The World According to Bud
Veteran used airplane dealer Bud McGuire (not his real name!) offers plain-spoken wisdom on buying and selling airplanes—garnished with first-person war stories—in this colorful interview with Kas Thomas.
TBO: One of the reasons I wanted to talk to you today is to get you to reveal more tips, more advice on how to stay out of trouble when shopping for a plane. What do you think is the biggest mistake buyers make?
McGuire: New buyers? Or buyers in general? New buyers are probably too trusting—they don't go into a situation with both eyes open. I talked about that a lot in the article you published back in September. I think one of the biggest mistakes people make is not having a post-purchase inspection, and a budget to cover "surprises" found after the purchase. It's unrealistic to think you're ever going to discover all of a plane's glitches in a pre-purchase inspection. No high-performance plane is ever 100% glitch-free, and you're not going to find all the squawks in one inspection, I don't care who your mechanic is. The real purpose of the pre-purchase inspection is to find the "gotchas"—the really big problems that can end up costing you a lot of money. Like cracked crankcases. High oil consumption requiring a top overhaul. Wing-spar corrosion. That sort of thing.
When you get the plane home and start flying it every week—that's when you really learn what's what. That's when you find out about the starter that slips every now and again, or the magneto that's crossfiring at high altitude, or the oil temperature problem on a hot day. You have to be prepared to fix a few things after the purchase. But a lot of buyers are cash-poor right after the purchase, which can create problems.
TBO: So it's kind of a myth, in other words, that you can really find all of a plane's problems during the pre-purchase inspection?
McGuire: Well, certainly in a smaller aircraft, like a Cub or something, you should be able to find most of the glitches. With a bigger airplane, it can be tough. You just have to budget something for surprises.
Even in a smaller plane, though, you can get bit. I remember one time I bought a Piper Tomahawk from a club. It had been used for training. The club was one where you could join as a non-pilot and go on to solo. Well, the plane's prop was fairly new. It had been replaced on such-and-such a date. I inquired about it—no problem, just the old prop was getting a bit chewed up from all the gravel-strip operation, and they had it replaced. I later found out the true story. A student had gone somewhere on a cross-country and landed with a flat oleo strut and a flat nose tire. If you know the Tomahawk, you know that the prop clearance is pretty poor. If you let the air out of the tire and the nose strut, you've got an automatic prop strike in that aircraft. It turns out, the plane I'd bought had been involved in a prop strike on asphalt, which was not recorded.
TBO: Did you sell the plane?
McGuire: I did. But first I had the engine tore down and the crank Magnafluxed. I didn't want to have someone buy the plane from me and break a crankshaft in two. Then the next thing you know, you've got lawyers breathing down your shorts . . . But anyway, that experience taught me a lesson. I never bought a club airplane after that.
TBO: What's the worst "gotcha" story you've ever heard?
McGuire: A guy bought a Cessna 320 as a runout and took it to have the engines re-done by a first-rate overhaul facility. While the engines are being majored, he has the plane annualed. They find big time corrosion in the rear spar. One by one, the squawks start mounting. Pretty soon, it's clear that the Shah of Iran doesn't have enough money to make this plane flyable—it's junk. The new owner never came to pick up the plane or the engines. He abandoned the whole thing, and welched on the major overhauls.
TBO: Who was the lucky engine shop?
McGuire: Victor Aviation.
TBO: You didn't have anything to do with that plane, did you?
McGuire: No. And the funny thing is, this plane was only about twenty years old at the time.
TBO: What's your general take on the Cessna 310/320 series?
McGuire: Fantastic airplanes. Strong. Well-built. The Wallace plant did fine work. Most people are only familiar with the workmanship of the Pawnee-plant airplanes, the single-engine Cessnas, which is a shame. The twins were the Cadillacs of the Cessna line.
TBO: You're starting to show your age, Bud. Not too many people refer to Cadillacs in that way any more!
McGuire: Maybe I should have said "Mercedes"! [laugh] Anyway, it's a shame they shut down 310 production. The T303 was never a serious contender.
TBO: Of course not. It was a Pawnee plane! [laughter] I toured the Pawnee plant with Dick Weeghman in 1984. They were building T303s right alongside P210s.
McGuire: Really? I'm not surprised. If you look at a T303 up close, it looks like a bunch of housewives put it together with Vise-grips and ball-peen hammers.
