First Year Cost of Ownership: C182

[JoseCuervo]

Oh I agree that thinking things over frequently turns into over thinking things but I do not see that in the comments on this thread. It is more just a difference of opinion on how to figure your actual costs and how to ensure funds are available for major repairs.

Best way to ensure funds are available for future repairs is to go to college, get a good job, work hard, earn lots of money. Or, inherit it.

If I was up to my eyeballs in debt, and over extended myself on buying the plane, then I might worry about reserves and show you some sort of imaginary accounting for an imaginary coffee can.

But, even then, the imaginary accounting would be of no value to anyone with different financial circumstances.

And, one could make the argument that my "reserve" was negotiated up front when I discounted the purchase price compared to a new, zero time motor/plane.

 

[JoseCuervo]

Wrong approach to buying, you only spend half of your budget for any aircraft. hold the rest in reserve you know you'll need it.

That way no matter what happens day 1 you are ready.

I am not sure "half your budget" works across the spectrum of planes purchased.

An old tri-pacer vs. a Cirrus would seem to be different propositions.

These motors, on older used planes, definitely contribute the most to the unknown and potential expenses. As long as you are comfortable writing the check for the overhaul, that is about all the budgeting I would do.

 

[JoseCuervo]

So if you bought that 172 for 25k, you would presume there was 25k worth of things wrong with it

That would kill the used aircraft market.
I assume worse case on a 172 would be the additional $25k, but that would only be a ~5-10% probability, with higher probabilities assigned to lower amounts.

 

[rbridges]

Why do you need a Mooney Service Center for an annual? Wouldn't a competent, independent mechanic be able to work on a Mooney?

In theory, yes, but there are some little quirky things associated with mooneys that the average IA won't be as proficient addressing. I'm not saying that there aren't IAs that are fully competent to work on mooneys, and I'm definitely not saying an MSC is guaranteed quality work.

 

[Theboys]

I've never figured cost per hour. Figured it would be too scary. Just buy gas and pay the bill. When they need something I fix it. If I broke it all down I might realize it's kind of expensive. Did price a new engine for my traveling plane just for grins. Mine only has 200+ hours now. 72000$ now that was kinda scary.

 

[Fearless Tower]

Where do you live? Where do you keep your plane?

A tiedown at my closest airport starts at $80.00 a month, hangers start at $350.00 a month. I pay $5.50 a gallon for 100LL.

I have to get out of this hellhole of a state.

Not much better here.

That's about what I'm paying in VA.

 

[Fearless Tower]

Frankly I don't care if they have Jesus himself taking inspection covers off, 3k with no snags is a HUUUGE rip.

No kidding. A Fixed Gear single like a 182 should be well under $1500k for the inspection regardless of location.

 

[ifly4fun]

Not much better here.

That's about what I'm paying in VA.

PVG?

SFQ is a little better.. $30/tie down, $225/hanger. $4.30/100LL $3.30/mogas

 

[James331]

No kidding. A Fixed Gear single like a 182 should be well under $1500k for the inspection regardless of location.

My 300HP amphibian is well under 1500 for the grease the bearings, etc inspection. And that plane is a bit of a pain to work on due to having to climb up it to get to anything, that also with a 185 guru.

I pay cash and do owner assist, last annual was well under 1k with a ELT battery, oil change and the normal greasing and inspecting.

 

[Fearless Tower]

PVG?

SFQ is a little better.. $30/tie down, $225/hanger. $4.30/100LL $3.30/mogas

I keep the Waco at CPK. It's $310/month there. Hangars at PVG start at $450. ORF is $400.

Otutdoor tiedowns at around$75/month and all the fuel in the area seems to hover around $5.50/gallon

Looks like you are correct on SFQ - when did it drop? They had been keeping roughly on par with the other airports in the area last I checked. I might have to start filling the Baron up there!

I don't think I'd want to keep a plane at SFQ - a bit far of a drive for me (I'm only 10 min away from ORF and it takes me 35 min to get to PVG or CPK).

Do you keep at plane at SFQ, or rent?

