Anyone looking at the used airplane market over the past few years saw prices skyrocket. We saw supply chain issues causing a significant drop in new aircraft deliveries, prices for replacement parts increase, a surge in new pilots, and lower borrowing cost. As a result, there has been a surge in demand for used airplanes, leading to a rise in prices. In this blog, we will discuss the current trends of used airplane prices and what factors are driving them.

Over the past year and a half, we have seen a rising interest rate environment. For individuals looking to finance a new purchase, loan prices will have an impact on the market. When rates were low it was easier to swing the higher asking price. As the Federal Reserve continues to chase inflation there is an increasing probability that interest rates increase in the June or July meeting. A rising interest rate environment can put pressure on rising asking prices.

Additionally, with the Airlines looking to replace retiring pilots at a higher rate, the demand for training and time building aircraft are increasing. Looking for an airplane outside of the top training platforms may yield a good find in this environment.

What do these trends in the general aviation market have to do with insurance? The big factor is hull value. For example, if the replacement cost of a Cessna 172 was insured at $75,000 five years ago might not be close to market today. Additionally, replacement parts increase the cost of repairing an aircraft. With market changes having a flexible hull value.  

If trends continue with supply and demand prices should continue to push higher. When interest rates lower, we could potentially see another surge in the prices for used general aviation aircraft. We are happy to discuss how you can be in control of your hull values at Aviators Direct.