The re-sale market

Guest Discussion
1

Question to the community: Is it a good or bad thing that SR-20’s are being sold/re-sold at very healthy premiums? I don’t mean is it a good or bad thing in terms of right and wrong. I mean what does this suggest for the future of the plane?

For those who already have positions – I’m guessing it means “congratulations, your plane will be highly valued, and thus if you ever need to sell it, you will probably get a great return on your money!”

I think this is one of the best reasons for buying a Cirrus, apart from the flying of it. I don’t read a lot on this board about the economic realities of buying something this expensive, but for many of us, this is the second biggest purchase we will ever make (after a house). And I think the fact that the indications are the SR-20 will retain its value, if not increase in value, makes it a much more realistic airplane to own for those of us who stay up at night pondering such an expense.

Consider if your plane is worth 20K more than what you paid for it – that’s several FREE years of flying!!! Plus, if you have to part with the plane, I don’t think you’ll be sweating as you wait for the phone to ring, or placing countless ads in Trade-a-plane.

Bottom line: The Sr-20 has two parachutes. One for flying, and another for the pocketbook.

Good job Cirrus Design!

2

It’s all great news!

The SR20 will prove to be a great investment, barring some catastrophic mechanical or systems problem, of course.

Cirrus has made a HUGE bet on an aggressive pricing/volume formula that no GA company has dared to try since the 1970s. God bless Cirrus! This bold bet means Cirrus needs to sell 500 to 1000 planes a year to make money. It’s the opposite strategy of Mooney or Commander, which are more or less custom shops.

To seed the market, Cirrus has decided to absorb losses on its initial run of SR20s. Any early SR20 buyers are getting a superb airplane that is worth 20-percent more out of the chute than what Cirrus has charged for it. To see 30-day positions offered for $260K reflects the real market value of the SR20.

The SR22 and later versions of the SR20 probably won’t spike as much, simply because Cirrus will price them closer to the break-even point or beyond.

Still, I suspect even the later planes will hold up nicely. High performance combined with low maintenance and insurance and modest fuel costs is THE winning formula for price appreciation. Cirrus resale values should easily outperform comparable retractables.

This rosy scenario assumes no Piper Malibu-like problems, of course, or any unforseen wear problems with the composite frame.

Question to the community: Is it a good or bad thing that SR-20’s are being sold/re-sold at very healthy premiums? I don’t mean is it a good or bad thing in terms of right and wrong. I mean what does this suggest for the future of the plane?

For those who already have positions – I’m guessing it means “congratulations, your plane will be highly valued, and thus if you ever need to sell it, you will probably get a great return on your money!”

I think this is one of the best reasons for buying a Cirrus, apart from the flying of it. I don’t read a lot on this board about the economic realities of buying something this expensive, but for many of us, this is the second biggest purchase we will ever make (after a house). And I think the fact that the indications are the SR-20 will retain its value, if not increase in value, makes it a much more realistic airplane to own for those of us who stay up at night pondering such an expense.

Consider if your plane is worth 20K more than what you paid for it – that’s several FREE years of flying!!! Plus, if you have to part with the plane, I don’t think you’ll be sweating as you wait for the phone to ring, or placing countless ads in Trade-a-plane.

Bottom line: The Sr-20 has two parachutes. One for flying, and another for the pocketbook.

Good job Cirrus Design!

3

There have been a few planes offered so far but no reports on this forum of any of them being sold for a large premium. Did I miss something?

4

There have been a few planes offered so far but no reports on this forum of any of them being sold for a large premium

Positions are being sold. I’m aware of a number of them, and while I can’t give specifics, the premiums paid have varied from $5000-$25000. This is on top of the current list price, i.e. the seller gets the premium plus the price difference between his contract price and the current price.

5

There have been a few planes offered so far but no reports on this forum of any of them being sold for a large premium

Positions are being sold. I’m aware of a number of them, and while I can’t give specifics, the premiums paid have varied from $5000-$25000. This is on top of the current list price, i.e. the seller gets the premium plus the price difference between his contract price and the current price.

I recently purchased a position for the current retail value. No premium was paid.

6

Just a test of the mail forwarding…

7

I recently purchased a position for the current retail value. No premium was paid.

The premium would presumably depend on where the position was, right? As a market gauge, would you mind saying whether your position was for delivery:

– within 2000

– in the first half of 2001

– second half of 2001

– later than that

Thanks jim f.