 

[rocketflyer84]

That is why I only reported the OPERATING costs. We can play imaginary games for days to determine what the imaginary reserve accounts

Um..... Those future costs are real costs and the reserve amounts ARE operating costs! An appropriate reserve for capital expense is an important part of any operating budget. If you haven't budgeted for it in your operating budget I assure you that money won't feel so "imaginary" when you write the cheque.

 

[cgrab]

Jose

Great job of accounting and explaining your rationale. As you get to know your plane you can probably start doing owner assisted annuals and bring the cost down. One thing on hangar costs...I had the option to tie down or be in a hangar and my wife baulked at the cost of the hangar until I explained that one big hail storm can ruin an airplane. So I consider my hangar cost as part of my insurance.

 

[JoseCuervo]

Um..... Those future costs are real costs and the reserve amounts ARE operating costs! An appropriate reserve for capital expense is an important part of any operating budget. If you haven't budgeted for it in your operating budget I assure you that money won't feel so "imaginary" when you write the cheque.

Do you think they are more real or less real than the actual tax benefit already pocketed this year?

What number would you put in there, and what would your math look like?


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[VWGhiaBob]

Am I the only one who pays a usage tax of 1.25% on the value of my plane, just over $2K per year?

Agree with comments above...incremental operating costs provide an unrealistically low estimate. Lots to add to the numbers from the OP if you consider the very real "big" costs that show up when you least expect them.

But here's a vote against thinking about an hourly rate as the sole basis anyway. For me, there's great addtional value in the hours I spend at the hangar, the friends I make because I own, not to mention the value of being able to fly where I want, when I want.

In So. Cal., when all costs are in, including engine / prop reserves, a 10 year old SR22 in a nice hangar comes in around $450 - 500 / hour at 150 - 200 hours per year.

 

[oldShar]

Where do you live? Where do you keep your plane?

A tiedown at my closest airport starts at $80.00 a month, hangers start at $350.00 a month. I pay $5.50 a gallon for 100LL.

I have to get out of this hellhole of a state.

THIS sounds like what I'm used to.
I second the question: Where do you get things so cheap?

 

[EdFred]

Am I the only one who pays a usage tax of 1.25% on the value of my plane, just over $2K per year?

I'm sure others in CA do as well. In MI it's a one time 6% tax upon purchase. Of course there are ways to reduce that - or at least what the price of the plane appeared to be purchased for.

 

[rbridges]

Am I the only one who pays a usage tax of 1.25% on the value of my plane, just over $2K per year?

Georgia residents pay property tax on planes. It's funny b/c they send you the form and have you tell them what it's worth.

 

[JoseCuervo]

Am I the only one who pays a usage tax of 1.25% on the value of my plane, just over $2K per year?



Agree with comments above...incremental operating costs provide an unrealistically low estimate. Lots to add to the numbers from the OP if you consider the very real "big" costs that show up when you least expect them.



But here's a vote against thinking about an hourly rate as the sole basis anyway. For me, there's great addtional value in the hours I spend at the hangar, the friends I make because I own, not to mention the value of being able to fly where I want, when I want.



In So. Cal., when all costs are in, including engine / prop reserves, a 10 year old SR22 in a nice hangar comes in around $450 - 500 / hour at 150 - 200 hours per year.

And we all know, if you change the hours flown per year, the hourly rate changes in relation.


In my state, I had to pay the sales tax on purchase, and then have the low annual registration fee.

It would be interesting to see a newer cirrus compare on the same metrics as the older 182.


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[JoseCuervo]

Jose

Great job of accounting and explaining your rationale. As you get to know your plane you can probably start doing owner assisted annuals and bring the cost down. One thing on hangar costs...I had the option to tie down or be in a hangar and my wife baulked at the cost of the hangar until I explained that one big hail storm can ruin an airplane. So I consider my hangar cost as part of my insurance.

Owner assisted annuals are interesting subject.

From a purely economic point of view, my time is well better spent at my day job where I get compensated more than I would from the savings of doing the annual.

Hopefully, I earn more in the two days that my day job then I would save spending two days down at the mechanics hanger.

(there is a value to knowing the inside and out of the airplane, I will grant that. Just not a number I can put a dollar per hour to. )


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[Scott@KTYR]

JoseCuervo, Thanks for the post. Good info.

