is the Real effect of Damage
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
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!