Host: Jason Zilberbrand, President of VREF Aircraft Value Reference & Appraisal Services

Introduction

Jason pulls back the curtain on aircraft valuation—what it is, what it isn’t, and how bad inputs (or bad actors) can warp the number you’re relying on. Building on Episode 2 (bonus depreciation myths and popularity traps), this episode shows exactly how to value an aircraft and how the new VREF software makes the process transparent, defensible, and repeatable for buyers, sellers, brokers, lenders, and insurers.

Topics Covered

1) Why Aircraft Valuation Is Harder Than Cars, RVs, or Boats

  • Small fleets, unique histories, and limited public sales data.
  • “Comps” without context are dangerous—closing numbers rarely reveal the real configuration, condition, or concessions.

2) The Good: A Correct, Defensible Valuation Workflow

  • Enter the fundamentals correctly: airframe time, engine time since overhaul, accurate TBO (now fully editable in VREF), program status (on/off), paint/interior condition, avionics, and STCs.
  • VREF outputs multiple value types: Fair Market (Retail), Wholesale, Orderly Liquidation, Forced Liquidation, Inventory, Scrap—with clear use cases.
  • What each means (plain English):
    • Fair Market (Retail): USPAP/IRS/ASA-defined “willing buyer/willing seller” in open market—this is the everyday benchmark.
    • Orderly Liquidation: distressed sale, broker has time to sell post-default/repo.
    • Forced Liquidation: auction-level distress—sell fast, get what you can.
    • Inventory Value: dealer carry-cost perspective (e.g., ~90 days).
    • Wholesale: multi-unit discount or special-use/soft markets; use sparingly for common aircraft.
    • Scrap (not Salvage): raw metal value if no productive use remains; salvage/parting-out is too variable for software (consulting required).

3) The Bad: Common User Errors That Skew Values

  • Missing overhaul status or using “top overhaul” in the major overhaul box (don’t).
  • Forgetting to toggle engine program coverage.
  • Over-crediting avionics or double-counting options (e.g., Cirrus SR22 GTS options applied twice).
  • Skipping the condition tab (leaving $50–60k on the table on pistons with fresh paint/interior).
  • Not crediting factory reman, hot sections, or midlife on turbines.
  • Confusing asking prices with actual market (throw out the extremes; many listings are aspirational or strategic).

4) The Manipulated: How Numbers Get “Bent”

  • Inflated condition adjustments, double-dips, and manual entries to force a target price.
  • Presenting “VREF” valuations on aircraft VREF doesn’t track (yes, that happens).
  • Rule of thumb: sellers inflate, buyers deflate; truth is usually in the middle.
  • VREF advantage: the math is visible—bad inputs produce obvious, traceable outputs.

5) Avionics & Mod Depreciation (What the Market Really Pays For)

  • Avionics behave like consumer electronics: buyers pay for capability, supportability, integration, not original install cost.
  • Integrated suites hold value better than “Frankenstein” panels.
  • Not all STCs depreciate the same:
    • Airframe/mission mods (FIKI/TKS, winglets, strakes, floats, engine STCs) retain more value—don’t over-depreciate.
    • When in doubt, use sensible defaults in VREF (and bump recent installs).

6) Baseline Equipment & Editing in VREF

  • Treat VREF’s baseline as a starting point—adjust avionics/equipment to match the airplane.
  • Use the database to set fair deductions/credits; avoid stacking duplicate options.

7) When to Use Wholesale vs. Retail

  • Wholesale for multi-unit deals, special-use fleets, very soft or long-sitting assets—not as a shortcut to undercut a normal retail transaction.
  • Timing matters: end-of-quarter markets can move—ask VREF if something looks off.

8) Valuation vs. Appraisal (Know the Difference)

  • A VREF valuation report is a data-driven estimate, not a USPAP appraisal.
  • For financing, litigation, IRS or formal opinions of value, get a USPAP-compliant appraisal from VREF.

How the New VREF Software Changes the Game

  • Editable TBO (finally), engine program toggles, condition controls, and granular avionics/STC modeling.
  • Multi-value outputs (Retail/Wholesale/OLV/FLV/Inventory/Scrap) in one place.
  • Transparent math: inputs → outputs you can defend with lenders, insurers, clients.
  • Built by appraisers for daily appraisal work—now in your hands.

Key Takeaways

  • Correct inputs = credible outputs. Most “bad” valuations are input errors, not market mysteries.
  • Don’t mistake listing prices for market value. Verify with data, condition, configuration, and current macro trends.
  • Avionics & STCs aren’t equal. Integration and mission-driven mods command better retention.
  • Use the right value type. Retail for normal transactions; liquidation/inventory/wholesale only when appropriate.
  • When stakes are high, get a USPAP appraisal. Valuation for the sniff test; appraisal for the signature line.

What to Do Next

  • Owners/Operators: Run values before insurance renewal or sale; don’t over- or under-insure.
  • Buyers: Use VREF to spot manipulated asks and pay the right number.
  • Lenders/Insurers: Standardize on a defensible baseline; flag mismatched inputs instantly.
  • Everyone: If a number looks wrong, check inputs first, then contact VREF—Jason@vref.com.

Closing & What’s Next

This episode covered the Good (clean, defensible process), the Bad (common mistakes), and the Manipulated (how numbers get bent—and how VREF exposes it).
Next episode: Damage History—Real War Stories & Real Costs. What matters, what doesn’t, and how to price it correctly.

Subscribe to the podcast on your platform of choice and check out the new VREF software at vref.com.
Want your aircraft featured in a live valuation walkthrough? Email specs/photos to Jason@vref.com.