 

[rocketflyer84]

Do you think they are more real or less real than the actual tax benefit already pocketed this year?

What number would you put in there, and what would your math look like?


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The wrong number is $0. The right number depends on the type, age and maintenance history of your airplane plus personal preference for what and when you fix things (e.g., do you fix everything or just the things that impact flight safety). It also depends on how hard you use the airplane. Some items have wear and tear over time regardless of how hard the plane is used... other things are more closely linked to hours flown.

At the end of the day it's an educated guesstimate, but there should at least be a reasonable budget in place. Cost of ownership / operating cost per hour should factor that cost in if you want a true picture of the actual cost to own and fly the airplane. For most airplanes this figure is probably somewhere in range of $10-30 per hour flown added to the costs you accounted for, but your mileage may vary.

So if you're saying it's costing you $84 an hour for the plane over several years if you keep flying the same amount your actual operating costs will probably work out to be something closer to $110 an hour give or take (again a your mileage may vary).

Still a nice original post original though. Thanks for sharing.

 

[rocketflyer84]

^^ And not to get too technical but this issue basically comes down to the concept of capital expense and deprecation as discussed under generally accepted accounting principals.

In a nutshell, if you build a building for $1 million and then use if for 30 years your operating cost for the building isn't $1 million in year 1 and $0 in years 2-30 (which is sort of what you were trying to do with your math. Rather from a cost accounting standpoint it would be something closer to $33k a year for 30 years... even though you technically paid all the cash out only in 1 year.

Just like if you replace the engine and then use it for 15 years you need to factor the cost of the engine into your running costs for the next 15 years if you want a true picture of operating costs.

 

[EdFred]

And if you never replace the engine? That's why I don't look at the "this might happen sometime down the road, so I need to pull a random number out of my ass to add per hour, for some mystery problem that may or may not happen" cost per hour as a cost. When it comes up, it's a cost, and you rate it in arrears.

If the engine pukes in 200 hours like my dad's did (on a 25SMOH engine) that whopping $10/hr in engine reserve is absolutely useless.

 

[rocketflyer84]

And if you never replace the engine? That's why I don't look at the "this might happen sometime down the road, so I need to pull a random number out of my ass to add per hour, for some mystery problem that may or may not happen" cost per hour as a cost. When it comes up, it's a cost, and you rate it in arrears.

Correct... nobody said it's an exact science. That's why it's a 'budget.'

But if your per hour capital expense budget is $0 when calculating your per hour operating expenses then you're either in for a big surprise down the road or flying an airplane that I wouldn't want to fly in!

 

[EdFred]

Correct... nobody said it's an exact science. That's why it's a 'budget.'

But if your per hour capital expense budget is $0 when calculating your per hour operating expenses then you're either in for a big surprise down the road or flying an airplane that I wouldn't want to fly in!

My per hour capital expense budget is $0.

I have 50% of the plane's value socked away ready for use. I may use it, I may not. That's why my hourly budget is $0. When I use part of it, that gets figured out after the fact. Maybe it only cost me $3/hr based on what I spent when I go to sell, and not the $20/hr people 'demand' I am to figure in ahead of time.

 

[JoseCuervo]

^^ And not to get too technical but this issue basically comes down to the concept of capital expense and deprecation as discussed under generally accepted accounting principals.

In a nutshell, if you build a building for $1 million and then use if for 30 years your operating cost for the building isn't $1 million in year 1 and $0 in years 2-30 (which is sort of what you were trying to do with your math. Rather from a cost accounting standpoint it would be something closer to $33k a year for 30 years... even though you technically paid all the cash out only in 1 year.

Just like if you replace the engine and then use it for 15 years you need to factor the cost of the engine into your running costs for the next 15 years if you want a true picture of operating costs.

And, if I expensed the entire purchase it as a Sec 179 in the first year, how does your math look?

And, if I got a great deal on the plane, would you "mark to market" and have me declare the appreciation as an income item?

We can all play whatever accounting games we want, and, if there are POA-GAAP accounting rules, please provide a link....

But, to "reserve" an imaginary number in a coffee can in my back yard and then share MY imaginary number with other people makes no sense. I buy real estate, buildings, trucks, tools and tooling, equipment, houses, toys, etc, and I don't go around digging holes all over my back yard for coffee cans.

