Selling an airplane

You have to buy it right and it can't have any hickeys like damage history, missing logs, etc. all of those issues will limit your buyer pool. Also, buy it right so there is wiggle room and you can make a deal on it.
 
drgwentzel said:
Figure a typical 172 costs $156.00 per hour to rent and than you will fly it 100 hours per year, it will cost you: $1,300.00 per month to rent and to own the same plane it will cost you about: $1,983.78 per month flying it the same 100 hours.
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Some small omissions:

The money towards owning the plane means you have something to sell in the end. The 1,300 is just money out the window.

Same could be said for the hanger space, if your buying it and not renting it. There is a very nice hanger around here going for 40K to buy.

If I want shared hanger space at a very close airport, it's $90 a month.

Your figures did not account for renting an aircraft, and keeping it overnight somewhere else (like if you want to go away for a weekend). Often times that cost extra.

When you rent and go anywhere where you need gas, you have to pay the rate where you get it, but you will only get reimbursed at the rate the people your renting it from pay (at least where I am at), so add that in.

We are in very much a buyers market, and people stopped making planes. There is a good chance that a nice used aircraft will be worth more in 5 years then it's worth today.

Lastly, and this is just a guess, there might be some tax deductions on owning a plane, that you don't get from renting (I have no clue really about this one)

All these things bring those two number closer together.
 
A few small corrections:
Mafoo said:
Some small omissions:

The money towards owning the plane means you have something to sell in the end. The 1,300 is just money out the window.
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But it doesn't mean what you have to sell is worth anything, it just means you made the payments. Nor can you just cut your losses and walk away when you want.

Same could be said for the hanger space, if your buying it and not renting it. There is a very nice hanger around here going for 40K to buy.
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Probably a smarter buy than the airplane. At least you can use it to store your ugly boat.

overnight somewhere else (like if you want to go away for a weekend). Often times that cost extra.
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Chump change.
When you rent and go anywhere where you need gas, you have to pay the rate where you get it, but you will only get reimbursed at the rate the people your renting it from pay (at least where I am at), so add that in.
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Chump change.
We are in very much a buyers market, and people stopped making planes. There is a good chance that a nice used aircraft will be worth more in 5 years then it's worth today.
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Slightly less chance than when pigs fly. Where will the buyers come from?


Lastly, and this is just a guess, there might be some tax deductions on owning a plane, that you don't get from renting (I have no clue really about this one)
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Nope
All these things bring those two number closer together.
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No they don't, but you're free to fantasize that they do.
 
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wabower said:
A few small corrections:

No they don't, but you're free to fantasize that they do.
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So you're saying that most likely after paying the $530 a month for 15 years, your plane is going to be worth $0? Really? Your saying that?

Overnights: per the rental agreement I have at my Airport, cost more for one night a month, then insurance. I guess Insurance is just chump change.

My FBO pays 5.00 in gas. Some locations are well above $6.00. It's only chump change, if you don't go far.

The cost of airplanes is based on the economy. If you think we are not at the bottom, then prices will go down. If you think we will be in a better place in 5 years then we are now, the prices will go up.

And my ugly boat sits outside and cost me nothing in storage. Why I bought an ugly one.

I am not saying renting is not cheaper then buying if you plan to fly less then 2 hours a week (100 a year), but the numbers he quoted were a little biased.
 
Thanks for the info!
drgwentzel said:
Here you go:

Buy a 60K 172 with midtime engine and finance it at 6.25% for 15 Years: payment $530.95.

Put it in a hanger at $400.00 per month (you could tie it down at 70.00 per month, but then you can increase maintenance and shorten the time to re-paint it and most importantly, when you go to re-sell it...you can NOT say "Always Hangared" which reduces re-sale value. Plus, these things LEAK!! Then they smell!!!

Insure it for about 1,100.00 per year or 92.00 per month

Annual it at 1,200.00 (inspecition ONLY) is 100.00 per month

THESE ARE YOUR FIXED COSTS BEFORE YOU EVER GET OFF THE GROUND! $1,122.95 / Month

Figure 8.5 GPH burn @ 5.80/gallon or $49.30 per hour for fuel

Amortize 2000 hour engine already at 1000 hours, at $24,000.00 for rebuild, shipping, removal, and re-install in 1000 hours remaining is 24.00 dollars per hour (this is conservative!)

