Prices seem to be fairly stagnant at the moment. There is a lot of high end stuff which is not selling.
Don’t be afraid to lowball, you might be surprised what you get away with.
johnh wrote:
It depends what you mean by FLs
Hi John! You are correct: I should have specified. I meant in the “upper teens” or low “twenties” .
Of course if you rarely operate up there then your cylinders will last much longer. I think this is more important than TN vs TC.
It really depends on your usage.
Of course the OP will have to figure that out but as shown by @Peter, for the occasional bimble above FL150 it can usually be done with a TB20.
IO390 wrote:
Prices seem to be fairly stagnant at the moment
Looking at current economic trends and interest rate levels, I am somewhat surprised that prices are (still) fairly stable. Not that I expect our average plane to be financed, rather expecting financial pressure on households in general and thus the beloved aircraft being put for sale… Hence, indeed playing lowball, or waiting some months for the selling pressure to increase?
Yes definitely think prices should be lower especially when i see so much stock thats been around for a long time, and sellers not being realistic YET with the price. Used cars have come off significantly (we talking 30-40%) in the past year. Perhaps planes are slower to follow the trends as its a much more illiquid market – but I am humble about my knowledge in this as im fairly new in this business. As for interest rates and economic trends, even if a plane is not financed, the opportunity cost for cash is now 5-6%, even higher if you take a tiny bit of risk, so its a difficult environment for assets that are so expensive to run. Nevertheless, if we dont get a recession, its unlikely for stuff to come off aggressively in my view. Simply because people who own planes generally wont be stressed sellers unless theres something real bad going on.
My other issue valuing an aircraft is that i cant see the historical price (and in any case aircrafts are not ‘fungible’ assets so difficult to track price) – very annoying for someone that looks at price charts all day! Its also a very inefficient market – for example – a plane in europe could be priced very differently to one in the uk just because there may be a few uk buyers who cant be bothered to buy the european plane/register it/respray it etc etc.. and thats just barely scratching the surface.
A couple of guys in our club follow the used airplane market quite closely and they report a gradual softening. Nothing very dramatic so far and given the state of the US economy I don’t think we’ll see a crash, rather a soft landing, to stay with aviation terminology ;-)
What may well contribute to the price resilience is what I would call ‘fake sellers’. By which I mean people who are nudged to sell the airplane by their family, but have no real interest in doing so. They then turn around and say ‘ I’m trying, but nobody’s buying!’
US economy is on fire indeed. Its a bit more uncertain in the UK. Mainly because mortgages are generally 5years vs 30years in the US. US consumers also mostly reset their mortgages when rates were near 0 so are insensitive to interest rates. As for the UK, 2024 is where it starts to hurt because around 40pct of all fixed rate mortgages reset this year.. likely from 1-2pct area to anywhere between 4.5 and 6.5. Big hit.
It has always gone on. I suspect a lot are divorce (or just pressure from spouse, like “you are a father now; it’s time to stop this risky hobby”) situations.
In the TB20 sphere, most owners in Europe are financially comfortable. Interest rates and mortgage rates won’t affect things. In fact I would bet most TB20/21 owners are totally paid off. In the US, quite a lot of people buy planes with loans.
Makes sense – aircraft owners probably have a lot of cash around as well. But nevertheless businesses which people own/work in will be affected by rates.
Random question – if I bought an F reg whose EU vat was paid pre brexit, would I have to pay uk vat on it?
@Rami1988 import VAT would be payable.
Brutal!
