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!
As a seller
you would want the appraisal to take in account that the aircraft has
been repaired correctly and it is just as flight worthy as the
unaffected aircraft. As a buyer you would want the appraisal to
accurately account for the mishap. Where most price guides simply
deduct a fixed percentage from the total aircraft value, the NAAA
system correctly analyzes all aspects of the aircraft’s history and thus
satisfies both the seller’s and the buyer’s requirements. Most damage
events only affect one or two items, e.g. landing gear, wing, propeller,
windshield, etc. where as the major 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! Nevertheless, 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! . At Just Plane Appraisals we make a fair assessment of the
aircraft which takes in account all of these factors.
The marketplace decrease in value depends on the type of aircraft,
the extent of the damage, and the method of 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. The NAAA analyzes the current market for
each particular type of aircraft when calculating value reduction for
the type of damage incurred. The values of unrelated components
are not affected. This approach is based on the NAAA's experience
in tracking the aircraft market since 1980 and from performing literally
tens of thousands of Certified Aircraft Appraisals during this period.
This difference between the NAAA and the other methodologies can
translate into a BIG difference in the real value of your aircraft. Only
NAAA appraisers have access to the computer software and data bases to
properly account for the impact of historical damage.
Ask your appraiser what method he
uses to calculate damage history. If it is not the system
described above, walk away!