Figure $30.00 per hour maintenance amortization (and TRUST ME THIS is conservative. It's more like 45.00 dollars per hour. I have the stats to prove it.)

Therefore, it will cost you $103.30 per hour to fly your own plane and remain even.

Figure a typical 172 costs $156.00 per hour to rent and than you will fly it 100 hours per year, it will cost you: $1,300.00 per month to rent and to own the same plane it will cost you about: $1,983.78 per month flying it the same 100 hours.

Every hour you put on the airframe and engine will reduce it's value by about 28.00 dollars or so.

Just some conservative numbers from an aircraft owner for over 10 years.

Gene
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bartmc said:
I went and personally looked at a DOG that's on the front page of barnstormers right now. If they give it to the next owner, he's getting screwed. Whoever buys it is going to get taken to the wood shed, they have an IA willing to lie through his teeth and fracture every reg he needs to in order to sell it . Has nice interior though, too bad it needs a new engine.
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What makes you think it needs a new engine? Just trying to learn what I should look out for.

BTW, do you have a link to the add? I'm not sure which plane you are talking about.
 
There is no sense in owning planes you can rent. It's the ones you can't rent that you have to buy and put together.
 
So you're saying you're absolutely sure and certain that you'll want to own this pup for 15 years and that you're going to want to keep paying for it come hell or high water, with the knowledge that any money you might want (or need) to spend on it is out the window the day you write the check? Or that your needs will be exactly the same as now, and there will never be a time when you might want to trade and find it unfeasible due to being so far upside-side-down in your cream-puff? Are you really saying that?

Mafoo said:
So you're saying that most likely after paying the $530 a month for 15 years, your plane is going to be worth $0? Really? Your saying that?

Overnights: per the rental agreement I have at my Airport, cost more for one night a month, then insurance. I guess Insurance is just chump change.
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So you're saying you plan to stick with that sorryass deal for the next 15 years without looking at all the other alternatives that are available and will only increase as pilots use them less and less?

My FBO pays 5.00 in gas. Some locations are well above $6.00. It's only chump change, if you don't go far.
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And some may be cheaper. If you're slicing it this fine, you might want to consider another leisure-time activity.

The cost of airplanes is based on the economy. If you think we are not at the bottom, then prices will go down. If you think we will be in a better place in 5 years then we are now, the prices will go up.
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And my ugly boat sits outside and cost me nothing in storage. Why I bought an ugly one.
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That's why you should buy the hangar and save the world from looking at that eyesore. You owe it to us, man.

I am not saying renting is not cheaper then buying if you plan to fly less then 2 hours a week (100 a year), but the numbers he quoted were a little biased.
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All airplane numbers are a little biased, but since they're all based on fantasy anyway, why does it matter? :D
 
Another piece of the buying vs. renting is availability. How much is it worth to you to be able to always go to the airport and have the plane in the same condition as you left it?

Unless the airplane is being bought for a specific, income generating mission (rental, freight hailing, crop dusting, etc.) it will very rarely make financial sense. Now, there are other non monetary reasons that you can figure in (time savings, you want it, etc.), but that is a number you have to come up with.

The saying that "if it floats, flies, or fornicates, it's cheaper to rent" is very, very true advice, yet there are millions of married people and tons of boats on trailers. You cannot under estimate the value of "I want to own an airplane, I can afford it, and it does not have to make financial sense".
 
Mafoo said:
Some small omissions:

The money towards owning the plane means you have something to sell in the end. The 1,300 is just money out the window.
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This is a point I will give you. I thought of this, but didn't mention it because I didn't want to confuse everyone. Yes, every payment made in the first year, about 200 goes to principle and about 320 goes to interest in my example. (BTW, I put the wrong interest rate in...I meant to put 6.75% and not 6.25%. I'm surprised at you guys; no one caught that?!)

