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Buying an Airplane?

by Darren Smith, CFII/MEI
March, 2008


I'm considering buying a cessna 172.  What are the negatives?

There is a thought that enters the mind of every pilot as soon as he learns to solo: I want to buy an airplane. Common wisdom says that if you plan to fly 300 hours a year, you could own your own aircraft.  Sometimes folks can't believe that and write to my wondering if that's really true.  So let's settle the question, "Should I Buy or Rent?"

Buy or Rent

How much are you currently spending on aircraft rental?  If you fly 50 hours a year, then you're already spending $5,000 a year.   Here's the costs for one pilot who purchased a used Cessna 172 for $53,000:
  • Financing - monthly payment for an 8 year loan at 9.15% = $781 / month
  • Insurance - monthly payment for $1,860 annual policy = $155 / month
  • Tiedown - grass tie down at the airport = $60 / month
  • Annual Inspection - uncomplicated annual inspection on a C172N $1,800 = $150 / month
Phew that's a total of $13, 752 yearly or $1,146 / month.  It doesn't include variable (operating) expenses:
  • Fuel - 8 gal per hour times $4/gal = $32/hour
  • Oil - $1/hour
  • Maintenance - minor maintenance and engine reserve - $20/hour
Phew that's a total $53/hour plus your fixed costs of $13,752 yearly.  Consider this spreadsheet:


50
hours
100
hours
125
hours
150
hours
175
hours
200
hours
250
hours
275
hours
300
hours
Fixed/Yearly
Costs
$13,572
$13,572 $13,572 $13,572 $13,572 $13,572 $13,572 $13,572 $13,572
Variable/Hourly
Costs
$2,650
$5,300
$6,625
$7,950
$9,275
$10,600
$13,250
$14,575
$15,900
Total Yearly
Costs
$16,222
$18,872
$20,197
$21,522
$22,847
$24,172
$26,822
$28,147
$29,472
Hourly Cost
$324.55
$188.72
$161.58
$143.48
$130.55
$120.86
$107.29
$102.35
$98.24

From this spreadsheet, you can see that if you fly 50 hours a year as an owner its going to cost you $16,222 for this hobby or $324.55 per hour.  Whoa, did you just see that?  You went from spending $5,000 a year to spending more than 3 times that figure.  In fact, you'd have to fly 300 hours a year to break even compared to renting. 

Selecting an Airplane

Let's say you're loaded and you can afford an airplane for however many hours per year you'll fly.  Here is a checklist of items you should consider when selecting your aircraft.

Step One:
Your Needs

Step Two:
Searching for an Aircraft
Step Three:
You Found an Aircraft You Like
Range/Distance
Cruise Speed
Seats
Avionics
Gear
Payload
Its Age
Interior and Exterior Condition
Engine - Time remaining
Propeller - Time Remaining
Annual Inspection Cost
Hourly operating costs
Total flight time
Compliance with ADs
Last inspections
Damage History & Overall Condition
Avionics Installed
Price, Liens, Financing

Closing in On Your Dream

You've found the aircraft of your dream and everything seems to be in line with your expectations.  Now its time to do the real work.  You'll need to arrange the following:
  • Your inspection
  • Prepurchase mechanical inspection / records review
  • Test flight
  • Your final price (check the Vref)
  • Financing your purchase
  • Closing the deal (liens & title insurance)
Other Ownership Resources

CK's Ownership Page
Flying Magazine - Why You Should Buy a New Airplane
Tips On Buying an Airplane

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