Airplanes And Depreciation

The answer is, it depends. With the market in the dumps as it is now, you are going to have a harder time hanging on to the value of your investment that in better times. 

In good times we saw RVs selling for enough money over the cost of building to allow some people to make a nice profit. GlaStars, at the height of their popularity were also selling for  high prices.  Ditto for the big Lancairs.  However, these planes are no  longer bringing such good prices. 

Many things impact the resale value:  better models come out (GlaStars and RVs), problems appear (certain Zeniths), insurance becomes prohibitively expensive (many Lancairs), plus the general state of the economy.  To some extent the same things happen to certificated airplane values.

Be conservative and expect to take a pretty good hit on the value of any airplane you buy.  If you are still comfortable after allowing for that, then go ahead.  If you aren't, maybe you're not yet ready to buy an airplane.

Joe,

The biggest issue affecting resale on the plane you're looking at is probably going to be the Subaru engine.  There are a handful of people who are happy with the Subaru engines, but the vast majority would rather fly behind Lycoming, Continental, or at least a Rotax 912.  Of course, at that price, you're significantly lower than any of the other CH601's on the market, so perhaps you'll still be able to recoup your intial investment.

It would be my opinion to pick up something a bit more conventional, with a more conventional engine/prop combo at a good, depressed market price.  You menioned the Colt, which is definitely conventional.  If you're willing to spend a few more bucks, and don't have to be LSA, you could get a nice Pacer or Cessna 120/140.

Also, don't forget about the Sonex.  Yeah, I know they only use the VW (AeroVee) or Jabiru motors, but the airframe is proving to be quite popular.

Joe,

I would echo Wayne's comments especially regarding the uncertainty in the market.  I'm a retired cost accountant and I will tell you one very big fact regarding expenditures on transportation equipment.  Whether we're talking about airplanes, boats, cars, or motorcycles to name a few of the popular modes, they aren't generally viewed as "investments".  These things depreciate with time and use.  The guys and gals who sell these things know the buyer has an emotional attachment when they set down to make the purchase, and that works in the seller's favor.  If your more interested in the return-on-investment (ROI) then the FLY in the airplane, then talk to a financial advisor rather then an airplane salesmen.  

My personal point of view is that all the money I spent to put those PIC hours in my log book pay me a huge dividend in my mental well being.  I can take out my log book and re-fly those flights as much as I like for free.  You will never get a dividend check from any aircraft or auto manufacture because you own their product.  You may find some future appreciation in value if your lucky enough to pick a product that holds its' value.

The RV line has had a great track record because Van takes a conservative approach to his designs, conventional materials and construction methods. His engine approach is "the best engine value is a low time Lycoming".

In the end, it's all about having fun and making a dream come true and you can't really put a price on that.  We're all going to be dead a long time, enjoy life and follow your dreams!

Best of Luck on whatever you decide to fly!

Joe