But my figures are NOT biased for a several reasons. First, when you rent I didn't even add in renter's insurance. Two, when you rent you assume no risk with loss or unexpected maintenance. For example, one year in my ownership we found a cracked engine case. :yikes: That was a $10,000 repair!! No 30 dollars per hour maintenance amortization will cover that. That came right out of my bank account and if I didn't have it, I would have had to sell the plane at a loss and continue payments to the bank for the loan for the next 10 years! THAT'S RISK!!!

If I was renting that same aircraft, I would just hand the keys to the FBO and say, "Dude, bummer...you guys have a cracked case on that puppy. Let me know when you get it fixed and in the mean time, give me the keys to that other plane."



Mafoo wrote: [When you rent and go anywhere where you need gas, you have to pay the rate where you get it, but you will only get reimbursed at the rate the people your renting it from pay (at least where I am at), so add that in.]

This is true almost everywhere, but as someone else pointed out, first, it's chump change and two, it can work both ways. I've saved about 75 cents per gallon sometimes. It all probably works out evenly in the end.


There is only one word that truly defines the description of why we purchase an airplane over renting...and it's definately NOT "investment". It's "convenience". There are other words too: "Passion!" and "Pride".



Mafoo wrote: [Lastly, and this is just a guess, there might be some tax deductions on owning a plane, that you don't get from renting (I have no clue really about this one)]

ABSOLUTELY NOT! If you run a business and rent an airplane you can probably deduct the whole expense. If you own the same airplane, just as a car, you can probably only deduct certain expenses, but not everything. Probably this would require creative accounting anyway which would most-likely earn you an audit. Now THAT will add to your bottom line of aircraft ownership!

In conclusion, I am not anti-owning. After all, I do own an airplane with all it's associated costs and risks. I would never go back to renting as long as my finances allow it. I love the convenience and pride it gives me. It is the over night trips that we do regularly that really closes the gap between renting and owning, as well as, I don't have to worry about scheduling a plane only to find out it's not available. My plane is always there at the drop of a hat and 120 bucks per hour.

Gene
 
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The only reason to own a personal plane without a real job is joy, that is the only reason it needs as well. If a plane doesn't bring you joy, it better have a real utility need because otherwise it's a large cost for little. If it brings you joy, it's worth every cent.
 
N2124v said:
Another piece of the buying vs. renting is availability. How much is it worth to you to be able to always go to the airport and have the plane in the same condition as you left it?

Unless the airplane is being bought for a specific, income generating mission (rental, freight hailing, crop dusting, etc.) it will very rarely make financial sense. Now, there are other non monetary reasons that you can figure in (time savings, you want it, etc.), but that is a number you have to come up with.

The saying that "if it floats, flies, or fornicates, it's cheaper to rent" is very, very true advice, yet there are millions of married people and tons of boats on trailers. You cannot under estimate the value of "I want to own an airplane, I can afford it, and it does not have to make financial sense".
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:yes:

Gene
 
Henning said:
The only reason to own a personal plane without a real job is joy, that is the only reason it needs as well. If a plane doesn't bring you joy, it better have a real utility need because otherwise it's a large cost for little. If it brings you joy, it's worth every cent.
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Exactly!! I'm looking for a plane because I want my commute to be fun and I can afford it!
 
drgwentzel said:
This is a point I will give you. I thought of this, but didn't mention it because I didn't want to confuse everyone. Yes, every payment made in the first year, about 200 goes to principle and about 320 goes to interest in my example. (BTW, I put the wrong interest rate in...I meant to put 6.75% and not 6.25%. I'm surprised at you guys; no one caught that?!)

But my figures are NOT biased for a several reasons. First, when you rent I didn't even add in renter's insurance. Two, when you rent you assume no risk with loss or unexpected maintenance. For example, one year in my ownership we found a cracked engine case. :yikes: That was a $10,000 repair!! No 30 dollars per hour maintenance amortization will cover that. That came right out of my bank account and if I didn't have it, I would have had to sell the plane at a loss and continue payments to the bank for the loan for the next 10 years! THAT'S RISK!!!

If I was renting that same aircraft, I would just hand the keys to the FBO and say, "Dude, bummer...you guys have a cracked case on that puppy. Let me know when you get it fixed and in the mean time, give me the keys to that other plane."