What is the worse case that I could have? My engine needs replacement tomorrow?

What if I choose not to replace the motor, and just sell a "needs overhaul 182" that is in otherwise airworthy shape, with a 430w and 3000 hours on the frame?
Is that worth $10k? $20k? $30k? $40k? Another number? What number would you pick?

 

[JoseCuervo]

The wrong number is $0. The right number depends on the type, age and maintenance history of your airplane plus personal preference for what and when you fix things (e.g., do you fix everything or just the things that impact flight safety). It also depends on how hard you use the airplane. Some items have wear and tear over time regardless of how hard the plane is used... other things are more closely linked to hours flown.

And, at the end of Year 2, I will look back at my expenses and see what it cost me to operate it the second year.

At the end of the day it's an educated guesstimate, but there should at least be a reasonable budget in place. Cost of ownership / operating cost per hour should factor that cost in if you want a true picture of the actual cost to own and fly the airplane. For most airplanes this figure is probably somewhere in range of $10-30 per hour flown added to the costs you accounted for, but your mileage may vary.

I wanted a picture of the cost to operate the plane in Year 1, and I collected it, and, then shared it with the rest of the class. This was not an "ownership" exercise, as that number is unique to the purchaser. But, since I have a fairly common, generic airplane that everybody can identify with, I thought I would share the actual operating expenses. (Hell, if we wanted, we could argue that the July 2015 annual should not be in Year 1, but should be the first expense in Year 2.)

So if you're saying it's costing you $84 an hour for the plane over several years if you keep flying the same amount your actual operating costs will probably work out to be something closer to $110 an hour give or take (again a your mileage may vary).

At no point in this thread did I EVER say it would cost $84 in future years. I only showed the numbers, assumptions, and math for LAST year. Next year will likely be dependent upon the number of hours I fly, the price of gasoline thru the year, and other items to a lesser degree.

Still a nice original post original though. Thanks for sharing.

Thanks, always good to see actual numbers on real subjects.

 

[JoseCuervo]

And if you never replace the engine? That's why I don't look at the "this might happen sometime down the road, so I need to pull a random number out of my ass to add per hour, for some mystery problem that may or may not happen" cost per hour as a cost. When it comes up, it's a cost, and you rate it in arrears.

If the engine pukes in 200 hours like my dad's did (on a 25SMOH engine) that whopping $10/hr in engine reserve is absolutely useless.

When the time comes, I will have options:

1. Replace cylinders and keep flying
2. Sell the plane with run-out engine
3. Overhaul/reman/New o-470R
4. Pponk the damn thing

The decision I make will likely depend on what year the event happens, and, what I am interested in at the time (along with Avgas costs at the time). All of the above are viable options, each with a different economic decision.

 

[denverpilot]

As this was the first annual with "my mechanic", I wasn't sure what to expect. I mostly was advised the first year that I should spend money on AvGas and get plenty of hours on it so we know what we got, and build some history.

I have a list of things I want to do with the plane and stuff that will need to be done:

New paint
Oversized front fork
New motor ( in 500 hours, +\- 499 hours)
New Transponder
Replace all the cowl fasteners with stainless steel
Ads-B
New windshield
Engine Analyzer
Vortex generators, maybe

And, I am guessing once I start upgrading, we will find additional things to replace. ( replace the front windshield and not make the rest of the windows look new???)

Or, do none of the above, and just enjoy flying a solid, plain vanilla 182.

Paint: Doesn't make it fly. Might be worth it for corrosion or what not. Optional.
Fork: Watch out for damaging stuff up there. Cessna has upped the price of landing gear bits to astronomical levels.
Engine: It'll tell you when it's ready to go, usually. Unless you get chicken before that day.
Transponder: No point in replacing until the ADS-B crap shakes out.
Fasteners: Cosmetic but fine if you like such things. Optional.
ADS-B: See transponder. And add a display or a GPS with a big enough one, etc. it's pretty much a panel redesign after a few questions are known.
Windshield: Spendy but if yours is cracked and hazed, safety issue. It goes above some of the others for that reason. Depending on condition. VG's: I could put you in touch with someone who did them at paint job time and see if he thinks they bought him anything. I think I'd pocket the cash, the stock 182 airfoil doesn't handle poorly at low speeds.

