Adam, a private pilot in Georgia, writes: I’m tired of the hassles of renting to feed my passion. It’s time to pony up and become an airplane owner. I’ve read up on everything and think I know what I’m in for. But I do have one item that I’m getting differing opinions on, so I’d like your wisdom: Should I go for a good deal on an older airplane and have some money left over to make it nice, or should I go for something newer, basically buying all the airplane that I can afford? My budget is more in car-buying territory than in house-buying territory.
I’m glad you’ve done your research, but just to make sure nothing got overlooked, there are a couple of money things that I think all potential airplane buyers need to understand before I dig into the older vs. newer issue.
All of these “money things” boil down to the fact that — contrary to logic — the purchase price of an airplane isn’t what an airplane costs. No, the purchase price is just the cost of admission. There are on-going expenses that are unique to airplane ownership, with the main ones being: Maintenance, storage, and insurance.
All three are harder to estimate than you might expect and all three are inflationary in nature.
Maintenance
Airplanes are required to have a heavy maintenance inspection each and every year. Don’t let the quoted price for an “annual” fool you. That’s just the cost to figure out what the real cost will be.
It’s rare that an annual inspection doesn’t find something that needs to be addressed. Not infrequently, that “something” is as expensive to fix as the annual itself — oftentimes more.
And don’t think that you’ll only need maintenance that one time each year. With airplanes, things have a way of cropping up, popping off, or breaking down.
And sometimes, you can be flying along minding your own business, and then the government comes along and requires something expensive for your bird in the form of a new Airworthiness Directive.
None of these are reasons not to become an owner, but just know that if you innocently plugged the quoted cost of an annual into your “Can I Afford an Airplane?” spreadsheet as the maintenance line item, you’ve not budgeted nearly enough. I speak from experience here.
Storage
Next, unlike a car, which you can pretty much park anywhere, an airplane needs to live at an airport. And in most parts of the country, airport real estate is not cheap.
Be sure you know what the cost of a home for your new bird will be and make sure that there’s actually room at the inn. Some airports have years-long waiting lists.
A hangar is always best, followed by a hail shade, followed by a tie-down. Which you need depends on the type of airplane, the type of environment, and the type of flying you do.
If anyone wants more thoughts on that, send in a question, and I’ll expand on it in a future column.
Insurance
Finally, a quick note on insurance, where things are starting to get a little weird.
It used to be that as you got more time in type, your rates went down. Insurance rates don’t seem to be going down for anyone that I know anymore. Rather, some pretty good jumps are happening year after accident-free year.
At least until you get older — then, you might not be able to get insurance at all. I know several grounded senior pilots, and they aren’t exactly ancient. So much for respecting experience.
Can you fly without insurance?
Actually, unlike with cars, you can legally fly without being insured. But you are exposing yourself to an awful lot of risk — and I’m not just talking about the unreimbursed loss of the airframe in an accident.
Have you seen those pictures of vultures circling above some poor dying beast in the desert?
The same thing happens with lawyers and airplane accidents. If you bend metal, there’s a good chance someone will sue you, so all your assets are at risk if you fly uninsured.
Older vs. Newer
Now on to the older vs. newer question, which is another way of saying cheaper vs. not-so-cheaper.
As you defined your spending territories, I know a new Cirrus is out. Along with a new Cessna, Piper, Bonanza, etc. Or even a lightly used airplane.
At car-buying prices (and remember, readers, according to Edmunds, the average price for a new car is “down” to $47,338), we’re solidly in the Wild West of used airplanes.
So that being said, if you buy a cheap airplane — say anything under $25,000 — you should expect to put that same amount of money into it in the first year and a lot more if the engine is high time and runout.
So should you have bought a $50,000 airplane instead? Maybe, but not necessarily.
I think a good way to look at it is to think about real estate, even though you aren’t buying at that level.
Still, as a thinking exercise, if you buy a brand new house, it costs a LOT more money than buying an old house, right?
