Typical glider depreciation?

That's a fair point Mike. Let's try and collect some data.

Would people be prepared to post what they paid for their gliders in
the past (Sterling, Euros, Dollars)? Further back the better. Then
we could get some idea of actual depreciation, and take account of
currency variations.

Paul


On Aug 10, 4:56*pm, Mike the Strike wrote:
On Aug 10, 8:13*am, Paul Ruskin wrote:

Assuming you're interested for valuation reasons, rather than US tax
ones...

I did some sums on the depreciation in real terms of an ASW20 over25
years, and got the answer of about 2.3% per annum.

This was based on finding an original 1984 price of $28,000 for an
ASW20C, and approximate asking prices in 2009 of $33,000, then
depreciating according to the retail price index (US, I think, though
I don't recall where I got that from).

Could do with some more data points though.

Paul

Depreciation of the value of gliders - especially European built - has
been offset by the depreciation of the US dollar, which has dropped
from around 0.8 to the Euro to over 1.4. *This has nearly doubled the
dollar cost of new gliders imported from Europe into the USA in the
past ten years. *This depreciation of the dollar has led to much less
drop in value of gliders as they age in the US market.

Mike

On 8/10/2011 11:38 PM, Paul Ruskin wrote:
That's a fair point Mike. Let's try and collect some data.

Would people be prepared to post what they paid for their gliders in
the past (Sterling, Euros, Dollars)? Further back the better. Then
we could get some idea of actual depreciation, and take account of
currency variations.

This is important: When you sell a glider, the price you get is not
determined in any way by what you paid for it. So, I'm not persuaded
that "depreciation" means anything in the very small glider market.

Gliders that were identical when new at the factory can be so very
different after 10 or 20 years for numerous reasons:

- damage history (major repairs to none)
- hours (20 hours a year to 250)
- finish (pristine to cracking)
- instruments (20 year old outdated stuff to the latest in everything)
- trailer (hangar queen to a contest pilot's 10,000 miles a year)

The popularity of particular models also greatly affects the value after
10 years, even if they are very similar in performance.

And this: because of the swings in the currency market, the owners of
two identical gliders bought only one or two years apart can have
significantly different depreciations, simply because of the value of
the dollar at the time of purchase.

Here's an observation: I've sold four gliders since I started soaring in
1975. Three of them *appreciated*, only one *depreciated*.

--
Eric Greenwell - Washington State, USA (change ".netto" to ".us" to
email me)

- "A Guide to Self-launching Sailplane Operation Mar/2004" Much of what
you need to know tinyurl.com/yfs7tnz

I think all that you've said is true Eric. None the less, with enough
data it would be possible to see some trends - rather like the car
guides that you can get (Parkers in the UK for example).

I've heard several people comment that they've sold gliders for more
than they paid. I don't know whether that remains the case after you
allow for inflation (probably will in some cases - as you mention
prices go up and down).

I also observe that it's possible to buy a then state of the art
glider from the 1960s for £5K, from the 1980s for £20K and a new one
will cost you £100K. OK, not like for like, but my suspicion is that
if you buy a new glider and keep it for a long time, it will
depreciate. I'm a little curious as to by how much. Hence the
request for data!

Paul

On 8/11/2011 11:58 AM, Paul Ruskin wrote:
I think all that you've said is true Eric. None the less, with enough

I also observe that it's possible to buy a then state of the art
glider from the 1960s for £5K, from the 1980s for £20K and a new one
will cost you £100K. OK, not like for like, but my suspicion is that
if you buy a new glider and keep it for a long time, it will
depreciate.

If you keep it for a short time, it will almost always depreciate. Keep
it for a long time, and it's a total guess about what will happen. If
your currency tanks, you'll be delighted with the amount you sell it
for, and you could even show it was a good investment; if the number of
soaring pilots continues to shrink, you'll be selling into a buyer's
market and the opposite will occur.

I'm a little curious as to by how much.

I just told you exactly what will happen: you will lose or gain money
when you sell, and there is no way to know which it will be 10 years
from now.

Hence the request for data!

You can't do it for the glider you end up buying - too many important
parameters that can not be predicted or controlled, and like the
investment people tell you "past performance does not guarantee future
results". If this is just a fun thing you like to do, have at it, but
don't even think about it if you want to own your own glider.

Instead, buy one you can afford, that you can fly safely and enjoyably,
fly the hell out it, and hope that A) prices are really high when you
want to get out of the sport; B) Prices are really low when you want to
get a different glider.

--
Eric Greenwell - Washington State, USA (change ".netto" to ".us" to
email me)
- "Transponders in Sailplanes - Feb/2010" also ADS-B, PCAS, Flarm
http://tinyurl.com/yb3xywl

All, thanks for your replies.

I should clarify that this is about depreciation for valuation and
price calculation in our club and not for tax purposes.

What I am trying to come up with is a tariff for our club gliders.
The goal is to charge enough in glider rental to maintain the assets
of the club. Conceivably, this would mean not just to keep a fleet in
the air, but to replace gliders as they age so we have reasonably
recent gliders to fly. Depreciation may be a major component. How do
other clubs deal with such issues?

(To give more of a background: The club in question currently has a
Schweizer 2-33 as training glider, and then a 1-26, a Pilatus B4 and a
Grob 102 Astir, and a Piper Super Cub. I think this is somewhat
typical for a number of smaller clubs in the US, and worth
discussing. While I love the club and enjoy flying there, you will
probably all agree with me that a reasonable forward-looking plan has
to include an update of the fleet. That is why I'd like to figure
out reasonable rental charges for those a/c, but also for potential
upgrades.)

David Reitter wrote:
All, thanks for your replies.

I should clarify that this is about depreciation for valuation and
price calculation in our club and not for tax purposes.

What I am trying to come up with is a tariff for our club gliders.
The goal is to charge enough in glider rental to maintain the assets
of the club. Conceivably, this would mean not just to keep a fleet in
the air, but to replace gliders as they age so we have reasonably
recent gliders to fly. Depreciation may be a major component. How do
other clubs deal with such issues?

(To give more of a background: The club in question currently has a
Schweizer 2-33 as training glider, and then a 1-26, a Pilatus B4 and a
Grob 102 Astir, and a Piper Super Cub. I think this is somewhat
typical for a number of smaller clubs in the US, and worth
discussing. While I love the club and enjoy flying there, you will
probably all agree with me that a reasonable forward-looking plan has
to include an update of the fleet. That is why I'd like to figure
out reasonable rental charges for those a/c, but also for potential
upgrades.)



How long is a piece of string? You already had some great answers,
especially by Eric.

If depreciation worries you take some best guess stabs - including 0%
and 100% and run some numbers. But you have to stop fixating on this
highly variable and unpredictable number. If you want to sell some of
the current fleet you can guesstimate their value from recent ads.

More important things are likely raising money now for a new shiny
glider, recruiting new members, getting those members flying and
retaining them, recruiting/retaining good instructors and tow pilots,
getting club gliders and members to fly XC, encouraging members to
purchase private gliders, equipping club gliders for XC (pee tubes,
electronic varios, flight recorders, flight computers/PDAs etc.),
equipping gliders and tow planes with radios and PowerFLARM, paying
insurance, misc. repairs, glider refinishes, running the tow plane, tow
plane engine replacement etc., building/tie down/property costs,.... a
lot of stuff to actually think about there and much of which affects
hard cash flow now and is more useful than trying to worry about
something that is not possible to accurately answer.

Have you already raised the money to purchase the shiny glider, trailer
etc.


Darryl