Mafoo wrote: [When you rent and go anywhere where you need gas, you have to pay the rate where you get it, but you will only get reimbursed at the rate the people your renting it from pay (at least where I am at), so add that in.]

This is true almost everywhere, but as someone else pointed out, first, it's chump change and two, it can work both ways. I've saved about 75 cents per gallon sometimes. It all probably works out evenly in the end.


There is only one word that truly defines the description of why we purchase an airplane over renting...and it's definately NOT "investment". It's "convenience". There are other words too: "Passion!" and "Pride".



Mafoo wrote: [Lastly, and this is just a guess, there might be some tax deductions on owning a plane, that you don't get from renting (I have no clue really about this one)]

ABSOLUTELY NOT! If you run a business and rent an airplane you can probably deduct the whole expense. If you own the same airplane, just as a car, you can probably only deduct certain expenses, but not everything. Probably this would require creative accounting anyway which would most-likely earn you an audit. Now THAT will add to your bottom line of aircraft ownership!

In conclusion, I am not anti-owning. After all, I do own an airplane with all it's associated costs and risks. I would never go back to renting as long as my finances allow it. I love the convenience and pride it gives me. It is the over night trips that we do regularly that really closes the gap between renting and owning, as well as, I don't have to worry about scheduling a plane only to find out it's not available. My plane is always there at the drop of a hat and 120 bucks per hour.

Gene
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All good points, and you're right. I will stop arguing mine. :)
 
N2124v said:
You cannot under estimate the value of "I want to own an airplane, I can afford it, and it does not have to make financial sense".
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An old wise pilot once told me there are only two basic money rules to live by, WRT owning and/or flying personal aircraft.

1) Never ever try to cost-justify owning a small airplane. It's not possible.

2) Never ever add up all the money you ever spent on aviation.... because you don't want to know.
 
Henning said:
The only reason to own a personal plane without a real job is joy, that is the only reason it needs as well. If a plane doesn't bring you joy, it better have a real utility need because otherwise it's a large cost for little. If it brings you joy, it's worth every cent.
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That's exactly why I own. Can't put a price on that. Ownership is like traveling with a good friend where you've had adventures with and know each others moods. I think the biggest thing you have to accept in ownership is making it a priority. I'm not rich so I have to prioritize everything around my plane. If I was married with kids then I would make them my priority and ownership really wouldn't be possible.
 
Velocity173 said:
That's exactly why I own. Can't put a price on that. Ownership is like traveling with a good friend where you've had adventures with and know each others moods. I think the biggest thing you have to accept in ownership is making it a priority. I'm not rich so I have to prioritize everything around my plane. If I was married with kids then I would make them my priority and ownership really wouldn't be possible.
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For a person making under $100k a year, that pretty much is the deal so if you want to own a 'family plane' it will take 'family sacrafice' to make it happen. That means the family better get some joy out of it as well.
 
It's REALLY easy to spend copious amounts of money on a really basic airplane. It adds up quick.
 
I bought into a1974 Cessna 172 a little over 4 years ago, which was a week after my private pilot checkride . It was a great purchase from both a financial and personal satisfaction point of view. However, I am not looking forward to eventually having to sell the plane.

If your a renter and are looking to buy an airplane, I have a few suggestions regarding buying a 4 seat trainer like a 172. From a financial point of view, don't buy unless you are putting well over 100 hours a year on the rental. Ignore people who tell you not to keep track of how much it costs to fly. Consider a partnership. Understand there are significant non-financial advantages to owning. I have taken a rental to Mexico, but it took a good relationship with a very understanding owner. When you own your own plane, it is much easier to do things like that.

Ryan


Sent from my Nexus 7 using Tapatalk 2
 
From a financial point of view, don't buy unless you are putting well over 100 hours a year on the rental.
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This is the old rule of thumb, but not necessarily true. It depends a LOT on which airplane you buy and how good the condition is when you buy. Owning probably doesn't make financial sense (unless you are talking about maybe a Champ, or etc.), but there are a lot of reasons to own besides financial. Henning is right about the only real reason to own is joy. How much financial sense it makes is not important to most owners or the number of personally owned airplanes would be a lot less. There is more to life than money :) despite what some people think.
 
