As much as we’d like to believe they are value-adding, the fact is, many variables impact just how much your new avionics will positively impact the bottom line when it comes time to sell.
I can tell you from many years of personal experience; new avionics have a nearly hypnotic effect on aircraft owners. When they see a shiny new gizmo of any type, their eyes glaze over, and the desire to add it to their aircraft’s panel becomes overwhelming. Even with purchase and installation costs often running well into the five-figure range, owners will attempt to justify the upgrade to themselves and their significant other by saying, “It’ll add value to my airplane.”
Well, if your definition of “value” means more money, then you might and probably won’t recoup a good percentage of said upgrade. The truth of the matter is that the “added value” that comes with a particular upgrade means something different to every owner. Yes, to some, it’s more money at closing. To others, increased value comes from adding a piece of equipment that makes them a better, safer pilot. And there are a lot of grey areas in between.
So, let’s look at the two types of owners and their goals: The “keeper,” who wants improved aircraft usefulness/safety, and the “seller,” who’s obviously looking for a higher selling price.
Upgrades for the Long Run
“The first thing to do, no matter what your goal is, would be to fix whatever issues you have with inoperative instruments or avionics that are in the aircraft now,” stated Mark Lee, president, Carpenter Avionics. “A cover plate is much better than an inoperative box. Any prospective buyer will assume the worst with regards to how much it will cost to replace that unit.”
“Once those issues are addressed, if the owner is planning on keeping the aircraft for a long time, then their avionics upgrade should be driven by equipment that will make their typical flight safer and more enjoyable,” he added. “To them, whatever that upgrade is, it’s adding value.”
Too true. Even with software upgrades, avionics technologies and capabilities are advancing so quickly that once the unit is in the panel for any length of time, it will probably have little to no value uptick at sales time. Lee said that to maximize the ROI of your avionics upgrade, it needs to fulfill an immediate need or goal. The upgrade can be as simple as adding a couple of USB outlets into the panel to power your iPad (an addition any pilot would value) or as complex as adding a touchscreen PFD or new autopilot. If the upgrade fulfills an immediate need or desire, then it’s adding value to you.
No matter your direction, Lee stressed that you need to be strategic in your thinking regarding your upgrade plan. It’s a big mistake to start adding components into the panel without clear short- and long-term goals in mind.
For example, let’s say you want to improve your IFR skills by adding one of the amazing new touchscreen GPS navigator units from Garmin or Avidyne. Which one is your best choice? Your knee-jerk reaction may be just to say Garmin. (Isn’t it the solution to everything?) But, depending on your situation, brand-G may not be your best course of action.
“The Garmin GTN TXi is a stellar GPS navigator, and its interoperability is best when it’s working with other Garmin units. Mixing it with avionics from other vendors can be done, and it is done, though it may not interop functions with the other gear that it has with other Garmin units,” Lee says. “If you plan to change more of your avionics to Garmin, then it’s a great foundation unit.”
“If you have a panel of solid avionics units now that aren’t Garmin, and you don’t have the plan or budget to do a full-on upgrade, then the Avidyne IFD may well be your better solution,” he continued. “It has a great flight management system, and it’s very compatible with many different kinds of avionics and autopilots. It will deliver its full array of capabilities without having to remake your panel totally.”
Lee said that with all of the variables regarding installing and integrating new-generation avionics with legacy systems, the best first step is to contact an established avionics dealer and get their professional guidance.
Like anything, though, do your homework, make sure the shop is established and has a level of experience with the various brands of avionics and your aircraft’s make and model. There may be installation or integration issues that an inexperienced shop has not seen. That can have a huge impact – and not always a good one – on how your avionics upgrade turns out.
Upgrades to Boost the Bottom Line
Approaching an avionics upgrade to maximize your aircraft’s selling price is a whole different challenge. It’s like putting down a new carpet before you list your house. Maybe the new owner doesn’t like green shag…
Anyway, the first step to a successful outcome is determining exactly what upgrades you need to make to bring your aircraft up to par with others currently on the market. This is no time for emotional attachments. Everyone’s airplane is a “10.” So the most reliable source of this kind of impartial and objective market information is an accredited aircraft appraiser.
“Although upgrades will always add value to an aircraft, exactly how much that increases the selling price will depend on how it impacts functionality and capabilities,” explained George Kleros, senior VP strategic event management and fleet support, Jet Support Services, Inc. (JSSI). “The appraiser can determine fair market value by using the sales comparison approach know as ‘comps,’ which are recognized by the American Society of Appraisers and accepted by all aviation financial institutions.”
“The owner would like to know what the value of their aircraft would be before and after an avionics upgrade,” he added. “Remember that asking price and market price are two different things. Especially in today’s world.”
No doubt knowing where your aircraft stands in the market is a valuable piece of information that could save you tens of thousands of dollars in not doing an upgrade you may have thought was necessary. Many owners have done an extensive upgrade thinking that they were making the right move only to learn that they wasted their time and money. So, starting with solid data can be a life-saver. Of course, this kind of information does come at a price.