Just thoughts for you to ponder.

 

[JCranford]

What is the worse case that I could have? My engine needs replacement tomorrow?

Well, yes that would be worst case (maintenance wise anyway). You seem to get all bent out of shape every time someone suggests you need to budget for an engine at some future point. Maybe youre independently wealthy and can just write a check for a new engine. Great, but it still is a future operating cost. Sooner or later you will have a large spike in your yearly operating cost when you overhaul / replace the engine that will skew your yearly average.

Very good original information tho, since I'll likely be in that boat in the future

 

[denverpilot]

And others are "bent out of shape" that he didn't say how he's going to handle the eventual engine replacement, but his original post wasn't about that.

I stick by my statement that it'll work out to be about the cost of a rental in the end. There will be big bumps in the graph but over time, but rental prices of good clubs or FBOs that do decent MX, fairly accurately predict ownership ones when looked at in macro.

Micro, there are some rentals operating below cost. They won't be on the line in a few years because the owner won't be able to fix them, so the dollar average fixes itself over time.

If it's $85 an hour this year, it'll have to be much higher per hour in another year to meet up with the roughly $125/hr most older Skylanes bring as rentals. (Around here anyway... YMMV.) That's just how it works.

Jose showed the typical ops numbers for a 182 without major MX. If you were lucky enough to buy one and never break it, never upgrade it, and then sell it, they're realistic numbers. If you own for longer, that hourly will be higher.

No big deal... You already know what the rentals go for. So you'll know your under/over.

 

[JoseCuervo]

Well, yes that would be worst case (maintenance wise anyway). You seem to get all bent out of shape every time someone suggests you need to budget for an engine at some future point. Maybe youre independently wealthy and can just write a check for a new engine. Great, but it still is a future operating cost. Sooner or later you will have a large spike in your yearly operating cost when you overhaul / replace the engine that will skew your yearly average.

Very good original information tho, since I'll likely be in that boat in the future

Not "bent out of shape". Just not the way I do math or manage my assets. That is why I don't see the value to the number.

I have asked for others to provide a number with the related math, so other viewers of the thread could see what works for them.


(As a second aside, there is a strange phenomenon at POA for people to try and discourage airplane ownership. When I first started looking for a 182, I posted a thread and stated what my budget for purchase was. I was then told I couldn't afford to buy a plane as my budget didn't include a bunch of imaginary non-purchase items.

This made no sense to me, as for the purchase, I drew an arbitrary line on what my "toy/tool" budget was for a plane and was comfortable spending that. And, if the value drops to $0 tomorrow, I would not lose sleep or end up in a soup line.

I guess, as we buy planes, we should all look at 3 budgets.

1. Purchase/acquisition Budget
2. Annual and hourly budget
3. Reserves and "Imaginary" Coffee Cans

The first one was solely dependent upon myself, and what I wanted to spend compared to a Toy or a Tractor, or a Trip to Europe. It really shouldn't influence other people's decisions on their case.

The second one is the one I captured in the OP, and can certainly be compared to other people's experience for operating each year.

The third one depends on random luck, risk tolerances, and global events that are outside of much of our control. With quite a bit of influence from the original Purchase Budget. But, it is completely unique to each person and plane combination.)

 

[denverpilot]

I don't think there's any " luck, risk tolerances, and global events" affecting the inevitable wear of metal components inside your engine, Jose. The industry has put a hour number on it, which isn't always accurate, but it's happening all the time that the engine is operating.

Same thing with simpler stuff like aileron hinges moving and flap tracks and rollers doing their thing. Every movement takes an unknown amount of lifespan off of the metal components. It's not really. "luck" or "global events" that mandate how friction works. Haha.

Whether you budget and account for component wear parts replacement on an hourly basis or a one time event, is just accounting semantics, though. I agree with you there.

All wear components will break eventually and be part of the big picture of either #2 or #3, and it won't be luck or global events that will be the cause. Just good old friction and time.

