Great Deals — Or Are They?
Searching the pages of Trade-A-Plane for great deals on used aircraft is a perennially popular pilot pastime, because everyone loves a bargain. But when an aircraft is listed for sale below its apparent fair market value, the seller almost always has a good reason. Here's how to protect yourself from getting stung.
At my home airport, there is always a copy of Trade-A-Plane sitting on the table in the lobby of the terminal building. The airport manager marks it "Lobby Copy — Do not remove." That single copy is probably the most widely read of all the periodicals (and there are many) that are left for the reading pleasure of those who come through our airport.
On the weekends it is passed around from pilot to pilot, and very often one will ask another what they think of a particular airplane that is listed in the For Sale columns for some aircraft make and model or another.
"Let me see it," one will say, and the paper goes to yet another pilot who will read the ad and offer his opinion of whether the airplane is priced high, low, or just right. Every now and then you'll hear, "Jim, this one's a steal…you'd better jump right on it!"
If you listen to these guys long enough, it becomes apparent that most of them are looking for bargain airplanes. Like many other people in the market today, they want to find an airplane that has low total airframe time, a recent major overhaul, fresh radio package, and a recent annual. If the price in the ad seems to be somewhat below the going market value of similar airplanes, that gets their attention right away.
To some people, buying an airplane is a game. But that game can go wrong very quickly after a bargain airplane is purchased if steps are not taken to insure that the airplane is really worth the money you are paying for it. Making a successful purchase is hard work and takes a lot of diligence and homework. The pursuit of the bargain airplane must be made in conjunction with the search for other airplanes of the same type. How else will you know that you are getting a bargain? An ad in T-A-P is not proof that an airplane is a bargain.
The case of the "stolen" Cessna 310
Many years ago, I knew a fellow who decided to buy a Cessna 310 for personal use. I don't know how or where he found the one he bought, but it was only two years old, had a great paint job, and the hour meter had recorded less than 100 hours total time on the airframe and engines. He bragged about buying it for pennies on the dollar, and at first we all thought he had "stolen" a good airplane. But as it turned out, that was hardly the case.
Shortly after the great purchase was made, he decided to lease the Cessna 310 back to the FBO I worked for to be used as a backup in the charter operation. As our director of maintenance developed the necessary information to get it added to our Part 135 Certificate, the whole story behind the airplane came out.
The airplane had been involved in an accident when it had only 38 hours on it. Apparently the owner, a low time pilot who bought the 310 brand new, ran it off a short runway into a drainage ditch. For some reason the insurance adjuster could not get to the site for two weeks, and ordered the airplane to be left in the ditch where it was sitting...despite the fact that the ditch was full of water!
The adjuster finally arrived at the accident site and declared the aircraft to be a total loss. Subsequently, an enterprising outfit bought it as salvage and repaired it. They put a sharp-looking fresh paint job on it, and sold it to our local bargain hunter. That's when the problems began.
What's wrong with this picture?
I got to fly the airplane on several charters, and never liked the feel of it. It did not fly at all like our other (never damaged) Cessna 310. And although it was well equipped with a slaved HSI and King avionics (instead of the usual Cessna radio package), we could never seem to get all the radios working at the same time.
Once I flew the airplane up to the radio shop because neither VOR receiver was working. The shop manager grimaced when he saw which airplane I had brought him. The reason for his displeasure was evident when he pulled the nav/coms out to work on them. The corrosion inside the radios was so bad that it is a miracle they worked at all.
The HSI failed on three different occasions while flying that airplane IFR, and I had to get no-gyro vectors from ATC until I was out of the clouds. After each incident the airplane went to the radio shop, but the problem kept recurring. Much later, it was discovered that the rear window leaked when the airplane was flown in rain, and the gyro was mounted on a shelf below and behind that window.
Finally, the airplane was taken off our charter certificate and returned to its owner, because we were spending too much time trying to get it fixed and not enough time flying revenue flights with it. The owner tried to sell the airplane but no one would buy it. It had been for sale for almost two years with no takers when it met its end in Cape Cod Bay. The owner was flying out to Provincetown, on the end of the Cape, when he reported a double engine failure. He ditched the 310 in the water, and got out before it sank. The Coast Guard picked him up.
