DIMINUTION IN VALUE WHEN

APPRAISING AIRCRAFT

Most Aircraft Values are affected

negatively when there is a

documented record of damage and /

or repair

Merriam Webster defines diminution as the act or process of becoming less; a lessoning or reduction; change toward something smaller or lower; a reduction or decrease. In the world of aircraft transactions when evidence of “damage history” appears in an aircraft’s records the tendency is to reduce (deduction or decrease) the value relative to its peers in the marketplace, known as an Aircraft's Diminution in Value. This category of aircraft damage is a topic of hot debate whenever it arises. Diminution in Value describes the reduction of market value of the aircraft resulting from the damage history, versus an accident free aircraft, even though the physical damage may have been fully repaired, and even though the repair may have been completed by the aircraft manufacturer. If (or when) your aircraft is damaged, appropriate hull insurance coverage will pay to physically restore the aircraft to a serviceable condition. If you intend to keep that aircraft for the duration of its useful life, repair is probably sufficient. Therefore Diminution in Value likely does not affect you to the same degree as an owner motivated to sell. But what if you want or need to sell the aircraft and the repair work was documented in maintenance logbook entries or the damage was severe enough to require the filing of an FAA Form 337? What is the impact on the Fair Market Value of that repaired damage when similar aircraft with no damage history are on the market at the same time. A Certified Aircraft Appraisal and answer that question. Factors the AERONUVO Aircraft Appraiser may include are: • The type and extent of the damage. • The method and quality of repair. • How long ago the damage occurred. • How the repair was recorded in the aircraft’s maintenance logbooks. • The sales market for the aircraft type that suffered the damage. Fortunately, you can now cover the reduction in the aircraft’s resale value following an accident using so-called ‘Diminution in Value Cover’ insurance. This can now be arranged to reimburse the insured, not only for the cost of repairs, which is paid for under the Hull All Risks/War Risks policies but also a fixed amount agreed at the inception of the aircraft insurance for the reduction in final value. The real advantage of this coverage is that the claim is paid out as soon as the damage is ascertained. AERONUVO delivers certified aircraft appraisals for select aircraft from such makers as Aeronca, Aero Commander, American Champion (ACA), American General, Aviat Husky and Pitts, Beechcraft (Beech), Bellanca, Citabria, Cessna, Cirrus, CubCrafters (Cub Crafters), DAHER SOCATA, Diamond, Ercoupe, Glasair, Great Lakes, Grumman American, Lancair, Luscombe, Maule, Mooney, Piper, Rockwell Commander, Stinson and More. AERONUVO provides its customers with our unique and customized aircraft appraisal services at many airports in some instances with no added cost in the states of Virginia (VA), West Virginia (WV), Pennsylvania (PA), Maryland (MD), Delaware (DE), North Carolina (NC) and New Jersey (NJ).