Hidden costs of buying/owning

bflynn

bflynn

Final Approach
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Brian Flynn
Loaded question, right? What are some of the hidden costs of buying or owning? Here's a list that I have, what am I missing?

Buying:
Price
inspection
travel
Taxes

Owning:
Storage - ramp fee or hangar
Loan payment, if any
insurance
annual, without any maintenance

Maintenance, allocated per hour
Engine reserve
Unexpected maintenance in excess of maintenance reserve
 
bflynn said:
Loaded question, right? What are some of the hidden costs of buying or owning? Here's a list that I have, what am I missing?

Buying:
Price
inspection
travel
Taxes

Owning:
Storage - ramp fee or hangar
Loan payment, if any
insurance
annual, without any maintenance

Maintenance, allocated per hour
Engine reserve
Unexpected maintenance in excess of maintenance reserve
Click to expand...
Not sure what you mean by "hidden". Can you please explain?

To recurring expenses I would add:
Property taxes (if your region assesses it)
Database subscriptions if you are flying IFR /G (or SYGBR PBN/B2 in ICAO-speak)
 
How about fractional ownership? Cheaper splitting the costs 2-3 ways and less expensive than renting?
 
The only real hidden cost of ownership that comes to ind is dealing with a previously unsuspected/unplanned major repair, or massive expensive AD out of the blue. A rental with those issues you just walk away a from.
 
Didn't see Fuel costs, brakes and tires.

And unexpected what nots that you are going to spend money on. You some how talk yourself into justifying you HAVE to upgreade to a G5, and then while you're there get a second one, and then......

You do have 2 costs that I don't see mentioned.

1) Lost of return on invested capital (OK, right now doesn't see to be an issue, but when the country is back it will be). That is, if you spent $75,000 to buy a plane and you figure you "normally" average 9-10% return on investment, add $7,500 the first year. Back out what you think the airplane might appreciate. How much that is? Who knows.

2) The "Who Knows" or Risk should be seen as a cost. The plane might not need any work. Might require a new engine unexpectedly. Who knows. That risk has a monetary value. You are exposed to unexpected costly expenses.

A way around the risk? Share it, which is what a club or renting is all about.
 
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Property tax or registration fees if you state requires it.
Don't forget gas. That is a large part of your operating expenses, and is easy to not think about until the bill comes.
 
Unplanned maintenance cost, would be what I might consider a hidden cost.
 
You pay for the gas you burn whether you own, rent, or share, so it's not a hidden cost of buying/owning.
 
Hidden from whom? I read enough quips about hiding plane costs from wives, it makes me think that's a real thing that happens. o_O

I am wrapping the first annual to me on my plane, which by definition makes it a heavy annual. Covid willing, I'll fetch the thing next week. What is hidden from me is what that final bill will be. I'm not sure I could guess within 5 grand right now. Hopefully no boat payments are due when I arrive with checkbook in hand.
 
Op was listing costs and asking what he was missing or hidden. He didn’t list fuel.

I suppose nothing is “hidden” as much as “what am I missing”.
 
Leather jacket
Sun Glasses
Flight suit
Ball caps with logo

But seriously...cowl plugs (I made mine), pitot tube cover (I'm on my third), wheel chocks, grounding strap (even inside a hangar), tie downs for travel, tools like wire pliers, spark plug socket, lots of rags...
 
Sales tax (a.k.a. use tax) was not something I had taken into account. Rules/exemptions and percentage differ from state to state. Even after 8 years of ownership, writing that check hurt more than any other expense I've had from owning and flying my Bonanza.

- Martin
 
The most neglected costs for owners...that is, costs that are not immediately obvious and regularly recurring like fuel, insurance, storage, annuals, etc...are engine reserve, avionics upgrades, and major unplanned maintenance (e.g. fuel tank leaks, newly issued ADs that require expensive compliance).
 
Depending on the state - any yearly property taxes?

And the unpredictable increase in tie down or hanger costs
 
Time. It’s stolen from everything else and showered on the stupid plane. If you don’t watch it, it’ll take over everything.
 
When the mechanic dies with the deposit from the insurance company and you have to hire a lawyer to get things resolved.(Note: Still not resolved)
 
Thanks everyone - yeah, I didn't list fuel as an operating cost, but I certainly have it as the largest component of my operating cost spreadsheet.

