Depends who you talk to, if you are a buyer with cash in your pocket, it just may well be a buyers market. In fact, this might not be just a buyers market; it may be a great time to buy an aircraft. Just look at the price trends of the general aviation fleet.

Although, at this time, many of the aircraft advertised appear to be over priced compared to what the “book” values are showing. This would be an indication that the sellers probably purchased their aircraft over the past few years when there was tremendous growth in the market (not only aviation but also the stock market) and now that both markets have slowed down, the sellers are reluctant to lower their prices for a sale and risk losing money. Sellers will not see a loss until they sell the aircraft. If they can hold out and the market turns around, the book prices should increase and they will be in a positive position again. Although past performance is not indicative of future performance, aircraft have almost always been a better investment on the long term than most stocks.

Additionally, low interest rates will allow sellers to keep a higher price. With low interest rates the seller can always remind the buyer that the monthly payments, even for the higher value will still be low.

One way to check prices is to look at the ads on Barsntormers.com and check the book values. The Vref base value takes into account the average number of hours that the aircraft should have on the airframe and engine at the time of sale. The base price also includes a standard radio package for the model and an average condition. That is probably representative of over 75 percent of the aircraft on the market. So the base price is probably representative of over 75 percent of the aircraft for sale. The price can be increased for low engine time and low airframe hours, but at the time of the sale, it all seems to balance back towards the base price. A plane with a low total time, 1,500 hours, will get an increase in value for the hours. But if the engine has 1,500 hours on it also (and a 2,000 TBO) the book will reduce the value for the engine hours over the halfway point of 1,000 hours. Typically, the value of the engine per hour is higher than the airframe per hours.

Of course, if you have an aircraft that is loaded with all kinds of fancy modifications or avionics, the price will probably not be close to the base book values. But on the average, basic book values are going to be pretty close to the final selling price.

A random sampling of a couple of popular aircraft indicates that the average retail book prices are dropping. The sample included the 1975 Piper PA28-151 and the 1977 Cessna 172. Both aircraft are popular and affordable. But, the book values are indicating that these models have dropped 15 – 20 percent in the last 12 months. This price drop seems to coincide with the housing market and sub prime mortgage problems.

Even with the mortgage problems, fluctuations of fuel prices and even the long term fear of user fees the used aircraft market is still good deal. It’s true, not everyone will be shopping for 30 plus year old aircraft, but don’t worry, even the newer models have dropped in book value, making them a good buy. For example, the 1997 Cessna 172 has dropped a little over 7 percent and the 1995 Piper PA28-161 (close relative of the 151) dropped over 12.75 percent in the last 12 months. Like any other market cycle in the aviation industry, good planes sell for fair prices.

With the opening of new general aviation markets like China and the weak US dollar, the door for aircraft exports may be opening again. That should help stabilize the used aircraft prices.

If you are a seller and own the aircraft at a higher then book price your only options at this time are to hang on to the plane or take a loss on the sale. If you are the buyer, you just might be able to name your own price.

By Contributing Editor: Scott "Sky" Smith.
Sky Smith Insurance Agency.