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Is this the WORST time to buy an airplane?

Posted: Sun Nov 23, 2008 2:44 pm
by Vertolet
So I loved hearing Dave's encouraging words at the start of #107 about this being the absolute best time to buy an airplane, as I myself have had this goal deep in my sights for a while. But if we're talking about the economy and where things are going, are we being too optimistic to buy an old plane now? Sure, it's a better time now than 5 years ago, but what about 5 or 10 or 15 years from now?

The auto industry is scrambling to change it's ways and convert to hybrids, electrics, and fuel cells. But GA isn't. If fuel goes back up, perhaps even to $12 a gallon or more (is that really unlikely in 15 years?), then wouldn't the value of these older light airplanes continue to decrease? Perhaps the key here is to avoid being the one registered as owner when the music stops...

Or am I wrong, and the fact that there are no alternative-fuel airplanes means that avgas will stick around forever and old planes will hold their value?

Re: Is this the WORST time to buy an airplane?

Posted: Sun Nov 23, 2008 5:18 pm
by champguy
The reason to buy an old plane is for the love of the plane. Find the one you want, it is part of who you want to be. All other "problems" will work themselves out just as surely as the ground falls away and the blue sky beckons.

Re: Is this the WORST time to buy an airplane?

Posted: Sun Nov 23, 2008 6:47 pm
by jackhodgson
As for $12 gasoline. I subscribe to the theory, based on some research I heard about, that auto gas is unlikely to get much above $4-5 in 2008 dollars, because that is the price at which alternatives start to become economical. Maybe that's wishful thinking, but it comforts me.

-- Jack

Re: Is this the WORST time to buy an airplane?

Posted: Mon Nov 24, 2008 12:02 pm
by champguy
Way back when I was a wee lad, and people seemed to still lke me, gas was 25 cents a gallon. I remember it well because so was a hamburgur at the ski resort I would be sent off to for the day. The rest of the story, It cost just a buck to keep me happy for the day. A cheese burger, fries, and a vanilla frappe made a fine lunch for an actiive kid. Try eating a good lunch at a resort for the five bucks we are spending today for 100LL.
If the airplane you need exceeds the budget you have, it is a lot easier, and more fun, to lower your expectations that to increase your earning power. Hard work just makes a kid dull.

Re: Is this the WORST time to buy an airplane?

Posted: Mon Nov 24, 2008 1:37 pm
by Dave Higdon
Vertolet...can't fault the concern, not one fact, I may be a little premature to say "now" is the "best" time to buy; the way things are going, buying may be even better in six months or a year. Which raises the very valid question about whether the bird you buy today will fetch as much in a year...same question could apply to real estate, a business, heck, even a real-estate investment.

But it's still my plan to act on my buying aspirations as soon as the financial stars align for us, with only a small nod to the prospect of avgas-supply and avgas-price issues...let me explain -- and Champguy's take is a part of my logic.

Right now my biggest nod to the price of fuel is in weighing the Comanche we try to buy: another 180 or a 260. The former, we learned with our last bird, can be upgraded and improved to give us about 140 knots and take from us less than 10 gph; a 260 would need to burn around 12 gph at 170 knots to provide equal fuel efficiency...but, as a friend noted, slowing down always improves fuel efficiency. So go slower, go farther on the fuel. That's about it for my mental debate.

As for the value equation, the plan is to buy what will do the job for what we need -- a partially subjective, partially objective set of parameters. On the subjective side, a 250 Comanche would do -- but like the two additional cabin windows on the 260 and, on the 260C, the modernized cowl. Otherwise, pretty much all Comanche models will fulfill our distance and load needs...

Resale of a long-term item comes less into play from our perspective. We know -- even in a good market -- you're not apt to get out of an airplane all the value you may put into it, but you can often get back a good part of the value you add.

But your root concern, values continuing to fall, isn't as likely as you may worry, in my view, once the economy stabilizes and the world's financial footings return to a growth mode -- and no predictions on when that might be.

Values right now are depressed by the large number of units for sale, a reflection of an aging pilot population and changing priorities; a number of older pilots I know are no longer doing the kind or amount of flying they feel they need to justify owning the planes they have; many are moving to LSAs, partly because of that change in their flying habits, partly due to concerns about passing their next medical...

Fuel prices, as you've likely noticed at the car pump, are back down -- way down; Avgas prices will drop, too, but not as quickly; avgas will not necessarily be around forever, either -- the lead content in 100LL continues to make it a target for elimination; suitable alternatives will arrive, but probably at a slightly higher cost...but as long as they work, pilots will buy because so many or our GA aircraft are worker bees in one industry or another, and we're still a ways out from the engine makers and airframe makers moving into powerplant and fuel systems that can share the ground-fleet supply...

And flying will continue to hold a strong appeal to a lot of people for personal transportation, and continue to have a role in business, commerce and many utility roles because GA aircraft are simply the best tools for the mission.

My wants and needs come down on both sides of the use equation -- business, primarily, and personal, additionally. But what we eventually buy will be with both eyes open to the whole costs equation, ownership, insurance, maintenance, parking and operation, on a long-term basis.

And if it is only worth as much as I paid when it's time to get out -- I hope not for at least a decade or so -- I'll be a happy camper because in those years it gave me utility and pleasure by getting me from Point A to Point B in a speedy, convenient fashion...with a great view, no TSA, no lost bags, and no bumps.


Re: Is this the WORST time to buy an airplane?

Posted: Tue Nov 25, 2008 3:10 pm
by Vertolet
Thanks for the insight, guys. I guess I'd be more concerned about avgas availability than resale value... as stated, one doesn't buy an airplane because it's financially justifiable. :lol: Myself I'd view aircraft ownership as a way to think beyond a 2 1/2 hour radius from the rental airport. If the airplane was already mine I'd want to do cross-country flight that actually CROSSED the country!

But this does bring up an important question. What is the long-term future of GA? Will people still be flying small aircraft in 30 years, and if so, will they be filling them with AVgas? Are we going to build more airports or continue closing them? What can our community be doing now to preserve the things we love, and prepare for the changes that are inevitable? (Not to mention those 'flying cars'! :D )

Just playing Devil's Advocate in the interest of hearing your thoughts...
Myself I'm glad I was born in the 20th century - one less and I might not have ever been able to leave the ground...

Re: Is this the WORST time to buy an airplane?

Posted: Tue Nov 25, 2008 8:20 pm
by champguy
You can head across the most empty parts of the country and find gas at 100 mile intervals with cardlock. Two hour hops even in my Champ and I've passed up one stop and have a choice for the next.
There is a reason for this. The smaller the town, the more they know they need their airport. In small towns people know each other, work together, and depend on 2nd day UPS and medivac. Someone gets rushed out and everyone knows who and why.
While there are larger towns with development pressure, there is always another choice nearby.
Whether your interest is recreational or business, antique, classic, or go-fast, this country is awash with opportunities, particularly now.