Recurring property taxes is something I missed. Do I register where I live or where the airplane is based?
 
bflynn said:
Thanks everyone - yeah, I didn't list fuel as an operating cost, but I certainly have it as the largest component of my operating cost spreadsheet.

Recurring property taxes is something I missed. Do I register where I live or where the airplane is based?
Click to expand...

thats between you and your tax lawyer....................
 
bflynn said:
Recurring property taxes is something I missed. Do I register where I live or where the airplane is based?
Click to expand...

Depending on your state or county, it might not matter what your registration says. Some counties will get the airport records of the tail numbers that are listed for the tie downs or hangars. The county will send you a bill if you are on the list. I got a bill from Los Angeles county for 2 years of taxes after I left the state. The airport records still showed that my plane was listed in a shared hangar. Even though my registration had been changed to another state, I still had to pay the taxes in LA & my plane never entered CA airspace in those 2 years.
 
Not every state has property or sales/use tax on aircraft. NY abolished sales/use tax on aircraft a few years ago. Unfortunately when I bought, I had to pay 8% use tax. Ouch. If you were a scofflaw, they caught up to you in about 2 years using FAA records. A colleague lost his plane to taxes, interest and penalties when he ignored 3 requests to pay up. It was a nice Beech A23/24 that I would have bought from him had I known it was for sale.

Applicable taxes should not be a hidden cost unless you are not doing your homework when buying.
 
bflynn said:
Thanks everyone - yeah, I didn't list fuel as an operating cost, but I certainly have it as the largest component of my operating cost spreadsheet.

Recurring property taxes is something I missed. Do I register where I live or where the airplane is based?
Click to expand...

Be very careful about this one. I live in ND, a couple of weeks back found a hangar over the state line at 1/3 the cost and was about to move. Reached out to the state aeronautics dept and then found the revenue guy there who confirmed I would need to pay use tax in MN as well minus whatever I had paid to ND, and there is some county tax on top of it. Would have costed me $1600 just to keep my plane in a diff state.
 
I think “hidden” is not really the right word, you’re looking for the costs that are easily forgotten/overlooked when contemplating ownership, right?

I think the peanut gallery has given you some good ones - sales/use/registration taxes and fees are a big one. I remember California deducted $1200 from me every year for the privilege of owning a plane as a “luxury” tax. Barf. Now it’s $99 a year in my current state (not bad, but easily overlooked).

Database fees is a big one, same for ForeFlight/Garmin Pilot subscription fees, if you’re into that kind of thing.

The process of buying is full of wasted money. If you need to fly commercially to inspect the plane, you always end up buying last minute because you want to make sure the weather is good enough to test fly, which mean you buy the ultra-premium ticket price. If you have to cancel, you get to pay the cancellation and rebook price, too. Hotels, prebuy inspections which aren’t worth the paper they’re written on (in that they have no legal effect, as does an annual), etc. And then there’s sales tax! And maybe you don’t want to fly back there to pick it up and bring it home (commercial ticket $$, gas $$, hotel $$), so you decide to have it ferried ($$)! I could go on... the buying process is a pain.

And we haven’t even talked about all the upgrades that you swear you’re never going to do...
 
Avionics failures hasn’t been mentioned. Gyros fail, etc. People always plan for the engine, but rarely a panel failure. Some just use it as an upgrade excuse. Can get spendy either way. :)
 
The only hidden expenses are the ones you're unwilling to see.
 
Don't forget that you also need to clean it, heat it and move it...

So cleaning supplies, propane if you buy your own heater, tug(s), ladder(s), and cover repairs (they rip, ya know?)
 
schmookeeg said:
Hidden from whom? I read enough quips about hiding plane costs from wives, it makes me think that's a real thing that happens. o_O

I am wrapping the first annual to me on my plane, which by definition makes it a heavy annual. Covid willing, I'll fetch the thing next week. What is hidden from me is what that final bill will be. I'm not sure I could guess within 5 grand right now. Hopefully no boat payments are due when I arrive with checkbook in hand.
Click to expand...
Our guys kept us up to date as to the cost when something unexpected popped up ("your mags have an AD on them" and "your carburetor has an AD on it" and "your gascolator has an AD on it" come to mind.)
So we got a running total, so to speak. And so should you.
 
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