 

[bflynn]

Um..... Those future costs are real costs and the reserve amounts ARE operating costs! An appropriate reserve for capital expense is an important part of any operating budget. If you haven't budgeted for it in your operating budget I assure you that money won't feel so "imaginary" when you write the cheque.

You know, they don't have to be.

One strategy is to buy an airplane, almost wear out the engine, then try to sell it to the next sucker owner who puts the new engine in it. You take a loss on the sale, but with some good negotiation, you can get the next owner to pay for some or even most of the cost of your used up engine. Pass the buck, Caveat Emptor.

That's not the way I do things - I definitely include maintenance as an hourly cost paid to me. My formula is - ($$ needed for overhaul) / (hours until TBO). Then I double that to cover non-engine maintenance too.

 

[James331]

Am I the only one who pays a usage tax of 1.25% on the value of my plane, just over $2K per year?

Agree with comments above...incremental operating costs provide an unrealistically low estimate. Lots to add to the numbers from the OP if you consider the very real "big" costs that show up when you least expect them.

But here's a vote against thinking about an hourly rate as the sole basis anyway. For me, there's great addtional value in the hours I spend at the hangar, the friends I make because I own, not to mention the value of being able to fly where I want, when I want.

In So. Cal., when all costs are in, including engine / prop reserves, a 10 year old SR22 in a nice hangar comes in around $450 - 500 / hour at 150 - 200 hours per year.

My plane isn't registered in any state that has those issues.

As far as paint and SS fasteners go, if you ever go to sell your plane paint and little cheap pretty mods have a good ROI, especially if you understand how to get them done well and without paying a "dumb rich guys doesn't know better" premium.

The owner assist annuals are mandatory IMO for ownership, it doesn't take long to annual a plane, I do it over a couple days off, it's really part of ownership, much like the guys who don't ferry their own plane home, or are present for the prebuy, if you don't have a little time for these things you're just a renter who happens to own a plane.

 

[SoonerAviator]

This is great information on the actual operating costs of the 182 in a given year. All of the people clamoring about maintenance/engine reserves are talking about a budgeted operating cost per hour. There are a ton of variables in that, so it's pointless to talk about except in generalities. If someone wants to say they budget $15/hr for the reserve, great, but it's not an actual expense until it's incurred.

If you buy the aircraft with 900hrs on the engine, fly it for 300hrs and sell it with no engine O/H needed, the $15/hr you "budgeted/saved" never gets consumed aside from in the sales price of the aircraft (assuming it was accounted for in the sales price). It's not a bad thing to budget in a reserve on a per hour basis, however, with the unpredictability of an engine overhaul at all hours less than TBO (not getting into flying past TBO), it's always a shot in the dark at an accurate rate.

 

[N747JB]

No kidding. A Fixed Gear single like a 182 should be well under $1500k for the inspection regardless of location.

I just picked mine up yesterday, $1620 for labor, a few minor squawks and a new battery the total was $2300.00 That's pretty much what it's been for the 5 years I've owned it. It's a good shop, the owner will pick up and deliver if I need him to. I dropped off the Conquest yesterday to fix a couple things before we fly to Colorado Springs next weekend.

 

[Fearless Tower]

I just picked mine up yesterday, $1620 for labor, a few minor squawks and a new battery the total was $2300.00 That's pretty much what it's been for the 5 years I've owned it. It's a good shop, the owner will pick up and deliver if I need him to. I dropped off the Conquest yesterday to fix a couple things before we fly to Colorado Springs next weekend.

Well, I wouldn't quibble over a hundred bucks. My point was that $3k for a 182 is seriously excessive for the basic inspection.

 

[N747JB]

Well, I wouldn't quibble over a hundred bucks. My point was that $3k for a 182 is seriously excessive for the basic inspection.

I agree, I think $12-1500 is a good range for a good shop. Some shops just charge too much and wonder why they aren't busy!

 

[Tom-D]

I agree, I think $12-1500 is a good range for a good shop. Some shops just charge too much and wonder why they aren't busy!

What do you think of any A&P-IA that will inspect your aircraft, allow you to service the aircraft, and hand you a list of discrepancies for $350.00 and sign the log as annual completed? Airworthy/un-airworthy is dependent upon aircraft condition.