Depreciation of a new airplane / hour ?


#1

Hi, i’m planning to buy a used Mooney from a friend it has around 500 hours, it’s from 2005 and has G1000 De-icing and LR tanks.

Is there a way to calculate what the depreciation is of this bird, and what can i count in minus for each flown hour ?

He would sell it for 400k$, it’s around 500k$ 2008 new, should i go for the new ?


#2

What’s the Mooney warranty on a new aircraft worth to you?

(Go for the new!)


#3

Auch, that’s a good one!


#4

In the US (and many other countries), there are two different types of accounting depreciation on capital assets like an airplane. There is the tax depreciation and the book depreciation. However, from your question, I’m thinking that you may mean a third number, which is what is likely to be the actual change in value of the plane each year that you own it and is $400,000 a fair market price for a 2005 Mooney. That is a market driven number and there is no good way to forecast it into the future.

For a long period of time in the past, many airplanes held their value or even increased in value over time. In the past few years that has changed pretty dramatically, mostly due to the large number of used Cirrus planes coming on the market in my opinion. Here is some real data: VREF

If I were in your shoes, I would look at several resources including VREF as well as talk to someone who has experience buying and selling Mooney’s who can give you up to date market information.


#5

I tell you what. If you are looking for used plane, look at a Cirrus. There are so many of them around. And we all know supply and demand. So the prices are really low

Mooney’s hold there value very well. Just hope they dont go ch. 11 or ch. 7 :open_mouth:


#6

I hope you’re joking right ? I don’t want the plastic Cirrus shit, and i rather keep my wings on in flight, also if i get into ice, i would rather get out of it, almost impossible with Cirrus, those legs are picking up ice like hell!! There is a reason why they are many at low price, cirrus is also limited in airframe lifetime.

What do you mean about chapter 11/7 ? Are their situation as of today tricky ?


#7

Chapter 7/11 is bankruptcy, running out of money, kaput. I would say that every small aircraft manufacturer’s situation is “tricky” as of today with the exception of Cessna. Piper, Mooney and Columbia have all been bankrupt at one point. Adam aircraft is teetering on the brink. Socata has stopped making piston aircraft. Even Cirrus would have been in trouble if not for repeated financings. The good news is that even when the companies go bankrupt, they still support their fleet with parts, which is a very profitable business.


#8

I know, but what is the situation of Mooney today ? As your assumption was they might have a problem ?


#9

As CAFlier mentioned, aircraft values are market driven and just like anything else, it’s only worth what someone is willing to pay. Mooney has had a rough financial ride over the last two decades with several bankruptcies and financiers. Columbia was struggling and it’s assets were acquired by Cessna. Given the current economic environment, my feeling is that you’re going to see an increase in smaller aircraft resale inventories, a decrease in values, and a reduction of new light aircraft deliveries. I’m hoping that I’m wrong…or at least that the downturn is mild and short-term.


#10

So it’s really hard to give a price tag on a used plane, except what the market is saying, that means, the price it’s being sold at… and that we only know when it’s sold :stuck_out_tongue:


#11

I would say that you can do a reasonably good job of establishing what the current market value is for any particular plane, but very difficult to say what it will be worth a year from now. There are enough comparable airplanes sold to get a pretty good fix on the Mooney that you are looking at. As one data point, I ran a Vref for a 2005 Mooney Ovation M20R with 300 hours total time, TKS, Oxygen, Stormscope and Wx data link and got back a value of $374,631.87. That would be the sales price, usually through a dealer, so buying direct from an individual would be a little less.


#12

Great info, thanks, really appricated and very helpfull in my situation now :slight_smile: Should i worry that the early G1000 systems are prone to expensive faillures out of warranty ?


#13

I hope you’re joking right ? I don’t want the plastic Cirrus shit, and i rather keep my wings on in flight, also if i get into ice, i would rather get out of it, almost impossible with Cirrus, those legs are picking up ice like hell!! There is a reason why they are many at low price, cirrus is also limited in airframe lifetime.

**What do you mean about chapter 11/7 ? Are their situation as of today tricky ?/**quote]
They have been in bankruptcy twice (I think??). Generally, the value of the plane will decrease a lot in this situation. The reason I think they are in trouble is because you have the Cirrus, Columbia (now with cessna to finance those planes), Piper, and Diamond all innovating and Mooney’s numbers for shipments are low. Now they are definently smaller, but I don’t how they can make money selling less than 20 planes per quarter. In the future, you will most likely see these heavily backed (financially) innovating more and more. Mooney doesn’t have the money to keep up and I believe they don’t have a future beyond 5 years (especially with the current state of the economy).

Even if they ceased to exist, there are enough Mooney’s out there that some one would produce parts.

A positive is that as of now, they hold their value well, and are rock solid with regard to reliability.


#14

What a sad story… does anybody have any idea how much money % an GA airplane maker makes ? 20% margin ? 40% ??


#15

The reason that so many of these companies end up going bankrupt is that they end up making 0% (or less) on a cash flow basis (not to reopen the debate about accounting earnings and cash flow again). I’ve seen P&L forecasts from some small plane manufacturers and they are typically looking at 10-20% net margins (after all sales, marketing, overhead, etc.)


#16

Could somebody living in the USA do a quick credit check on the Mooney airplane company ? Or look into their balances ? I dont know for the US but in Europe every company has to make some numbers public… and it’s easely viewable in the EU … same in the US ? thanks


#17

Here it is for 2006, not a pretty picture (assets of $23 MM, liabilities of $65 MM):

sec.gov/Archives/edgar/data/ … _10qsb.txt

Shortly after this filing, Mooney was taken private and is no longer required to file these financial statements. If you are interested to learn more, you could pay a credit agency to give you a full credit report.


#18

Garmin’s warranty is less than 5 years?

…Yep, I see from their web-site that their panel mount equipment is warranted for 2 years from a/c purchase.


#19

But I thought glass was going to save everyone $$$$ because it was less prone to failure.


#20

CAFlier, darned, that doesn’t look so good!!! Thanks for the information… aldo they have some planes on stock, they told me the have 4 planes ready for delivery without a customer yet…

I also PM’d you CAFlier…