TBO: Watch it, Bud. We have housewives reading this. Some of them are darned good pilots, too.
McGuire: Pardon me. I'll watch my language.
TBO: What effect do you think the reopening of the Cessna single-engine production line will have on used-plane prices? Cessna singles in particular.
McGuire: No effect. I mean, new-plane production is not what drives the market. The guy who's in the market to buy a 1969 Skyhawk couldn't care less if the 172 is still in production, because first of all, he can never afford a new 172, and second of all, he knows there will always be plenty of parts for 172s, no matter if Cessna is producing or not.
TBO: What's driving the market right now? Used-plane prices have been incredibly strong throughout the last ten years, even during the depths of the recession.
McGuire: What drives the used-plane market is the same thing that drives any market: demand. There is just a really strong demand for used planes. There's a strong demand for new planes, too, but the used market will always be stronger. It's particularly strong now because of two factors. One is that in real dollars, planes are a good buy—it's never been cheaper to own a plane.
TBO: Wait a minute. It's cheap to own a plane?
McGuire: Relative to years gone by, yes. Look at what shops charge. What's the shop labor rate at most FBOs? Fifty bucks an hour? Hell, I can't get my wife's Subaru worked on for less than $65 an hour. And look at how close in price avgas and premium auto gas are. In the northeast, you pay $1.59 a gallon to fill your car with premium, sometimes $1.69. What's avgas? About $2.10? It's a steal. People in France would go nuts if they could fill their cars with gas for $2.10 a gallon. We're filling our airplanes with it.
TBO: What's the other factor that you were going to mention? You said demand for planes is strong because, in inflation-adjusted terms, planes are a good buy—and what else?
McGuire: The other thing is that people are starting to realize that American-built airplanes are really very well built. I mean, they're engineered to last a long time. Look at what's out there. Some of the first Bonanzas are still flying, and next year those buggers will be fifty years old! You've got Twin Beeches and Staggerwings that are already over fifty years old. No one knows how long a Mooney or a 172 is going to last, but it's bound to be pretty long. The last I heard, Sky King's 310 was still flying.
TBO: Airframe times are starting to get up there. Does that worry you at all?
McGuire: No. Not if the plane is taken care of. That's another thing that's becoming clear, is that five or six thousand hours is still young for an aluminum airframe. Right now, a lot of U.S. aircraft are passing the 5,000-hour mark for the first time. Look at some of the Aztecs in Trade-A-Plane. Look at the Navajos. Some of them have over 10,000 hours already. We'll be seeing a lot more of that as time goes on.
TBO: But doesn't the wear and tear start to add up?
McGuire: It depends. You take a rugged airplane, like a Baron 58, I don't think you could wear the airframe out in less than 20,000 hours. I know Bonanzas that have been landed gear-up three and four times. They're still flying.
TBO: You don't think a Tomahawk is going to last 20,000 hours, do you?
McGuire: I expect a few will. But you bring up a good point. Which is that not every Mickey Mouse piece of [expletive] is necessarily going to make it to umpteen jillion hours. You'll see certain planes kind of disappear from circulation, I think, just like you see with cars. How many Yugos do you see on the road these days? Not many.
TBO: Not many Porsche 924s, either. Or Mazda RX-7s.
McGuire: Right. But I bet you can remember, not so long ago, when you could count on seeing at least one on your way to work, every day. I think the same will turn out to be true of airplanes. The bad ones will slowly disappear from circulation.
TBO: It's interesting, isn't it, that a lot of the cars that you don't see much of any more also happen to be ones that had troublesome engines. Whereas the majority of thirty-year-old cars you still see driving around, had good engines. I wonder if that will be true of planes?
McGuire: It kind of is, I think. You know, Cessna built over two thousand 175s—the 172 with the geared engine. Two thousand of them! And how many do you see flying today?
TBO: Not many.
McGuire: Right. And the ones you do see have all been converted to Lycoming and Franklin engines. What does that tell you? A perfectly good airframe, matched up to a lousy engine, spells a product with no future. That's really the challenge faced by Malibu owners. There's a twelve-year-old design that, if it survives to be thirty years old, I'd be surprised. Not because it's a bad plane, but because the engine has poisoned the plane's reputation.
TBO: The Continental engine? Or the Lycoming engine?
TBO: There are still a lot of older 421s flying. There's a 30-year-old design that's still in service. Does that mean the Continental GTSIO-520 wasn't such a bad engine?
