A lot of used DA40s in the market at the moment?

[linzhiming]

Hi,

I noticed that the supply of used DA40s in the market has been steadily increasing over the past 3 months (see http://www.controller.com/drilldown/mod ... D&setype=1) and I haven't seen these many in the last 2-3 years.

Does anyone think there is a particular reason for it (besides the fact that the overall DA40 population has increased as a result of production over the last 2-3 years)? Are owners trading them in for other planes such as a DA42 or a Cirrus or even a DA62?

Regards,

Wolfgang

[CFIDave]

I'm not sure there are as many for sale as might be indicated in Controller. Many of the listings are for brand new aircraft without serial numbers, posted by multiple Diamond distributors who sell in various regions of the US.

And there are now multiple listings for new DiamondShare memberships, which are for aircraft not for sale. These planes already have a DiamondShare owner at a particular location, but need 2 or 3 local DiamondShare non-owner "members" who are each willing to sign up for a 1-year commitment to pay roughly $1000/month in exchange for piloting a new (or nearly-new) DA40 XLT for 100 hours/year. A member doesn't have to pay for insurance, maintenance, etc, but only for whatever avgas they use. This program was started by US Diamond distributor LifeStyle Aviation (formerly Dominion Aircraft Sales) about 5 years ago.

Otherwise there's a pretty good selection of used DA40s available due to the typical reasons pilots need to sell including changing financial situations, divorce, loss of their medical, upgrade to a DA42 or Cirrus or something with 6 seats for a growing family, or simply because they're too busy to fly their plane enough. The challenge is to pick a plane that doesn't have a run-out engine, wasn't abused from being on leaseback with a flight school, and that's equipped the way you want.

I still think the "sweet spot" for DA40s for people who can afford one is a good used 2008 XLS model, since it's the first model that includes WAAS for flying LPV/LP approaches and cheap ADS-B upgrades, the good GFC700 autopilot, the 1" taller canopy, and most have Synthetic Vision.

[linzhiming]

I still think the "sweet spot" for DA40s for people who can afford one is a good used 2008 XLS model, since it's the first model that includes WAAS for flying LPV/LP approaches and cheap ADS-B upgrades, the good GFC700 autopilot, the 1" taller canopy, and most have Synthetic Vision

I agree that it is a good sweet spot for people who want all the above that you mentioned. I noticed that the sweet spot has morphed into more of a band from 2008 to 2010 as also 2009 and 2010 planes have essentially gone through the initial depreciation.

Otherwise there's a pretty good selection of used DA40s available due to the typical reasons pilots need to sell including changing financial situations, divorce, loss of their medical, upgrade to a DA42 or Cirrus or something with 6 seats for a growing family, or simply because they're too busy to fly their plane enough.

I was just wondering whether there is a particular negative trend or reason to worry about that is causing more aircraft to be on the market (e.g. have existing owners discovered a more-suitable aircraft after all?).

I bought a 2007 XL aircraft about 2 1/2 years ago (most importantly, I didn't need WAAS as there is no SBAS available in Southeast Asia at present so went for a 2007 instead of a 2008 aircraft). I remember that the used market had quite a lot of used XL and XLS aircraft available at the beginning of 2013, only for that supply to shrink to only a handful of XL and XLS aircraft available through the rest of 2013 and beginning of 2014, and the number of aircraft has grown quickly during the summer of 2015.

Wolfgang

[rwtucker]

Doesn't this discussion need to be informed by the year/year proportion of registered DA40's for sale as compared with the same metric for aircraft we would consider to be comparable? Another metric would compare migration rates across entry-level aircraft.

Apart from these metrics, I can speculate three reasons (other than loss of medical, etc, which seems like a separate issue in that it will affect owners of all GA aircraft by proportion) for selling a DA40:

- Low payload
- Getting close to the 1,000 or 2,000 hour inspections
- Cramped cabin

It plays into this discussion in an indirect way but it is also worthwhile to consider the superior marketing and sales skills of Cirrus and, even, Cessna. In the US, at least, Cirrus has marginalized Diamond.

[rhoab]

Dave,

I have the 2003 listed and based on your comment what is the best way to sell a " runout engine"? Have you ever heard of setting up an escrow to guarantee the next # of hours? Mine is running great and it just doesn't make sense to OH for sale.

[rwtucker]

Dave may have a different opinion but I see no reason not to offer, for example, a decrementing pro-rata guarantee to 2,200 hours,* linked to certified compression tests, etc. If it were me, I would want to exclude burned exhaust valves as well as even more obvious pilot-error induced overhauls. It is not unusual for these engines to pass 2400 hours if they are flown a lot. I have a friend who is over 2,800 hours in an O-360 that is still going strong.
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* Pro-rate the cost of a pre-determined basic overhaul into an hourly cost based on 2,200 hours. Offer to pay 1/2200 of that cost for each hour that mandatory metrics dictate that your engine falls falls short of 2,200 hours.

[CFIDave]

Dave,

I have the 2003 listed and based on your comment what is the best way to sell a " runout engine"? Have you ever heard of setting up an escrow to guarantee the next # of hours? Mine is running great and it just doesn't make sense to OH for sale.

Some flight schools (or leaseback owners) may be particularly interested in a DA40 with an engine near or beyond TBO if it's still running well (i.e., good compressions, not making metal, good oil reports). They can expect to get some good use out of the plane prior to engine overhaul while minimizing the cash outlay for initial purchase.

I think your escrow idea may be worth pursuing. Unfortunately for sellers, most buyers will simply add the cost of an overhaul to the price of an aircraft with a runout engine.