In article ,
says...


My engine has 360 hours on it. What are the odds that I will still own it
1,140 hours from now? I don't try to figure a "reserve" for an overhaul I
may never do. I prefer the "pay as you go" model.


I am of the "put the advance in the kitty and make the money work while
you’re out flying" school, but I have to admit the "pay as you go" model is
in some ways more sensible. Depends on how much you fly really. If you
really do 200-400h/year, and intend to take your airplane to TBO and keep
going, you are lying to yourself about operating costs if you do not set
aside an hourly investment for the engine. In this case, when the inevitable
happens - may be before or after TBO - you find yourself out of an airplane
for the time it takes you to come up with the cash. On the other hand, if
you are not sure to take the airplane to TBO, either because you will move
up to bigger and better by the time it gets there, or you don’t fly enough
and you expect to be occupying a small pine box before it gets there, then
don’t squirrel money away that could be better spent on bassoon lessons!
Selling a plane with a newly rebuilt engine is like selling a house with a
new furnace - no matter how well you did your homework, you will only get
back a fraction of what you so carefully invested. You will be in direct
price competition with people who invested less carefully, or not at all.

Overall, the prices I see listed here are on the very low end, based on old
aircraft with little residual value and little insured hull value. Once you
get into a more recent aircraft, or a higher performance one, you can at
least double all of the numbers I have seen posted here. Remember though,
this more costly machine is taking you many miles per flight hour, and in
some cases saving you not hours, but days of time, and this can be very
economical.