McGuire: I never thought it was a bad engine. People just didn't know how to fly it. Now they do. So yes, the 421 has a future, you might say. Even though it's quite an ancient design.
TBO: What do you think about the Orenda engine?
McGuire: That's that V-8, right?
TBO: Right. It used to be called the Thunder engine. Now it's being produced in Canada under new ownership, and the plan is to sell this 495-cubic-inch piston engine as a retrofit package for King Airs . . .
McGuire: I think whoever came up with that idea should have his urine tested. I mean, come on. You don't think for a minute that any turbine operator is going to drop back down to piston power, do you? Why would you want to convert a King Air into a Queen Air? Talk about cutting a plane's nuts off . . .
TBO: What about fuel efficiency? What about extra range? The Orenda folks say their conversion will add 80 knots to a C90's cruise speed . . .
McGuire: You're missing the point. A turbine guy isn't going to give up the sex appeal or the 8,000-hour TBO of a PT-6 for the privilege of going a little faster or flying a little further. If a King Air operator wanted speed, he'd already own an MU-2 instead of a King Air. Okay? That guy isn't interested in clowning around with piston engines, I'll tell you right now.
TBO: Maybe what the Orenda people ought to be doing is developing a small turbine engine that they can sell to Queen Air owners.
McGuire: Now you're talking! I think if somebody could get the cost of a turbine engine down to the cost of a GTSIO-520—say, $50,000 or so—you'd have guys lined up waiting to convert to turbine power.
TBO: Do you think that's ever going to happen?
McGuire: You're the engine expert. Why are you asking me?
TBO: Because you've been in aviation longer than I have. You can remember when there wasn't such a thing as a turbine engine. Heck, you knew Wilbur, didn't you? [laughter]
McGuire: Well, okay . . . If you want to know what I really think, I think that if an affordable turbine comes along, it won't come from any of the big-name engine makers who are in the market now. It'll come from left field—you know, an innovator working in his basement. Like the guys who started Apple computer.
TBO: Jobs and Wozniak?
McGuire: Right. A low-cost turbine will have to come out of some totally new hole-in-the-wall operation. Just like the first personal computers. You see, Pratt and Whitney and Allison are like IBM and Digital Equipment Corporation. You can't expect anything revolutionary to come out of a culture like that. You have to remember, turbine engine development began as a military undertaking. It was funded by the defense budget. Even the really small turbine engines, the Allisons and Williams engines, had their R&D underwritten by the military. And that's just poison, because the whole way the industry has developed for the past fifty years has been shaped by military procurement. Cost overruns, big budgets, lengthy development, dead-end research projects, last-minute changes to accommodate some general's pet peeve—these are the sorts of things that are more-or-less normal with defense projects, which is why you have $700 toilet lids and all of that. The price structure you see with turbine engines today has grown out of this environment.
Now, you go to Teledyne or United Technologies or Rolls-Royce and say, "Give me a new 400-horse turbine that's fuel efficient, weighs nothing, and can burn any kind of fuel," and I guarantee you they are going to want hundreds of millions of development dollars. Then, when they're finished, they're going to want to sell you the final product for a quarter million bucks an engine, minimum.
TBO: So turbine engines will always be expensive?
McGuire: As long as they're made by the big guys, yeah.
TBO: Maybe someday the computer software and CNC machine technology will be available to do bigtime jet-engine R&D on the desktop, so to speak. Maybe some young kid, some hacker will become the Burt Rutan of engine design.
McGuire: That's what it's going to take.
TBO: That's what the Wright brothers did, I guess. They didn't like the engines available to them at the time, so they designed and built their own.
McGuire: That's right. People tend to forget that engine technology has led the way to every important advance in aircraft design. Which may be why private aviation is stuck in such a rut.
TBO: Excuse me. [sarcastically] You mean General Aviation.
McGuire: I can't stand that term. I agree with Max Karant, it's an abomination.
TBO: We seem to have gotten sidetracked a bit. I was going to ask you to share some more of your wisdom on the subject of used-plane buying. Like, how you determine the value of a plane. Do you use the Price Digest bluebook?
McGuire: I don't use any of the bluebooks. These last couple of years, things have been changing so fast that I don't think any bluebook can keep up. If you specialize in a particular make and model of plane, you very quickly become an expert at what a given plane is worth, because you know what people are paying for exactly that kind of plane.