“We offer a basic ‘desktop’ evaluation option. We look at this airplane compared with airplanes with comparable equipage, age, paint, hours, with or without an engine program, and all,” Kleros stated. “There are a lot of variables, but we can come up with a basic number.”
“If the owner wants an on-site appraisal, we will grade each component in the cockpit, the interior, paint, engines, and airframe. It gives us a very accurate estimate of the market value,” he says. “It’s not for everyone, but it can pay off in the right situations.”
Best Bang for Your Bucks?
Well, isn’t that the proverbial $100,000 question. Unfortunately, there’s no easy answer. It depends on your airplane and what the next owner is looking for. Step one is any current or soon-to-be-obsolete equipment, like CRT displays or LORAN units, need to be replaced ASAP. And if there’s not an easy upgrade, then expect the value of the airplane to be way below market. Also, if your airplane isn’t yet ADS-B Out compliant, get it done before you list it for sale.
“For the most part, we are past the ADS-B [Out] mandate and the bulk of the work in that area is done. But, there are still planes flying today and many sitting on the ground that are not ADS-B compliant,” explained Phil Stearns, director of sales and marketing, Stevens Aerospace and Defense Systems. “There are options out there, and many that have been installed and working just fine, that divert from the OEM suite – meaning stand-alone ADS-B solutions. These meet the ADSB mandate and are fully STC’d solutions.”
“That said, if a new owner wanted full WAAS/LPV capability, for example, it might require that they remove the newly installed stand-alone components (GPS, transponders, etc.) and re-purchase upgraded OEM components to have the latest and greatest features and capabilities,” he continued. “Both paths and options are clearly valid, but owners should consider the future path they or the new owner will have to take in order to fly as they wish or even comply with future mandates and OEM software changes.”
But, if you’re currently operating an aircraft that’s still in production, you’ll want to take a hard look at what features and functions are available from the factory.
“Regarding King Airs and Citation Excels, in my opinion, the best avionics modification one can perform is a G1000 install in a King Air or a G5000 in a Citation Excel. There is a much better return on investment on these types of installs as opposed to partial panel modifications,” stated Gary Brown, avionics/operations manager, Stevens Aerospace and Defense, Nashville, TN. “Brokers and owners will often spruce up an aircraft panel prior to selling by installing some updated flight or communication components to make it more attractive to sell, which in fact these do add important features and benefits, but add little ongoing significant value overall to the airplane.”
“If we were to use a 20-year-old Piper Mirage as an example, you can buy them all day long for $450,000. But you’re buying 20-year-old avionics that won’t deliver the capabilities today’s units do,” explained Fred Ahles, founder, Premier Aircraft Sales, Inc., “Buyers want to purchase an airplane that is as close to what they ultimately want now. No one wants to buy an airplane only to have to put it in the avionics shop for three months while it’s upgraded.”
“So, the closer you can come to delivering their solution, the better chances you have of a fast sale at maximum value,” he added.
Ahles cautioned, though, that the one thing you don’t want to do is to get too “creative” with your avionics upgrade. For example, putting a low-cost digital PFD solution like Aspen in a lower cost airplane, like a 210 or older Bonanza, may reap some good ROI. But, not so on a more expensive/newer aircraft.
“Once you get into the $300,000 and up price range, if you try to cut corners, you are limiting the next owner’s ability to easily upgrade later on. That will definitely hurt the resale value,” he said. “But, there’s also danger if you decide to go all-in with the upgrade. Many times, there’s more to upgrading avionics than just what you see in the panel.”
And, when it comes to upgrading your aircraft’s avionics to today’s standards, it’s not just the cockpit that needs your attention.
“Take a hard look at connectivity options in some form. By and large, people want to be able to stay connected in the air like they do on the ground,” said Tony Raines, large cabin aircraft sales manager, Stevens Aerospace and Defense Systems. “There are options from simple text-only type solutions to systems fully capable of streaming anything you want, when you want it, and with many people doing it at the same time.”
“Your airplane may be ‘capable of being upgraded’ but a similar aircraft that is ‘already upgraded and capable right now’ will most likely get looked at first and possibly purchased, and your plane may not ever be considered,” he added.
To Upgrade or Not. That is the Question
If you’ve read this far, the answer is solid: It depends. Like everything in aviation, there are variables and compromises to whether or not your new GPS navigator, touchscreen EFIS, or autopilot will net you a gain.
Of course, there is an option we haven’t discussed yet: You can do nothing. That’s right, if you’re looking to sell in the next few months, all of our experts agreed that your best solution is to just leave the panel alone – albeit fix whatever is broken – and let the buyer install the avionics they want. There’s a risk in whatever you decide to do. To minimize stress, the best thing you can do is to approach it logically and talk to an experienced avionics installer or aircraft appraiser. Their insights may well help you set a course of action that will help you make informed decisions.
So, to answer the ultimate question: Will an avionics upgrade help increase your aircraft’s selling price? The truth is, you won’t know that until the buyer hands you the check.