The insurance company tried to raise the wreckage of the airplane but never located it. Without the wreckage there was no way to be sure what really happened. The investigation centered around the fuel system and the amount of fuel that was on the airplane. Our line crew had topped the main tanks before the owner took off. There was plenty of fuel aboard. The ditching occurred about 20 minutes after the aircraft left the airport.
Be sure what you're buying
Does that one experience mean that any bargain airplane you buy is going to be a "hangar queen?" Of course not, but whenever you locate an airplane that is priced well below the going market value on similar aircraft, you must take steps to be certain that you are getting your money's worth. An extensive prepurchase inspection is imperative, and it should include a thorough search through the aircraft's records to determine if the airplane has been damaged in the past.
The aircraft's total time in service (TTIS) should be verified during the log book research. I have had several owners tell me their aircraft were very low-time machines, only to find out they were simply reading the tachometer or Hobbs meter instead of tallying the time flown when other tachometers, since replaced, were installed. One airplane I appraised had 1,861 hours recorded on the tach, but when I looked through the logs I found it had been flown over 4,000 hours. When confronted its owner said he never looked at the logs.
An experienced buyer can usually tell that a 4,000-hour airplane doesn't look like an 1,800-hour one, and that was certainly the case with this one. But an old hog can be dressed up with new paint and interior to look like a low-time beauty, and if you are not paying attention you could wind up owning an airplane that you never would have purchased had you known the truth about it.
The status of the engine(s) can have a major impact on the value of an aircraft, and that's doubly true of a twin-engine airplane. Some people will claim the engines have been freshly major-overhauled, when in truth the engines were simply taken apart, cleaned up, reassembled and repainted. This practice is sometimes referred to as a "dip and ship overhaul," and it has stung many an unwary purchaser.
The case of the "dip-and-ship" Aerostar
The worst case of this kind I have ever run across involved an Aerostar that had been sitting unflown for a couple of years. Someone had removed the engines from the aircraft and disassembled them. The owner of the aircraft decided he wanted to sell the airplane, so he contracted with a friend who had an A&P certificate to complete the overhauls, reinstall the engines, and perform an annual inspection so that the airplane was legal to fly. According to a witness, all this work was accomplished over a three-day period.
The owner did not even test-fly the airplane. He had a buyer for it in Florida, so he took off on the first flight after the work was done, intending to fly the Aerostar all the way to its new home. He did not get very far.
Shortly after takeoff from Fort Smith, Arkansas, the pilot contacted the local radar controller for radar service out of the local area. A few minutes later the controller noticed a low altitude alert for the aircraft and asked the pilot if he was going to climb. The pilot stated that he was planning on climbing higher. But as the controller was terminating radar service, he noticed that the aircraft's altitude was still fluctuating between 1,400 and 1,500 feet.
It was then that the pilot advised that he had to return to Fort Smith. He told the controller that he had shut down the right engine because it was leaking oil. The aircraft's altitude continued to deteriorate and the airplane crashed into a small group of trees just a few miles short of the runway.
Investigators found many discrepancies in the engines. No O-rings had been installed in any of the induction pipes on the left engine. Metal contamination was noted in the oil when the rocker box covers were removed. Exhaust system flange nuts were missing for several of the cylinders, and metal contamination was found in the oil filter. The right engine's exhaust system was missing the hold down nuts for the #3 and #4 cylinders, metal shavings and filings were found in all the rocker box covers, no O-rings were installed in any of the induction system intake pipes, lint was found in the injector nozzles, the engine driven oil pump was contaminated with metal filings, the oil pump drive gear shaft was worn, holes were found in the #5 and #6 pistons, and evidence of detonation was found in all the cylinders.
Had the pilot succeeded in reaching his Florida destination, would the buyer have found the problems with the engines? Perhaps, if he had a thorough prepurchase inspection done. But we don't know if the buyer was planning to do one or not. After all, the airplane had "freshly overhauled engines" and was "just out of annual."