But for your money you have a new dishwasher. The wiring is up to code. The furnace has a warranty. The door and window seals aren’t drafty. The carpet is nice.
On the other hand, if you buy a much older “used” house, you pay a lot less (at least compared to new construction in the same market) but now you might have some things that will need to be fixed.
Some will be minor. The water heater doesn’t, you know, heat water. Some might be major. The shingles on the roof are shot and, unless you want to take a shower in your living room, they ALL need to be replaced.
Then there are surprises. Termites?!! Are you kidding me?
So, Adam, if you were buying a house today, would you go new construction or This Old House?
Buyer Beware
Of course, when buying an old house, you’d get a home inspection first. And when buying a used airplane you should get a pre-buy inspection.
That said, I know quite a few aircraft owners who had pre-buys that missed some pretty big, and expensive, stuff.
You should absolutely get a pre-buy, but don’t think that it makes a purchase 100% safe. There’s just a lot of things that can go wrong in a complex piece of machinery such as an airplane that can be hard to spot.
Airplanes are the same as houses when it comes to the ratio of purchase price to repair bills. Of course, even if you could afford a new airplane, things will probably still break down, but at least they are under warranty.
And while the older an airplane gets, the more things get worn out, I think that there is a sweet spot between “break-in” and “break-down,” although I don’t know exactly where it would be. In years, probably seven to 10. In hours, probably 800 to 1,000.
The more that I think about it, the perfect airplane — a perfect 10 — would be 10 years old with 1,000 hours on it.
Is that car-priced or house-priced? Probably much closer to house-priced.
So where does that leave you? Should you go cheap and be ready to open your wallet again after you register your new ride? Or should you buy all the airplane you can afford?
After my own experiences, and watching what has happened to other airplane buyers I know, I’d say go towards the newer end, but not as far as “the most airplane you can afford,” as some folks recommend.
You want to have a cash reserve, just in case of termites.
I was exactly where you are a year ago. Went the used Van’s RV route and could not be happier. Went so well that my wife just started her private training.
Do the annual, or in this case condition, inspection as the pre buy inspection. Also figure out where you are going to hangar your new baby. In some places that can take much longer than you might anticipate.
Partnership,Partnership,Partnership,.
Very few of us ,including me , can justify supporting an airplane alone.
Find 3 like minded guys or ladies and buy something older that fits your mission.
I can testify to the fact that the view will look exactly the same from my ’66 C-172 that I bought in ’84 as it will from a brand new Cirrus.
Rich
Mike Busch’s Airplane Ownership Vol 1 talks a little about how to buy an airplane, and goes into great detail about insurance and how to manage inspections, maintenance, and repairs.
As far as the inspection goes, have the most critical component of the plane (the engine) inspected first. If it doesn’t pass, no need to do the rest.
$12,000 a year minimum fixed cost for me. That’s with average annual cost.
I rented for a few years, it was terrible. Planes were typical rentals, dirty inside and out. Never knew who flew last and the abuse the plane took. Scheduling was always a problem.
Don’t be afraid of older planes. Look locally as much as you can.
Look at the availability of shops that are familiar with the make you are interested in. So many airports don’t have any maintenance available.
Just my belief, but I believe the market has topped. That might not matter but don’t be shocked if your value goes down. You are not loosing money as it is already known as a bad investment.
As the author points out, with newer or older planes large expenses can crop up – either a major discrepancy or component overhaul due or an AD from the feds. But there are some things that you KNOW will make your ownership expensive: an airplane that has sat idle for a long time, or one that routinely goes long periods without being flown, an airplane kept in a high corrosion environment (here’s looking at you, Florida) and an airplane that’s been stored outside for long periods. A good – I mean really good – pre-buy* (the ones I’ve had done take 10 – 12 hours) should unearth most of the uglies. A good A&P will make sure all ADs are complied with, check for damage history, clean logbooks, etc. He/she will remove all panels and scope everywhere that’s accessible by boroscope and should be able to give you a good idea what it will really cost to get the bird up to snuff. At current airplane prices, that will still probably be less than a new airplane.
