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Damage Information
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!
Most price guides simply deduct a fixed percentage from the total
aircraft value. As is this example, most damage events only affect
one or two items, e.g. landing gear, wing, propeller, windshield,
etc. and most 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. But still 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!
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!
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