Do you still believe that damage to an aircraft has about the same effect on its value as a car?
Think again.
There are numerous complexities involved with aircraft damage that are outside the scope of determining a car’s value to truly compare. This has the potential to mean that in the event of an accident, your insurance may not be willing to cut you a quick check.
Explore one of the many answers to the question, “what’s the impact of damage on aircraft value?”
Need an aircraft appraisal? VREF is the trusted appraisal resource for the AOPA.
What You Need To Know About Diminishing Aircraft Value
Occasionally, you may see an aircraft listed for a price that looks too good to be true. It may not be. But if it is, it’s possible that an aircraft that’s selling for far too low when compared to the rest of the market has damage.
Here’s what you should know about the diminution of the value of an aircraft because of damage.
Defining Damage To An Aircraft
Damage on an aircraft is too broad to assume its direct meaning. There are a few questions you need to ask before making an assessment, such as…
- Is the damage static or dynamic?
- Is there structural damage?
- Who did the repair and was it done properly?
Static damage is caused while the aircraft remains stationary. Dynamic damage is caused while the aircraft is moving or in flight. The difference between the two is critical as damage caused to the same area differs in severity depending on its movement or lack of motion altogether.
When it comes to structural damage, certain parts of the aircraft are more durable than others.
Then, knowing who performed a repair and whether it was done accurately and successfully will also have an impact on an aircraft’s value. Repairs from an OEM-approved facility that’s logged correctly will likely hold more worth than repairs done by a local shop without the highest level of certification to perform such repairs.
Why Damage On An Aircraft Matters
With each of the above points in mind, it’s important to be aware of any and all damage to an aircraft, especially in hot markets. This is largely due to the fact that many viable aircraft are usually sold fast and occasionally entirely off-market. But as a hot market continues to leave less desirable aircraft with a history of damage for sale, buyers are more inclined to ignore that history as frustrations to purchase a plane grows. This causes some buyers to settle for a plane that wouldn’t normally sell so quickly without some serious hesitation attached.
RELATED: Watch VREF’s President Jason Zilberbrand’s seminar ABS ‘Damage History Aircraft Safety / Value’
Is All Damage The Same?
No, all damage to an aircraft is serious but has various impacts on its monetary value.
VREF’s President Jason Zilberbrand works on anywhere from 150 to 200 aircraft damage cases a year. When diminution of value is the primary subject matter, his process relies on classifying damage to an aircraft using the following categories:
Non-Deductible Damage
This type of damage is both caused and repaired by the manufacturer. As an example, a wingtip that is damaged while being serviced by the manufacturer but is replaced like new by that same manufacturer may not have a big impact on the value of the aircraft itself.
Superficial Damage
Dings, hangar rash, or other cosmetic damage can be considered superficial damage. Depending on its severity, some parts may simply need to be repaired while others may need to be replaced. Part replacement is what takes this level of damage a step above non-deductible damage as far as seriousness. This type of damage is typically mitigated and doesn’t usually have a noticeable effect on an aircraft’s value.
Minor Damage
A fair amount of damage on an aircraft will fall into this category. Minor damage, such as a prop strike, can usually be repaired. But there can be a fine line between minor and superficial damage. It is up to the aircraft appraiser to determine its severity.
Moderate To Major Damage
Damage that is considered moderate to major can be deal-killers for potential buyers. Moderate damage can be but is not limited to incidents where components of an aircraft are damaged due to, for example, a hard landing. The impact on aircraft value depends on a few factors. For instance, moderate to major damage can be dynamic or static while also containing various levels of complexity based on logbook activity and information on the proper Major Alteration or Repair form needed for this level of damage.
Research on your part as a potential buyer is important at this point. It’s critical to know how severe said damage is for that particular make and model of aircraft. This is because it’s possible that you’re looking at an aircraft with a history of similar damage that can be traced throughout its same series, production year, etc. You might be able to offset a particular incident if it appears to be a common occurrence for that particular make and model.
Furthermore, it’s vital to have as much detailed information as possible from other resources, if available. As an example, the FAA database, Kathryne’s Report, and other databases that maintain damage records and information can be helpful when making a buying decision.
Extensive Damage
Major structural damage is considered extensive. At this stage of damage, it’s important to understand 3 things:
- Repairs done
- Who performed the repairs
- Extracurricular maintenance procedures needed for the future
Additional required maintenance because of an aircraft’s damage history can be where potential buyers back out of interest due to the extra steps and costs associated with following the right procedures.
An airworthy aircraft does not necessarily mean there won’t be additional maintenance needed on top of its routine maintenance.
Find trusted ASA Accredited Appraisers for your aircraft at VREF.
How To Preserve The Value Of Your Aircraft
The following suggestions can best preserve your aircraft’s condition and performance to keep most of its value intact.
- Keep your aircraft stored properly to avoid potential damage.
- Exterior elements can lead to aircraft killers like corrosion.
- Consider joining a maintenance program to feel confident that your aircraft will be taken care of regularly and by an experienced team you can trust.
VREF Is Your Trusted Aircraft Appraisal Company
Damage to an aircraft is a permanent blemish on its pedigree, which means it’s important to be careful when shopping around. From your initial research to doing what you can to have all of the information you need to make an informed decision, VREF is where you should start when searching for aircraft appraisal services.
