Because the average age of used aircraft is exceeding 30 years, damage history is showing up in more and more logbooks. The decision to buy an aircraft with damage history is a personal decision. Buying one that has been damaged can be perfectly OK if the damages and repairs are documented and the price of the aircraft has been properly discounted. Here are some considerations:
1. What affect does damage history have on the value of an aircraft?
Let’s face it; a damaged aircraft is harder to sell and worth less than an aircraft without a damage history. Many factors can come into play here, and they can have a direct bearing on the market value of an aircraft. Without proper research, these factors could prevent calculation of a fair market value for a particular damaged aircraft. To many prospective buyers, damage history is one of the most important factors when buying an aircraft. The prospective buyer will want all information about the damage, and guess what: you will get to explain it all to him or her!
The severity of the damage and the time since the repairs have been made play a big part in determining the loss in market value. If major repairs have been completed recently, there are always concerns about the airworthiness or the structural integrity of the aircraft or its components. If the repairs were made years ago, the importance of the damage (and the amount of deduction) diminishes because confidence in the airworthiness of the aircraft is now a lot higher and the concerns about hidden damages are less. Would you want to fly an aircraft that has just had major work done on it? When deciding upon two comparable aircraft, with the price of the aircraft the same, most people would rather buy the aircraft with no damage history. Therefore, to sell the damaged aircraft, in this case, one would need to lower the price.
The only way to accurately determine the fair market value of a damaged aircraft is for an experienced appraiser to make an on site appraisal of the aircraft, compile all available information about the damage, then analyze the current market for that particular aircraft model.
2. What is considered to be Damage History?
There are many ways that aircraft get damaged, and how it happened is the subject of lots of hangar talk sessions. I have seen aircraft that have been damaged by bears wanting to get food out of them, by cows chewing up the fabric covered tail feathers, and by shipping containers. Murphy’s Law is in full effect when it comes to damaging aircraft…if it can happen, it will happen, and for all kinds of reasons.
Although there are many gray areas as to what constitutes
damage history, it may be defined as “any history of an accident or incident
where the structural integrity or airworthiness of the aircraft or the engine
has been compromised”. Hangar Rash usually does not count because, once the repairs are made or the component replaced, the aircraft is good as
new. Generally speaking, damage obtained when the aircraft is at rest, rather
than under power, is considered to be less serious.
3. What should I look for to uncover Damage History in an aircraft?
The first defense would be to have a licensed A& P look over the
aircraft and log books for telltale signs of damage. Logbook references to hard
landings or major over hauls on low time engines are good clues to hidden
damage. Sometimes engines that have been overhauled at significantly less than
TBO, means that there was a prop strike and possibly other related damage
(landing gear, vertical stabilizer, rudder from ground loops or flipping up side
down).
Another way to uncover damage is to look at the 337 forms
that are required to be filed with the FAA when major repairs and alterations
for the aircraft has been made. These 337 forms, required to become part of
the maintenance history of the aircraft, are, unfortunately, sometimes conveniently “misplaced
or lost”. Because they are under the scrutiny of the FAA, 337 forms usually
show more details about the repairs made than the log book entries. Be sure to
check out the back side of the 337 form and read the Description of Work
Accomplished .
Overlooking damage entries in the logbooks can be very expensive. Sometimes logbook entries are written in such a way as to downplay major damage. For example, an entry that a landing gear box was replaced could mean that the aircraft gear was damaged or completely knocked off the aircraft in a ground loop!
The average buyer or seller will have a tough time uncovering some of these damages. That’s why I recommend a good pre-buy inspection and a certified appraisal done by a NAAA appraiser.