* I went through 3 pre-buys before making a purchase. They weren’t cheap, but they were the best money I spent on airplane ownership.
I went the route of renter, flying club member, partnership, sole owner. Each step along the way I learned about airplane insurance, storage, maintenance and government regs.
My partnership experience was wonderful… shared costs 4 ways, including all the unexpected things that come up..
I bought into the partnership in a PA-28-161, without a prebuy inspection. Within 6 months we had a $13,000 bill for a top overhaul for 4 cracked cylinders.
After 12 years, I bought a 1976 Cessna Cardinal fixed gear. The type club, Cardinal Flyers Online, has an extensive pre-buy checklist. It includes items for all the gotchas that have appeared with that bird, over the years. I had a reputable shop do the pre-buy, using that checklist and determined it was a very clean airplane. I’ve owned it for 9 years now, and I’ve flown it all over the country, and it’s been a joy to own.
Do your research, get competent people involved to help, use type-club resources, and enjoy the process, the learning.
Early 2022, I’ve bought a 1975 Cessna Cardinal RG for 3/4 of the budget that I had planned. After a year, a few repairs became necessary. Although it is my aircraft, I share it with a retired airline pilot and CFII in order to have it fly at least 100hours per year.
I make provisions for maintenance cost, future engine overhaul and other costs (hangar rent, insurance, database updates and IFR checks) and with 100 hours annually, the aircraft costs me $236 per flight hour.
If I would fly only 50 hours annually, the hourly cost would go up to $330.
Ok, I fly in Europe, where gas prices are 9 times those in the US, but nevertheless. If you envisage flying 100 hours per year or more, it could be worth it owning one (from a financial standpoint). If not, I recommend renting.
My personal experience, for what it is worth.
Big endorsement for what Jim and Jeff had to say .. the fixed overhead (hangar, maintenance, insurance) will surprise you if you don’t fly at least 150-200 hours/year. Factor them along with your variable expenses (fuel, oil, engine reserve, upgrades) and you’ll find your hourly cost close to your rental fees. One consideration might be going the experimental route but be very well acquainted before you jump in.
Adam. There is a key element missing in this discussion. While JimH makes an excellent point for partners (I’ve had ‘em…and would again). The missing element is mission. Of my 77 years on this planet five have been spent buying and selling aircraft (150s -421’s)for my lively hood. 8-9 owning a New England FBO and I am an A&PIA/CFI and currently own.. well.. more than one…The first questions always have to be “where are you flying? What are your legs going to look like? And who, realistically, is going with you?” THAT should define YOUR airplane. I’m a STRONG advocate of well researched older airplanes. Unless you are going to rocket around the country, medium speeds and minimal moving parts make for less expensive in the long run. The cheaper the hull, the cheaper the insurance (usually). The older C182/PA 28-180/235 are plenty fast and capable. Buy what you are going to use. IF.. you find a compatible partner with similar missions but alternate schedules it does usually work. Treat it like a business. Write it down. There are whole books written on these subjects. Enjoy the freedom but remember to go use it. If you are NOT using it 50+ hrs/yr sell it and go back to renting. That said don’t buy something you can’t re sell easily. The folks here at GAN know how to reach me. Feel free to reach out.
The question hinges on what kind of flying you intend to be doing. Are you staying close to home or roaming about the country? How fast do you want to get to wherever you want to go? That will help refine your specifications. First off, look into a partnership. If you don’t need to be airborne all the time and if you are successful in relationships (think marriage), that will greatly spread your costs and allow you to get more of an airplane than you can afford by yourself. The second consideration is Experimental. With a factory-built airplane, you are stuck with technology frozen in the 1950’s. Yes, they fly very well – the bad aircraft have revealed themselves over time and largely disappeared from the market. However, Experimental aircraft technology has evolved as materials, fabrication, and design technologies have developed. You take a risk that the aircraft was designed and built competently, but the bang for the buck in ‘homebuilt’ aircraft is significant. The easy answer is to buy a used Van’s RV after looking it over with another builder. Problem solved. But there are other hugely capable and affordable Experimentals that are well worth a look.
