If you’ve ever gone through the process of buying a house, you most likely had the house appraised before signing on the dotted line. Appraisals generally protect you as well as the lender from overpaying.
For those looking to buy, sell, or lease an aircraft, the concept is similar. Aircraft valuations fluctuate frequently. Purchasing a plane can cost you anywhere from $2 million to $100 million. When spending high dollar amounts, you’ll want to ensure your plane is valued at the proper amount. Utilizing professional appraisal services ensures just that.
Continue reading for a quick overview of aircraft appraisals. We’ll explore why hiring a professional appraiser is the best choice you can make.
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What is an Appraisal?
Appraisals are completed by a trained professional with an impartial opinion. The appraisal itself contains specifications outlining the current market behavior for all types of aircraft. For example, the physical piece of collateral itself is inspected such as:
- Age
- Condition of interior and exterior of the plane
- Number of flight hours and landings
- Avionics and any installed equipment or upgrades
In general, this gives the appraiser a good idea of the shape the aircraft is in. In addition to the immediate physical condition of the plane, the appraiser looks at the maintenance history of the aircraft. Properly filled out logbooks, if any major repairs have been made, and if any major flight incidents have happened in the past.
Each of these factors can either improve or deduct value from an aircraft. A professional aircraft appraiser will take into account the individual factors to provide an accurate valuation for each individual aircraft. This will determine its current market value.
Benefits of Appraisals
By having a valuation completed on your collateral, you can avoid potential excess tax assessments and excess capital gains taxation.
You’ll also have professional verification that your aircraft is in good physical shape. Appraisals can verify any past damage claims, confirming the current condition of your aircraft.
For those looking to sell, contracting a professional aircraft appraiser can help you sell faster to potential buyers. For those looking to buy or lease, having an updated appraisal will help back your purchasing power with financial institutions. The appraisal itself will help banks substantiate any value claims related to the collateral.
The Value of Time
It should be noted that due to the large physical nature of aircraft, valuations can take time. On-site appraisals can take up to ten days. The appraiser will need to perform any research and collect data before compiling the findings in a report.
Due to the extensive nature of appraisals, it can help to contract services from a reputable aircraft valuation company such as ASA Aircraft Appraisals. Professional appraisal firms offer accredited appraisal services for a variety of aircraft from private business jets to vintage aircraft.
Professional Appraisal Services
Whether you’re looking to sell an old Cessna or hoping to buy a brand new Gulfstream, contracting help from professional appraisal services can make all the difference in ensuring a smooth transaction. The detailed reports provided to you will save you time and money for years to come. Happy flying!
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