How Engine Time Affects Aircraft Value: What to Pay for a Mid-Time, High-Time or Run-Out Engine

This guide is for buyers comparing aircraft whose engines sit at different points in their lives. It turns engine time into a dollar adjustment, shows how to negotiate a high-time or past-TBO engine, and explains how lenders treat a run-out engine when you finance the purchase.

How do you convert engine time into dollars?

Start with the reserve rate: overhaul cost ÷ TBO hours. It is the cost of each hour of engine life. For the terms and TBO figures, see SMOH vs TBO explained. Then value each engine in one of two ways:

• Time-remaining value = (TBO − SMOH) × reserve rate. It shows how much engine life you're buying.
• Adjustment to mid-time comps = (mid-time − SMOH) × reserve rate. Asking prices and comparable sales often assume an average, roughly mid-time engine, so this is the premium or discount relative to those comps.

Worked example. Three otherwise similar four-seat singles with field-overhauled Lycoming O-360s (2,000-hour TBO after overhaul under SI 1009BF). The illustrative overhaul budget is $40,000, so the reserve rate is $20 per hour.

Aircraft A's engine is worth $28,000 more than Aircraft B's. Aircraft C is past TBO, so the arithmetic stops at zero remaining value. In practice, buyers often discount a past-TBO engine a little further for the downtime, the uncertainty of what teardown will find, and the fact that they must fund the overhaul now rather than over years of flying.

If the engine is a factory-new or factory-rebuilt Lycoming on its first run, the reserve rate uses the longer TBO. Lycoming's SI 1009BF lists 2,600 hours for many models, so the same engine budget spreads over more hours. Confirm the model and the logbook before you apply it.

What else besides hours changes an engine's value?

• Calendar age. Hours per year since overhaul matter as much as the total. See the corrosion section below.
• Overhaul type and shop. A zero-time factory engine or a documented overhaul by a well-known shop tends to sell more easily. See field overhaul vs factory rebuilt.
• Top overhauls and cylinder history. A recent top overhaul (STOH) doesn't reset SMOH, but new cylinders on a mid-time engine do reduce near-term risk.
• Prop strike or sudden-stoppage history. Manufacturers generally call for a teardown inspection after a prop strike. Check that it was done and logged.
• Trend data. Oil analysis history, filter findings, compression trends and engine-monitor data turn "probably fine" into evidence.
• Propeller and accessories. Prop time (SPOH), and the condition of magnetos, fuel servo and turbocharger, add their own reserve lines.

How do you negotiate a high-time or past-TBO engine?

1. Get a written quote for that exact engine. Model and dash number decide TBO and price. A quote turns "overhauls are expensive" into a number the seller can't wave away.
2. Price it as run-out, or close to it. Treat any flying before the overhaul as a bonus, not a credit to the seller.
3. Use the pre-buy to back the number. Differential compressions, a borescope of every cylinder, an oil sample and a filter inspection, plus a download of engine-monitor data if there is one. The pre-buy inspection checklist covers the rest.
4. Pick a structure. A lower price, a seller credit at closing, or an escrowed holdback released to the overhaul shop. If the seller offers to overhaul first, you lose control of shop, overhaul type and warranty. Write those into the deal or decline.
5. Count downtime. Plan for several weeks without the airplane, longer if parts are backordered.

Worked negotiation. Comparable mid-time aircraft are selling around $135,000 (assumption). Aircraft B, at 1,850 SMOH, is worth about $118,000 on the reserve math ($135,000 − $17,000). Aircraft C, past TBO, is worth about $115,000 before any extra discount for downtime and teardown risk. A seller asking mid-time money for either one is asking you to fund part of their engine's life.

Why do calendar time and corrosion matter?

Hours alone overstate the health of an engine that sits. Moisture and combustion byproducts left in an idle engine can corrode camshaft lobes, lifters and cylinder walls. Lycoming's SI 1009BF recommends overhaul "within twelve (12) calendar years of the date they first entered service or of last overhaul" to mitigate age-related deterioration. Continental's TBO letter pairs most hour limits with 12 years as well.

Example: a listing shows 400 SMOH on an engine overhauled 17 years ago. That's about 24 hours a year, and the engine is past its calendar TBO. Before paying a low-time premium:

• Check the year-by-year flying in the logbooks. Long gaps are the concern.
• Ask where it was stored (hangar, climate, coastal) and whether it was preserved during inactivity.
• Borescope the cylinders, and ask your mechanic whether a closer look at the cam and lifters is warranted.
• Run an oil analysis. One sample is a snapshot; a history is better.
• Price it between mid-time and run-out unless the inspection is clean. You may be buying an overhaul sooner than the hours suggest.

How do lenders treat run-out and high-time engines?

Lenders lend a percentage of appraised value, and appraisers adjust for engine time. A run-out engine therefore lowers the amount a lender will advance, even if you pay the same price. AOPA's lenders ask for at least 15% down on post-1960 singles and 20% on pre-1960 aircraft (AOPA), and AOPA has said its lenders restrict airframe time to under 10,000 hours (AOPA, 2019).

Example (computed): you buy a run-out single for $120,000 and it appraises at the price. At 15% down ($18,000), the loan is $102,000. At 8% over 20 years, the payment is $853 a month, with $102,761 of interest over the full term. The 20-year term is available because the loan exceeds $75,000. Then you need an overhaul. Your equity cushion is thin, and funding the engine usually means cash or a refinance. AOPA notes that because the aircraft is the collateral, existing financing generally has to be refinanced into a new loan that includes the overhaul.

Some lenders may structure a purchase with a planned overhaul against an as-completed value, with funds held back for the shop. Policies differ, so ask before you make the offer, not after. The other paths are covered in engine overhaul financing. If the appraisal comes in below the price because of the engine, that's a negotiating point, not just a financing problem. See appraisals and loan terms.

Buyer's engine checklist

• Exact engine model, serial number and TBO from the manufacturer's current document.
• SMOH and date of overhaul. Work out hours per year.
• Who did the overhaul, to what limits, and the work order.
• Top overhauls, cylinder replacements and prop-strike inspections.
• AD compliance for the engine and accessories. See reading aircraft logbooks.
• Pre-buy results: compressions, borescope, oil analysis, filter, engine-monitor data.
• A written overhaul quote so your price adjustment is based on a real number.
• Your lender's view of as-is value and down payment before you sign the purchase agreement.

How this guide differs from related guides

This page is the buyer's view of engine time. For definitions and reserve math, see SMOH vs TBO explained. For choosing an overhaul type once you own the airplane, see field overhaul vs factory rebuilt vs new. For paying for the overhaul, see engine overhaul financing. For broader valuation, see evaluating used aircraft value.

Frequently asked questions