Adam. There is a key element missing in this discussion. While JimH makes an excellent point for partners (I’ve had ‘em…and would again). The missing element is mission. Of my 77 years on this planet five have been spent buying and selling aircraft (150s -421’s)for my lively hood. 8-9 owning a New England FBO and I am an A&PIA/CFI and currently own.. well.. more than one…The first questions always have to be “where are you flying? What are your legs going to look like? And who, realistically, is going with you?” THAT should define YOUR airplane. I’m a STRONG advocate of well researched older airplanes. Unless you are going to rocket around the country, medium speeds and minimal moving parts make for less expensive in the long run. The cheaper the hull, the cheaper the insurance (usually). The older C180/182/PA 28-180/235 are plenty fast and capable. Buy what you are going to use. IF.. you find a compatible partner with similar missions but alternate schedules it does usually work. Treat it like a business. Write it down. There are whole books written on these subjects. Enjoy the freedom but remember to go use it. If you are NOT using it 50+ hrs/yr sell it and go back to renting. That said don’t buy something you can’t re sell easily. The folks here at GAN know how to reach me. Feel free to reach out.
FWIW I don’t recommend a “pre-buy inspection” at all. There are absolutely no legal standard for a “pre-buy inspection” so the mechanic can do however much, or little, he wants. I do recommend to get an ‘annual inspection” instead.
An “annual inspection” has specific items that must be covered, and some very specific to the make/model. The IA doing signing off the inspection has responsibility in the process since he has to sign it off WITH his A&P/IA certificate number. This also gives the buyer an aircraft with a fresh annual.
If during the “annual inspection” an item is found that makes the airplane “non-airworthy” it is either fixed at seller’s expense or the sale is off. Note, “non airworthy” does not mean things like new tires, new spark plugs, etc. If the IA finds something that “should” be done then that falls on the buyer to decide and pay but it does not cancel the sale. BTW, the buyer pays the mechanic.
That is how I bought my airplane and it was everything the seller and I expected. No surprises at all.
My 2 cents…
An Annual (vs Pre-Buy) is good IF:
Make sure it is NOT done by the mechanic that usually works on it.
Make sure it IS done by a mechanic that has never seen it (or the seller) before and can provide an honest, independent, inspection of the vehicle; otherwise you may be pencil whipped as just as badly as a corrupt prebuy result.
Whether newish or old, remember that besides the mentioned expenses, you’re gambling with $45,000 to $70,000 that the engine doesn’t go kablooey badly enough to need replacement. If not owning an airplane is bad, owning one and not being able to repair or sell it is far worse.
Only a relative few light GA owners will fly enough or be lucky enough to beat the costs of renting, which, assuming one get renters’ insurance, is financially surprise-free. Of course renting has availability and use restrictions.
A club or joint ownership is BY FAR the best option for those without very deep pockets. One can get more airplane for the initial purchase, fixed costs are dramatically reduced and the risk presented by a surprise very expensive repair is mitigated. With a small number of partners, availability will usually be close to 100% but costs lower. A larger club will cut availability but cut risk and cost even further. AOPA has extensive information regarding partnerships and club arrangements.
I own an old Cessna with 3 other pilots, as ‘co-owners’ , per the FAA.
We split the fixed costs; hangar, insurance, annual, repair parts.
When we fly the aircraft, we put it back in the hangar with full tanks, so we each pay for our fuel as we go.
Additionally, we put $15 per hour in a maint. fund, which has covered a number of large expenses.
Even with 4 of us, the aircraft barely flies 100 hr a year.
We ‘schedule’ by email, and it’s worked well for the last 15 years..!!