Re: RIP 96 Town & Country -

Original List Price $27,680 - $29,775 (1995 model year)

> > Matthew S. Whiting is of the opinion: > > >>Check the NADA book. It would be a miracle if you could get $5,000 for >>a 96 with high mileage. I have a 96 with 141,000 that is in great >>running condition. I just bought an 03, but decided to keep the 96 and >>drive it till it dies as it is worth only about $3,000, maybe $4,000 if >>I can find a sucker. > > > Maybe its worth more, maybe less. The most optimistic post was $7000. > > Pay $30,000 (thats with taxes, license, and extras); 7 years later your're > down $23,000 plus. Compare that with private planes. There is NOT ONE > factory-built, FAA certified plane EVER BUILT in flyable condition that is > not worth more, much more, than its original value in absolute dollars. > Not one.

That is certainly true for most older airplanes, but I'll stop short of saying all as I don't have all of the data and there is almost always an exception to any rule. And I'm not sure this holds true for airplanes of recent manufacture. I stopped subscribing to TAP some years ago when I sold my airplane, but I suspect that airplanes made in the last 5 years or so may well sell less now than their new price, since the recent new prices are pretty high.

Any Cessna, Piper, Stearman, Beech, Aircoupe, Stinson, or any other make > going all the way back to the 1920s doesn't cost less today then when > bought new, if in licensed condition. Dollars expressed in numerical > units, not adjusted for inflation. Reason: when you quote trade-in value, > you do the same thing. You express the trade in value in terms of todays > dollars. > > Why are aircraft so valuable and cars so much junk? Read my past, present > and future posts. In a single sentence: When cars are built to the same > engineering standards as light planes you will see a marked improvement in > trade-in value because people will rest assured that an older used car will > get them to their destination without a breakdown as compared to today's > impression that any car older than three years is problematic and needs to > be trailed by a tow truck.

I don't think it is engineering standards as much as simplicity. Most modern airplane piston engines haven't changed appreciably in design in

60 years. Also, the standards for maintenance to maintain airworthiness and MUCH stricter than for cars. If every car had to essentially function identically to when it was new virtually ALL the time, then cars would be in much better shape for much longer. I used to pay between $500 and $2,000 for each annual inspection. I get my cars inspected for around $20 most years and occasionally $150 if I need brakes to pass. And do you really want to pay the same price for replacement parts for your car as for your airplane? I don't!

Lastly, most airplanes operate in a much friendlier environment than most cars. No road salt, flying gravel and stones, etc. Airplanes based near the ocean do tend to corrode and when they do their value drops dramatically, often to well below their initial sales price. These airplanes may be the exception to your rule above.

Matt

Reply to
Matthew S. Whiting
Loading thread data ...

This isn't true for elderly commercial planes, take for example the gas-guzzling Boeing 747. Many after their initial 30 year run were sold cheaply to 3rd world airlines.

But the main reason that older plane prices don't decrease is simply market economics and the laws of supply and demand.

With automobiles, they are priced with razor-thin margins and sold on economies of scale. In short, the price REQUIRES that a pretty high volume of the same model car is produced by an automaker - because pricing is heavily dependent on being able to buy large numbers of the same part for little money on a per-unit basis. Thus, the entire auto parts industry is the same way, this is why the subcontractors that make things like alternators, etc. all are going to Mexico, because every last dollar matters.

In fact it is pretty safe to say that there is not a single mechanical item with the complexity of an automobile that is as cheap as an automobile. For example, take a medical MRI machine - it is probably either simpler, or at the most, as complex as an automobile, yet the cost is millions and millions of dollars.

Anyway, because of the economies of scale, all automakers literally have to warp the auto market to consume the volume of cars they need it to consume. Producing a lower volume of cars isn't an option - this is why there is this rediculous artifically created model year baloney. All the model year exists for is to allow a car lot to have virtually identical cars sitting right next to each other on a car lot, and get away with pricing 1 of them double what the other is. For example, go into a Chrysler dealership and look for a 2003 Neon and ask what the price is, then ask what the price of a

2004 Neon is. The two cars are virtually identical yet the price is thousands of dollars different, and the price differential will get greater next year until all the 2003's are finally gone.

What is effectively going on is that in years that the market cannot support the number of cars that the automakers produce, they steal sales from the following year, hoping that in successive years the market demand will get higher than the baseline number of cars they have to produce, and they also cannibalize the pricing on the used car market, by stealing customers that would normally buy used vehicles.

So as a result of all this sales stuffing, the used car market is almost always OVERSUPPLIED with used cars. Occassionally there are model shortages, but overall, there's too many of them. So, used buyers can afford to become either very picky, or very cutthroat on pricing, and the majority are cutthroat. As a result of this, used cars that aren't up to par get shuttled off to wrecking yards very rapidly, and the depreciation is ferocious on the ones that are left.

BY CONTRAST, airplane manufacturers only build the exact number of airplanes that the market will accept in any given year - this is why you have to order planes in advance. As a result, used airplanes that are for sale have virtually the same effect on the pricing of a plane that new, competitive airplanes have.

If you examine auto markets that operated like plane markets do today you will find the same pricing. For example, when people in the USSR and East Germany were not allowed to buy any car other than the commie-manufactured ones (like the Trabant) and the state-run automakers were so inefficient they couldn't keep up with demand, used pricing was pretty close to new pricing. And to argue that the manufacturing quality of the Trabant was desirable is a joke.

Ted

Reply to
Ted Mittelstaedt

MotorsForum website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.