You can always get a quick idea of relative values by reading Trade-A-Plane. That'll get you in the ballpark, although you have to remember that Trade-A-Plane prices are asking prices, not settlement prices.
One thing that's making it more difficult to "price" a plane is that these days, it's not unusual for somebody to completely redo a plane inside out with new upholstery, new paint, fresh engines, and fresh avionics. And then maybe they'll put a turbonormalizing kit on, or put on an IO-550 in place of an IO-520, or add a STOL kit or something. Then it gets really hard to fix a fair value.
TBO: The bluebooks all have formulas for determining the value of "extras," like a zero-time engine. They'll say to add so much for radar or boots, subtract so much for a high-time engine, and so on.
McGuire: I've never put much stock in that B.S., except in the most basic sense regarding a runout engine or something. Those formulas don't work for me. You end up with guys telling you their 1974 Aztec is worth $132,000, "because the Bluebook says to add this much for new paint, this much for color radar, this much for prop deice . . ." Give me a freaking break! There isn't an E-model Aztec in the world that's worth $95,000, I don't care what it's got in it. If you want to find out what your plane is worth, put some ads out there and see how many calls you get.
TBO: What's the most cost-effective way to increase the value of a plane?
McGuire: For a single-engine plane, it's to overhaul the engine. For a twin, it depends on the airplane. A fresh annual is a big turn-on for some buyers, but again I'd have to say, if you've got a high-time engine, overhaul it. Take a look at what the plane's sore point is. On some planes, it's the paint. For others it's the radios. I guarantee you the best way to increase the value of a late-model Cessna 310 is to take any ARC radios out and put King radios in. On the other hand, if you've got a Cessna 210 or 206, you'd do well to put Flint tanks on. If it's a real old 210, install an S-Tec autopilot. Most older 210s don't have any autopilot, but the guy who's looking to buy one generally wants an IFR-ready airplane.
TBO: What about turbocharging?
McGuire: Adding an aftermarket turbo does absolutely nothing good for resale value. In my humble opinion. Particularly east of the Mississippi.
McGuire: It impresses some buyers, but not others. The Duke, yes—it's a plus. On a Seneca or Navajo it doesn't seem to get anyone's juices flowing. The T210 and P210, I'd say it's a tossup—most buyers probably would welcome it, but that doesn't mean you're going to come out ahead financially by installing the kit.
TBO: And I think a lot of overhaulers would say that it makes no difference for engine life in that application.
McGuire: Right. The same is true for the A36TC. With or without an intercooler, you're only going to get so many hours out of that engine. It's hard on cylinders.
TBO: What about horsepower mods in general?
McGuire: Well, some of your engine mods, like those done by Colemill and RAM, are very well received, very well established. And I think a lot of the IO-550 mods are catching on. But I think you have to be careful. Because most buyers really do want a stock airplane. There are exceptions, of course. If you're selling a T-34, for example, it better not have the original E-225! And it doesn't hurt to replace an O-320-H with an O-360 in a Cessna 172N. But you want to be careful before you put a Lycoming TIO-540 in the nose of your Bonanza or P210. Most buyers won't know what the heck they're dealing with. You don't want to create a mutant.
TBO: Does it matter where you get the engine overhauled, as far as selling the plane?
McGuire: Not much. Most buyers are still pretty unsophisticated on that score. The minute they hear "low time since major," most buyers get a bulge in their pants.
TBO: Do you think buyers have gotten smarter over the years, though?
McGuire: Oh heck yes. You have to realize, the market is fairly mature. The guy who's buying his first twin has generally owned a couple of singles already. He's IFR rated and knows the ropes. Even the guy who's buying his first plane is very well informed, generally speaking. We live in an information age now. People are very well-read, very educated on things they care about. There's a lot more to read now in aviation, as in other fields. People are reading, and of course safety has improved in recent years.
TBO: I was reading somewhere that IQ-test scores have risen dramatically over the years, despite the influence of television. Or maybe, because of the influence of all forms of media, including TV.
McGuire: I'm sure that pilots' IQs are going up, too.
TBO: They'd go up a lot faster if oldtimers like you would do more writing. When can we expect a book from you?
McGuire: As soon as you want to write it for me.
TBO: Looks like it's about lunchtime. Bud, thanks for taking time to answer so many questions.
McGuire: Thank you.