All logbook entries are not created equal
Just because the logbooks say an engine has had a fresh major overhaul, that doesn't necessarily make it so. If the overhaul was done correctly and logged correctly, there should be an entry detailing exactly what was done to the engine, what new parts were used, what parts were reconditioned, whether the engine was rebuilt to "new limits" or "service limits," and whether any of the pistons, cylinders or other components were undersize or oversize.
Some mechanics write down every last detail of what was done in the logbooks, while other mechanics seem to be afraid their pen will run out of ink. The engine overhaul entry for my Arrow's Lycoming engine is four handwritten pages long. Everything is accounted for including what outside vendors provided services such as overhauling the case and certifying the crankshaft and other parts. The mechanic carefully noted the total times on every accessory whether he overhauled them or not.
But even an entry like that doesn't mean that you can skip the prepurchase inspection. There still could be major problems that only an inspection will reveal. Recently a compression test on a low time Continental O-470 revealed very low compression in three of the six cylinders. I would not have expected to see that on a 200-hour engine that was overhauled in a well known shop, but there it was. If I had bought that airplane based solely on the reputation of the shop and the entry in the logs I would have lost several thousand dollars (the cost of reworking or replacing those cylinders).
"Low time, no damage history"
Most sellers know what their airplane is worth. If they have intentionally priced their airplane below the apparent market value, there has to be a reason for it. Often that reason is high time and/or damage history, and sellers sometimes try to conceal such liabilities.
As our fleet ages, more time is put on the airframe and engines. There are 10,000-hour Cessna 172s still flying, while those with less than 1,000 hours are becoming as scarce as a lunar landing module that made the round-trip to the moon. It is very difficult to sell a light single today if it has more than 5,000 hours on the airframe...and if the aircraft is sparsely equipped, it's practically impossible. On the other hand, it is very easy for a seller to "lose" some or all of the logbooks on an airplane like that to cover up its total time in service.
Damage history can also make an airplane tough to sell. When I first started buying and selling airplanes in the early 1970s, it was nearly impossible to sell a damaged airplane because there were too many low-time machines around that had not been damaged. That is no longer true. Certain types of damage (such as a gear-up landing) are acceptable providing the repairs have been done correctly. But even properly-repaired structural damage will reduce the market value of the aircraft, and an airplane that has been "totaled" and rebuilt from pieces of two or more wrecks is unappealing to most buyers. Sometimes, damage of this magnitude is covered up by removing entries from logbooks or not making them in the first place. If the buyer doesn't know how to recognize the telltale signs of repaired damage on the airplane itself, he or she could be badly stung.
Every buyer should do a title search, and should ask the title company to obtain copies of any FAA Form 337s that have been filed for that airplane. Mechanics are required to fill out and submit this form any time they make any "major repairs or alterations" to any certified airplane. A copy of each Form 337 is supposed to kept with the maintenance logs and be passed along with the airplane, but often they are lost. It's easy for a seller to "lose" a 337 that will reduce the market value of the aircraft by several thousand dollars, especially if he or she bought the airplane without realizing it had been damaged. The seller isn't always to blame, either...some mechanics do not make logbook entries for major repairs when they complete a Form 337.
If the title search turns up Form 337s that reveal damage that you were not informed about, you should confront the owner of the airplane. It's entirely possible that the owner doesn't know about it, especially if he's not the first owner and failed to do a prepurchase inspection or title search when he bought the airplane. If a Form 337 reveals severe damage to the airplane, you probably will back out of the deal. However, minor damage can be worked around with a price adjustment. It depends on exactly what occurred and how the repairs were made.
While there are fewer bargains today than there were 20 years ago, some good airplanes can still be bought at very reasonable prices. As a purchaser, your job is to make sure that when you find an airplane that is priced below others of the same type in similar condition and with similar equipment, you understand why the owner is selling below the market. You have to do your homework quickly or someone else is likely to wind up with the airplane...but not so quickly that you aren't completely satisfied that everything about the aircraft is exactly as represented.