I estimate during the nine years I’ve spent maybe $10K on parts and maintenance. The closest thing to a new production plane of the same type would be roughly $200K. I have never known anyone spend $165K or anywhere close on a plane of this type over any period.
If one instead makes the comparison to buying a ten year old partly depreciated plane for $100K, I would have had to spend $65K on parts and maintenance over my period of ownership to break even. This would be equivalent to a compete, ground up restoration. Possible to do, but not likely to be necessary.
Jets are underpriced because the’ll eat your lunch if you intend to maintain them indefinitely. The market realizes this.
Take the old venerable Cessna 501SP as a good example. They can be bought for about $250-300K these days, in pretty decent shape. For that kind of money you get about 1000-2000hrs left on the JT15D’s. Overhaul cost is $350-450K each, so it makes zero sense to overhaul on an airframe this old. Will never happen on any of the ones you see, most likely. You basically fly it until the engine time is up and then scrap it or part it out. If you so want, you can buy a set of used JT’s and hang them on and get a few more thousand hours out of it. Plenty of those around for good money. So, if you’re goal is to fly jets for not very much capital outlay, it’s a viable option. Service and parts availability is cheap on these. But you have to be prepared to be the aircraft’s last owner. You will not be able to sell the plane for other than parts at the end of it.
As a side, with mandatory ADSB looming 2020 here in the US, and a potential recession as well, you’ll see a lot of bargains in the next 5 years, is my prediction. Very few owners are going to spend $20-100K on ADSB and panel upgrades to accommodate that for older aircraft.
AdamFrisch wrote:
Very few owners are going to spend $20-100k on ADSB
Why on earth is ADSB so expensive? Most jets have WAAS GPS anyway or some have 530/430ties which can be upgraded and a transponder? Getting ADSB-out on my plane was probably one of the least challenging things I’ve done.
Other than that, yea, that is what happens. Recently I saw a nice 501 eagle conversion with F44’s on it. 2500 NM range would you believe. Now that one I’d be very interested. It has some 3000 hours remaining and those can be extended via programs on which the plane was. Apart, I just love those 747 style flight directors of old in the 501.
The Sierra Eagle conversion 501’s are nice and have great performance. But in a way you eliminate the bargain option by going Williams. You simply can’t keep a Williams-powered aircraft off program. And if you’re already paying for the 150hr minimum a year, it’s pretty tempting to perhaps do so on a newer airframe.
ADSB isn’t so expensive in itself, but at the jet stage, you need STC’s in place by third parties to install it, whereas on smaller planes those are often done by manufacturers themselves. So it tends to add up. And if by chance you get your hands on later models with integrated avionics, like an aircraft with ProLine 21 for example, you’re looking at $100K+ to comply with Collins. On those aircraft, you can’t just stick a little Lynx in there and call it a day – it has to be integrated. That’s why, the old steam gauge jets will probably be a lot cheaper and have more options for upgrade, than the integrated ones going forward.
There are a lot of ProLine ships out there that have not had ADSB installed and where the airframe is getting to the point to where the owners are probably thinking really hard about if it’s worth spending those $100K to do it. They’re either going to have to spend it, to be able to unload it come 2020, or if they don’t, they’ll have to he prepared to discount the sale very heavily after that date. This might create an opportunity for the bargain hunters.
AdamFrisch wrote:
ADSB isn’t so expensive in itself, but at the jet stage, you need STC’s in place by third parties to install it, whereas on smaller planes those are often done by manufacturers themselves. So it tends to add up. And if by chance you get your hands on later models with integrated avionics, like an aircraft with ProLine 21 for example, you’re looking at $100K+ to comply with Collins. On those aircraft, you can’t just stick a little Lynx in there and call it a day – it has to be integrated. That’s why, the old steam gauge jets will probably be a lot cheaper and have more options for upgrade, than the integrated ones going forward.
If looking at a non WAAS CJ with Proline 21 it is roughly 150k to get WAAS and ADS-B
JasonC wrote:
roughly 150k to get WAAS and ADS-B
For that kind of money you can get a Chieftain with full glass, 2 × WAAS, ADSB In and Out, Radar, Certified Glass engine instruments, Connext Weather and Telephone, beautiful leather interior.
Suddenly makes twins look a little more affordable 
How is that 150k figure broken down?
It is roughly $120k for WAAS as that requires a completely new FMS and GPS receiver. Remainder for the ADS-B out.