Electric said:
So, I currently rent different kinds of airplanes, and I'm slowly looking into buying one. As a good pilot would do, I'm trying to look one step ahead, to find out how difficult it is to sell one.

Assuming I want to sell a single engine airplane for its market price, does it typically take a long time to sell one?

Say I buy a c172 from the 60s and a few month later decide I need more of an airplane (or find out I can not afford to mainline even this one) will I be able to sell one reasonable quickly (in a month or so) without loosing a lot of money?

Are there any fees associate with selling an airplane?
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the first thing you need to do is figure out what aircraft you need and buy it and not worry about trying to turn it around.
 
My ideal aircraft is F-22 modified to carry 6 people, a motorcycle and long range tanks that will allow me to circle the globe non stop. :D

It should also come with a lifetime supply of jet fuel.
 
Electric said:
My ideal aircraft is F-22 modified to carry 6 people, a motorcycle and long range tanks that will allow me to circle the globe non stop. :D

It should also come with a lifetime supply of jet fuel.
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I think if I could afford something like that, I just need it to carry me.

I will charter a plane for the rest of them, and buy a bike when I get there :)
 
somorris said:
This is the old rule of thumb, but not necessarily true. It depends a LOT on which airplane you buy and how good the condition is when you buy. Owning probably doesn't make financial sense (unless you are talking about maybe a Champ, or etc.), but there are a lot of reasons to own besides financial. Henning is right about the only real reason to own is joy. How much financial sense it makes is not important to most owners or the number of personally owned airplanes would be a lot less. There is more to life than money :) despite what some people think.
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I was referencing a simple four seat fixed pitch trainer when I mentioned the 100 hours. There can be financial reasons to own compared to renting. In my case, it costs me less money to own than to rent based on how many hours I fly the plane each year. Even if it wasn't cheaper for me to own, I would still want to be an owner because it allows me to fly places it would difficult to take a rental (Dominican Republic for instance ).


Sent from my Nexus 7 using Tapatalk 2
 
Electric said:
So, I currently rent different kinds of airplanes, and I'm slowly looking into buying one. As a good pilot would do, I'm trying to look one step ahead, to find out how difficult it is to sell one.

Assuming I want to sell a single engine airplane for its market price, does it typically take a long time to sell one?

Say I buy a c172 from the 60s and a few month later decide I need more of an airplane (or find out I can not afford to mainline even this one) will I be able to sell one reasonable quickly (in a month or so) without loosing a lot of money?

Are there any fees associate with selling an airplane?
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Coming back to your original question...I sold a 1981 C172P earlier this year. It sold for full asking price, which was $ 60K. I believe that the cream puffs will continue to have a market following. The dogs and shady deals will be a harder sell.

Since I sold it myself, there were no fees. A broker will be another story.
 
How much do the brokers charge, is it a certain percentage?

BTW, you can't just "trade in" your airplane, can you?
 
Electric said:
How much do the brokers charge, is it a certain percentage?

BTW, you can't just "trade in" your airplane, can you?
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Sure, dealers work out trade ins all the time, they'll be looking at trade in numbers that will leave them considerably more than their 10% commission.
 
Electric said:
How much do the brokers charge, is it a certain percentage?

BTW, you can't just "trade in" your airplane, can you?
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Rates vary depending on price. 4-6% is common.

Many stocking dealers were wiped out by the 2008 crash, especially those with floor-planned inventory. As a result, fewer trade opportunities are now available and dealers (and their banks) are far more conservative relative to the loan to value ratio they are willing to accept.
 
Mafoo said:
Some small omissions:

The money towards owning the plane means you have something to sell in the end. The 1,300 is just money out the window.

Same could be said for the hanger space, if your buying it and not renting it. There is a very nice hanger around here going for 40K to buy.

If I want shared hanger space at a very close airport, it's $90 a month.

Your figures did not account for renting an aircraft, and keeping it overnight somewhere else (like if you want to go away for a weekend). Often times that cost extra.

When you rent and go anywhere where you need gas, you have to pay the rate where you get it, but you will only get reimbursed at the rate the people your renting it from pay (at least where I am at), so add that in.

