Piston power

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chili4way
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Re: Piston power

Post by chili4way »

Joel, I've been a satisfied customer of Piston Power and their first Diamond client. Their value proposition works for me as a first-time airplane owner, with a new DA40NG (which has fewer maintenance location options), and a shared-access arrangement with two (and up to three) other pilots. There is no magic in their financial model, you'll pay about the same total amount for scheduled maintenance, and depending on the program options you select, the scheduled engine overhaul. Piston Power doesn't cover the cost of ADs and situations that are covered by insurance. There are some modest provisions for addressing AOG situations.

I like being able to tell the other pilots I share the plane with is that they never need to worry about me skimping on or deferring MX or hitting them up with a special assessment or price increase when it's time to overhaul the engine. It's all built into the financial model.

What may be more difficult to quantify is the cost-to-value of the coverage of non-scheduled maintenance (after the warranty, if applicable), and the value you place on having a Diamond-specific "Mike Busch"-like person helping you sort out maintenance situations. (Savvy offers nothing for piston diesel engines.).

The price per hour varies primarily with the relationship between the cost of MX events driven by the calendar and those driven by engine operating time, adjusted annually based on your expected flight hours. There is a reasonable provision for adjustments due to increases in parts or labor costs. If you opt for the overhaul program, the money accrued is transferrable to your next plane or can be included as part of the value proposition to the next owner. Vref will value your plane as if it has a zero-time engine when your plane is in the overhaul program.

I started the program with a new plane. The costs of onboarding an experienced plane depends on where it is on the scheduled MX timeline, the parts & labor of the scheduled MX events, some industry history on parts & labor of unscheduled MX, and the engine hours remaining before TBO. They offer various combinations of engine & airframe coverages.

Ron & Remy (my two business contacts) do business in a business-like fashion and have been a pleasure to deal with. They are open to reasonable proposals to tailor the program to your situation. When a new-to-Austro MX shop took 2X more hours than standard to complete my first 100 hours MX, Piston Power paid the full amount. (They then helped me find a different, more experienced shop to do my 200 hours and annual.). Piston Power took me out of the financial loop on a couple of warranty claims.

As I said, there is no financial magic, all of the financial aspects of the Piston Power program are things you can self-fund if you have the means and/or discipline. Don't expect Piston Power to save you money on your MX. They will make your MX costs very predictable on an annualized basis and provide a knowledgeable second opinion when you need it.
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Mjwatlanta
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Re: Piston power

Post by Mjwatlanta »

It's now been about two years since this topic was last discussed. Hopefully there is a knowledge base that can help me answer the question: Do I want to pay Piston Power or self insure? Here is what Remi said in his email to me relating to tip to tail coverage for my 2019 DA40 NG that has about 50 hours:
"what you are talking about is the one time buy-in ($1850 for engine and $300 for the airframe) and enrollment $2500. That gets us to zero. Then you are billed for the annual utilization you choose. 100hrs/$185 125hrs/$175 150hrs/$165. We pay for all the future, scheduled and unscheduled maintenance. Reserves are fully transferable.

I have always had extended warranties on various pricy German cars and without exception each has been a good investment. But this is in a whole different league price wise.

How is this working out for everyone?
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hifiaudio2
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Re: Piston power

Post by hifiaudio2 »

Between Paul's awesome spreadsheet that he created, and my own research, I came up with much closer to ~$80-$85/hr for scheduled maintenance. So a guaranteed expense of an extra $80-$100 every single hour that would only help me if there were a long of unscheduled, out of warranty expenses didn't do it for me...

I also am in a leaseback situation, so it tremendously cut into the profit / breakeven I am shooting for.
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Mjwatlanta
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Re: Piston power

Post by Mjwatlanta »

I decided against piston power. One concern Is the total lack of regulation and insurance covering piston power. It’s a little like Baileys savings and loan from it’s a wonderful life. My money goes for your engine, and your money pays for Tom’s engine, and so forth - But without the pesky bank examiners. So if there is a run on the “bank,” it’s possible there will not be enough money. Imagine paying five years of payments, then needing a $35,000 engine and there being no money. Without regulation or insurance that’s possible. Hopefully unlikely. But if the point Is to control risk, this does not provide a risk free solution. I think I’m better off self insuring. I did ask Piston Power about this and they assured me I had no reason to worry. Think Bernie Madoff and Enron and ….
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TimS
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Re: Piston power

Post by TimS »

Michael,

The founder of Piston Power is Ron. (He is/was the CEO also when I talked to them a few years ago). Ron built and sold a large company for the turbine world doing exactly what Piston Power is attempting for pistons (I forget the name of the turbine company; you can ask Ron, he will gladly tell you). In fact, when you dig into it, Ron has structured the company in an almost identical fashion.
Lastly, I know for the avgas engines the pricing is actually based on statistical models for which Piston Power has gathered extensive fleet data. The financial structure of Piston Power more closely mirrors universal life insurance companies than pay as a you go vehicle insurance companies.

Tim
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MackAttack
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Re: Piston power

Post by MackAttack »

Has anyone done a comparison between Piston Power over time with a base Diamond warranty, versus getting an extended Diamond warranty and no Piston Power (or maybe adding it after warranty expiration)?

Thanks!
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Mjwatlanta
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Re: Piston power

Post by Mjwatlanta »

Let me be clear, I talked to the piston power people. They seem very professional in every way. Indeed, I have no knowledge of anyone who uses them even complaining. Nevertheless, it is essentially an unregulated insurer and that does involve risk. For many, that is a risk worth taking. That risk, combined with my use expectations, convinced me it is not the best fit for my needs. For many others it will be. I certainly do not have any reason to think the company will fail. But banks and insurers and stock brokers have, and they at least were supposed to be regulated and monitored.
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chili4way
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Re: Piston power

Post by chili4way »

MackAttack wrote: Thu Jan 12, 2023 12:37 am Has anyone done a comparison between Piston Power over time with a base Diamond warranty, versus getting an extended Diamond warranty and no Piston Power (or maybe adding it after warranty expiration)?
My spreadsheet (for a DA40NG) provides a lot of the information needed for this analysis. It's still challenging as certain assumptions and considerations can swing the results.
  • what's the scope of scheduled MX (e.g., number of service hours)
  • how does this scope affect the value of the airplane when sold
  • how many years will it take to get there?
  • are the funds for the high MX events (600, 900 hours for an Austro) accrued, and what return do those funds receive (and are they insured)?
  • are the engine replacements/overhauls included, and what return do those funds receive (and are they insured)?
  • what is covered under "unscheduled MX," and is it different from what would be covered under a manufacturer's standard or extended warranty? (what wear-and-tear items, if any, are covered? are there any AOG provisions?)
  • who is flying and where (more critical for DA40NGs than DA62s if used in club or flight school, may affect DA62s if used in Part 135)
  • where is the plane serviced? (affects shipping and labor costs, assuming parts costs are the same)
If your question is solely about the cost of "warranty+unscheduled" vs. "extended warranty", that's particularly difficult because Piston Power doesn't provide this as a stand-alone coverage, and it isn't broken out in their "power by the hour" pricing.
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