Aircraft Diminution of Value Appraisals
Independent appraisals that measure the lasting loss in market value after an aircraft is damaged and repaired.
A Repaired Aircraft Isn’t Always Worth What It Was
Once an aircraft has damage history, that history stays in its records and has to be disclosed to future buyers. Even after a proper repair, many buyers will pay less. The difference between the aircraft’s value before the damage and its value after repair is its diminution of value.
A diminution of value appraisal puts a documented number on that loss. Owners use it to understand their position, sellers use it to price realistically, buyers use it to negotiate, and lenders use it to reassess collateral.
How We Appraise Diminution of Value
- Value before the damage event, based on comparable sales
- Value after repair, based on how the market prices similar damage history
- Severity, location, and type of damage
- Quality and documentation of the repair
- How sensitive buyers of that model are to damage history
What Makes the Loss Larger or Smaller
No two damage histories affect value the same way. Some of the factors buyers and appraisers weigh most:
Structural or cosmetic damage.
Damage to primary structure usually concerns buyers more than damage to fairings, interiors, or paint.
Engine and propeller events.
A prop strike or sudden engine stoppage requires specific inspections and repairs, and buyers look closely at how they were documented.
Repair approval and documentation.
Repairs done to manufacturer or FAA-approved data, with complete work orders and sign-offs, hold value better than repairs that are hard to trace.
Repeat incidents.
An aircraft with more than one damage event in its records is usually harder to sell.
The model’s market.
In some segments, buyers have many choices without damage history; in others, supply is tight and the discount is smaller.
Who Uses a Diminution of Value Appraisal
- Owners whose aircraft was damaged and repaired
- Sellers pricing an aircraft with damage history
- Buyers evaluating an aircraft with damage history
- Lenders reassessing collateral after a damage event
- Owners preparing to discuss a claim with an insurer
If the diminution of value is in dispute or headed to litigation, see Damage Analysis in our Expert Witness Services for analysis and testimony.
Records You’ll Need for a Diminution of Value Appraisal
- The aircraft’s logbooks from before the damage event, to establish its condition and value beforehand
- Repair work orders, invoices, and sign-offs
- FAA Form 337 or other approval documentation for major repairs
- Photos of the damage and the repair, if available
- The insurance adjuster’s report or repair estimate, if a claim was filed
- Any inspections performed after the repair
Desktop or Onsite Diminution of Value Appraisal
Every diminution of value appraisal is certified and can be relied on by insurers, lenders, and attorneys. Choose desktop or onsite:
| Certified appraisal option | How it fits this service |
|---|---|
| Desktop diminution of value appraisal | An early estimate based on repair records and market data |
| Onsite diminution of value appraisal | Inspection of the repair and logbooks when repair quality is a factor |
When to Get a Diminution of Value Appraisal
The appraisal is usually done once the repair is complete, because the value after repair depends on what was repaired and how it was documented. Owners who expect to sell or to discuss the loss with an insurer often request it soon after the aircraft returns to service, while records and details are easy to gather.
A desktop estimate can also be prepared earlier, from the repair estimate, when a decision cannot wait.
Your Appraiser: David Fisher, ASA
David Fisher is an ASA Senior Accredited Appraiser who appraises both fixed-wing aircraft and helicopters. As an FAA A&P mechanic with Inspection Authorization, he reviews component status and records with a maintenance professional’s eye. He served as a U.S. Air Force crew chief, later worked as a branch manager for GE Capital Aircraft Financing, and has bought, sold, brokered, and appraised aircraft for more than 30 years, across more than 300 transactions.
Frequently Asked Questions
Does the aircraft need to be repaired before the appraisal?
Usually, yes, because the value after repair depends on the repair itself. When a decision is needed sooner, a desktop estimate can be prepared from the repair estimate and updated once the work is done.
How is this different from Damage Analysis?
What is aircraft diminution of value?
It is the lasting loss in market value an aircraft carries after damage and repair, even when the repair meets standards. It’s also called diminished value.
Does every damaged aircraft lose value?
Most do, but the amount varies widely with the severity and location of the damage, the quality of the repair, and how buyers of that model react to damage history.
Can a diminution of value appraisal be used for an insurance claim?
Yes. Whether diminution of value is recoverable depends on the policy and jurisdiction, but a documented appraisal is the starting point. For disputed claims, see our Insurance Matters and Damage Analysis services.
Need to Know What Damage Did to Your Aircraft’s Value?
Tell us about the aircraft, the damage, and the repair. We respond within one business day.