We are in very much a buyers market, and people stopped making planes. There is a good chance that a nice used aircraft will be worth more in 5 years then it's worth today.

Lastly, and this is just a guess, there might be some tax deductions on owning a plane, that you don't get from renting (I have no clue really about this one)

All these things bring those two number closer together.
Click to expand...

Some other things about renting:
:yikes: it can be hard to take an overnight because people schedule every day
:yikes: gps databases are not up to date (leaseback owner doesnt care)
:yikes: minimum hr requirement for all day use
 
Henning said:
The only reason to own a personal plane without a real job is joy, that is the only reason it needs as well. If a plane doesn't bring you joy, it better have a real utility need because otherwise it's a large cost for little. If it brings you joy, it's worth every cent.
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Well said
 
Datadriver said:
Some other things about renting:
:yikes: it can be hard to take an overnight because people schedule every day
:yikes: gps databases are not up to date (leaseback owner doesnt care)
:yikes: minimum hr requirement for all day use
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Yes.

The first point was the biggest reason why I decided to buy. There were too many times that I decided at the last minute to go somewhere for the weekend and then couldn't get a plane because a bunch of renters had the same idea... This is also why I don't belong to a flying club. Want to go somewhere over Thanksgiving? Forget it, the plane was booked months ago!
 
I traded a PA-23/160 for a '79 Skyhawk (yes I know) and sold it on ebay for 25.3K. I had to deliver it from Chicago to Tampa Fl. I tried all others including Trade-a-plane and Barnstormers but in the end Ebay was the only venue that came close to getting me close to the $30K.
I have a 1966 Cessna 150 I'm trying to sell but I'm holding off until the medical excemption for 3rd class is settled. If it goes thru I'll offer the CEssna as a trade for a high time PA23 (with good props.)
 
A number of folks I've known over the years have sold their plane saying "I don't fly enough to own, it's much cheaper to rent." And then most of them rented once or twice and said no mas, the hassle factor far outweighed the financial benefits, and so they quit flying, at least until they found another airplane deal (usually a club or co-ownership) that made sense for their reduced usage. I was one of those folks.
 
I agree owning is better. Before I owned my flying was restricted to X-Mas and my birthday. I lucked out with a free lance A&P who charged $400 + parts until he got a job at Delta. I was forced to use the FBO and got nailed with a 6K annual. The carb. had to be rebuilt, rebuilt gascolator, I could understand but a new mixture control 'cause it was the wring color? Now I'm using an A&P who flies up from Florida to NJ once a year to do annuals. It is too late this year (he'll be here at N40 Sunday doing an annual for another owner's Baron but I'll use him next year).
Just don't get the twin bug. I lost 10K on a PA23 but am foolish enough to try it again but I think I know better now.
 
A number of folks I've known over the years have sold their plane saying "I don't fly enough to own, it's much cheaper to rent." And then most of them rented once or twice and said no mas, the hassle factor far outweighed the financial benefits, and so they quit flying, at least until they found another airplane deal (usually a club or co-ownership) that made sense for their reduced usage. I was one of those folks.
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.

In my experience, Wayne is right on with this. There are exceptions, I'm sure, but generally this holds true.
 
fobermueller said:
I agree owning is better. Before I owned my flying was restricted to X-Mas and my birthday. I lucked out with a free lance A&P who charged $400 + parts until he got a job at Delta. I was forced to use the FBO and got nailed with a 6K annual. The carb. had to be rebuilt, rebuilt gascolator, I could understand but a new mixture control 'cause it was the wring color? Now I'm using an A&P who flies up from Florida to NJ once a year to do annuals. It is too late this year (he'll be here at N40 Sunday doing an annual for another owner's Baron but I'll use him next year).
Just don't get the twin bug. I lost 10K on a PA23 but am foolish enough to try it again but I think I know better now.
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No offense, but if I ever show a moment of weakness, please remind me never to get in your aircraft.
 
If you want to fly into places out of the local area then you need to own or find a great deal that would allow you to take the airplane as much as you like. Otherwise, to punch holes in the sky, better rent. Of course if I would have the cash right now I would probably quit my job, buy a plane (a twin) and enjoy life.
 
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