March 25, 2013
By Ian J. Twombly
While the 2008 Get Your Glass Sweepstakes Piper Archer was on display two weeks ago in San Jose, one of the questions most often asked was about value. Most who came by to see the finished airplane wanted to know how much it cost to refurbish it and how much it’s now worth. Unfortunately, there are no simple answers.
As most members know, much of the work and parts on the sweepstakes airplane is deeply discounted or donated. This way, we can offer a superb airplane at a great value. We’re always cognizant that we work for the members, so maximizing value is very important.
I like to break down the question of how much is in the airplane by parts and labor. If you go through past sweepstakes updates, you’ll find an extensive list of what we’ve done to N208GG. In short, the airplane has a completely new panel, a new paint job, a new interior, and an overhauled engine.
What really matters for those who are considering some of the upgrades is the retail price. With the interior and paint, the majority of the cost is in labor, although the leather, rosewood accents, and metallic paint certainly aren’t cheap. I estimate the parts costs for those two projects to be about $20,000, including airframe modifications.
The panel is another story. Avionics parts alone would retail at around $95,000 in the Archer. That includes the antennas, 406 MHz ELT, and the four Lightspeed Zulu headsets.
The last big parts expense is the new overhauled engine from Penn Yan Aero. Overhauling engines is a tough business. Penn Yan Aero does it right, which is why the company has been successful for so many years. But margins are tight on a Lycoming O-360-A4M. Depending on which cylinders you use, the Penn Yan overhaul runs in the neighborhood of $20,000.
As you can see, the retail cost of what’s in the Archer is already worth more than double the airframe, and we have yet to factor in labor. Parts costs are usually transparent and easy to track down. Labor is more difficult to calculate. The rate depends on what equipment you are installing, or on what airplane. We went to three fantastic shops, and their rates are probably higher than others, but we also know we got a fantastic finished product. So how much was the total labor cost? I’m not sure exactly, but I would venture to say it was at least $60,000.
Add it all up, and what do you get? I think you get an airplane that has north of $250,000 worth of upgrades. Of course, this is all academic, because the value of the airplane never equals the amount that’s been put into it. That’s good news for the winner, who will pay taxes on a significantly lower rate than one based on $250,000. We’ll have it appraised so the new owner is given a fair-value estimate that is based on market conditions.
What do you think the airplane is worth, and why? Also, would you keep it? Does an airplane like this suit your flying needs? Write to me below and I may publish some answers in a future update.
E-mail the author at firstname.lastname@example.org
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