What does it cost to own and operate an airplane?
I discuss my own airplane ownership experience and cover Finance, Insurance, Maintenance, Upgrades and Add-ons, Hangar vs Tie-down, and engine reserve. I’ll also share my strategy for ensuring there are no surprises when it comes to paying for airplane maintenance.
The instrument rating did not significantly reduce the insurance premium; it was the hours that mattered.
Today we’re going to talk about the cost of aircraft ownership based on my experience owing a Piper Warrior. I’ve had my share of expenses and one “investment, ” which I’ll share with you later on. This information is aimed mainly at new airplane owners or people who are considering buying an airplane.
It’s often said you need to fly 100 to 150 hours a year to justify the cost of owning an airplane. But for the most part, you buy an airplane for the freedom it gives you to go where you want to go, when you wanna go and also to equip it and maintain it up to your own personal standards.
The cost areas associated with owning a light general aviation airplane that you’re probably not exposed to as a renter are financing, insurance, maintenance, operating cost and of course, hangar or tied down.
Financing. Let’s start with personal aircraft financing. To finance your airplane, you probably need 20% down, that’s the common threshold. You can approach small banks and credit unions about an aircraft loan. Bank of America and AOPA have an aircraft loan relationship. Bank of America has its own aircraft lending unit. If you have home equity, you could consider a home equity loan to purchase the airplane which would allow you to deduct the home equity loan interest.
Also included in the aircraft financing are various government tax programs for new and used planes that enable you to accelerate the depreciation. That’s something you may want to investigate with your accountant.
Expect to pay anywhere from 0 per year and up depending on the airplane, your time in type and total hours.
Insurance. Next up is insurance which, like car insurance, protects the aircraft owner from financial loss caused by damage to the airplane or persons or property. The main factor with insurance is the time in type and total number of hours you have.
If your first airplane is a complex airplane, that is, one with a retractable landing gear and a constant speed prop, then you might have to fly with an instructor for a certain number of hours specified by the insurer before you can fly solo.
Insurance policies on small planes are generally what are called name-insured policies. That is a policy written on a certain airplane. Pilots are named to that policy. Obviously, you as the owner would be one of the names insured. If you have other people who are allowed to fly the plane, they would also be named on the airplane insurance policy.
There is also a provision for open pilots on these name-insured policies. Open pilot standards might be something like a pilot with 100 hours and 25 hours in type. In which case, the insurance company is going to assume that that pilot is qualified to fly the airplane and he will not have to add that person as a named insured.
Expect to pay anywhere from $600 a year and up for your [annual aircraft insurance] premium depending on the airplane, your time in type and your total hours. $1, 100 a year seems to be fairly typical of a Cessna 172 class airplane flown by a VFR pilot. That was what I was paying when I first bought my PA-28 Warrior. After I reached 350 hours total time (by which time I also had my instrument rating), my insurance premium went down to $600 a year. The instrument rating did not make a significant difference in the premium; it was the hours that mattered.
There is also the matter of hull insurance. This is something to speak with a broker about because. If you over-insure to cover the recent upgrades you will pay more and could be at risk of the insurance company “totaling” the airplane if their book value figure is less than the hull value. If there is a loan on the plane then the lender is your partner and it’s unlikely it will be under-insured.
Sources for airplane insurance include insurance brokers and aviation organizations such as AOPA, and the Experimental Aircraft Association. They don’t actually underwrite the insurance but they work with companies that do. You’ll find plenty of other resources from a search engine query for airplane insurance companies.
Hangar vs Tie-down. You’ve got the financing. You got the insurance. You picked up your airplane. Now it’s time to bring it home. In all likelihood, that’s going to mean hangar versus tied down. Hangar versus tie-down is not as easy as it sounds. It really all boils down to money.
Hangar versus tie-down is not as easy as it sounds. Location matters.
In Long Island, New York, for example, the difference between a hangar and a tied down can be $600 or $700 a month. Well, 12 times of 6 is 72. $7, 200 a year can cover the cost of a new paint job of a small airplane like a 172. You really have to evaluate the situation depending on where you live.
The other factor is how often the airplane is flown. You’d probably be hard pressed to find a flight school that hangars its airplanes every night regardless of what part of the country it’s located in. That’s because airplanes that are flown frequently stay healthier.
If you plan on flying your airplanes a few hours a week, then what you’re really looking at is routine maintenance for the internal systems and a paint job that’s going to deteriorate faster than if the airplane were hangared. On the other hand, if you’re not flying that frequently and you’re parking it outside to save money, again, depending on the situation in your area, that could come back to bite you in the form of maintenance surprises.