When can you afford an airplane?

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shinysideup

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shinysideup
I know this is kind of a loaded question that can be answered in a thousand different ways, but what rule of thumb would you go by for being able to afford sole ownership of say a light piston single?

When you can afford to buy outright?
When you can afford to overhaul without taking a loan?
When you can own the plane and keep the lights on most days of the week?
 
when you want it bad enough that you'll make it work but realistic enough to know you could handle a couple of bad month$ or have a plan for worst case scenario. and you can still pay your bills.

some of these are a little silly. they can all be answered with "when you have enough cash". but sometimes (I said 'sometimes') borrowing can be cheap. I'm not saying it is and I'm not saying it's smart to do, it's just an option.
When you can afford to buy outright?
When you can afford to overhaul without taking a loan?
When you can own the plane and keep the lights on most days of the week?
 
shinysideup said:
I know this is kind of a loaded question that can be answered in a thousand different ways, but what rule of thumb would you go by for being able to afford sole ownership of say a light piston single?

When you can afford to buy outright?
When you can afford to overhaul without taking a loan?
When you can own the plane and keep the lights on most days of the week?
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Easy answer is IYHTAYCAI.

What kind of plane? Big diff between a clapped out but functional C150 and a new Plastic Wonder. How much are you going to fly it? What are your financial obligations and resources?
 
I could afford to buy outright because I saved the money. Living in a foreign country making tax free money took care of that.

Keeping annual operating costs at less than 1/4 of my annual salary allows me to operate my aircraft and have enough left over for other things.

Didn't have the money for two unexpected overhauls so I did have to put some on the charge card.

For most of us, it's about making aviation a priority in life.
 
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I was speaking more generally rather than in a (my) particular case, but for the sake of argument lets assume I'm considering a $80-100K airplane (M20J or similar). How much cash would you want to keep aside, and how much would you budget to operate it? I figured operating costs at around $20K/yr in my area (GTA) assuming 75 hours a year.
 
I could afford to buy my plane out right but, I put about 30% down and took out home equity loan just too buy myself some wiggle room in the event that there was an emergency.

So technically I have a payment on my plane that is $111 per month. my hangar is $150 per month. My insurance is $600 per year.

How I actually pay the plane off is a bit of a different story as I'm not really planning on paying it off over 15 years but in the event that something catastrophic happened I can get away with owning a plane for just a few hundred bucks a month.

Not too bad. I can carry my whole family in a fun little plane and yesterday I passed a 172 in the air so there's at least one plane that's slower than mine LOL
 
Also it's important to remember that the plane for the most part these old spam cans, are depreciated assets. So if you purchase it and realize you're in over your head, you can sell it. You really can't do that if you buy a brand new car and decide to sell it after 2 years
 
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[QUOTE="SixPapaCharlie, post: 2399673,

Not too bad. I can carry my whole family in a fun little plane and yesterday I passed a 172 in the air so there's at least one plane that's slower than mine LOL[/QUOTE]

Yeah but the 172 was practing slow flight!
 
shinysideup said:
.....I'm considering a $80-100K airplane (M20J or similar). How much cash would you want to keep aside, and how much would you budget to operate it? I figured operating costs at around $20K/yr in my area (GTA) assuming 75 hours a year.
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That’s sounds high to me unless you’re borrowing a good chunk of that purchase price.
 
mscard88 said:
[QUOTE="SixPapaCharlie, post: 2399673,

Not too bad. I can carry my whole family in a fun little plane and yesterday I passed a 172 in the air so there's at least one plane that's slower than mine LOL
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Yeah but the 172 was practing slow flight![/QUOTE]

Lol! I was gonna say he passed him going the other way
 
When you can REALLY afford the plane, you very well may be to old to fly it. Maybe have to settle to just sit inside the plane & drink some PBR instead, no need to be airworthy for that.
 
Ok here's a real answer.... figure out the cost of the airplane you want. Now, can you afford to go to vegas and loose it all gambling or on hookers/blow/whatever and still be able to afford the legal fees from whatever terrible stuff you did? Then if you have all that covered, can you come up with another $20-40k for a replacement engine if you absolutely had to?

If you can answer all this in the affirmative you can afford an airplane. Also, if you can't honestly figure this out without our help seriously find someone to help you manage money because(not trying to be mean but honest) it's not that hard.
 
Much depends on how much plane you want to buy? Some feel the need to move their family of 6 across this great land, others are content with a more modest steed.
 
cowman said:
Ok here's a real answer.... figure out the cost of the airplane you want. Now, can you afford to go to vegas and loose it all gambling or on hookers/blow/whatever and still be able to afford the legal fees from whatever terrible stuff you did? Then if you have all that covered, can you come up with another $20-40k for a replacement engine if you absolutely had to?

If you can answer all this in the affirmative you can afford an airplane. Also, if you can't honestly figure this out without our help seriously find someone to help you manage money because(not trying to be mean but honest) it's not that hard.
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Haha an interesting way to look at it... I don't know that I could lose six figures in Vegas, pay legal fees and cover an engine rebuild, but I also don't think that lacking that capability makes someone unable to afford an airplane.

I agree that it's an issue that each prospective owner would need to figure out on their own or with professional advice. Just wondering what general figures/rules of thumb members here use to gauge affordability.
 
Similar to buying a house or a new car, you don't really want to buy a plane outright(assuming you have a good credit score), unless you just have the money to blow and want to. If for no other reason, you can put that money you'd be spending outright in actual investments and easily cover any interest you may pay on that loan. Better to have that cash easily accessible over tying it up in one large "investment".
 
shinysideup said:
Haha an interesting way to look at it... I don't know that I could lose six figures in Vegas, pay legal fees and cover an engine rebuild, but I also don't think that lacking that capability makes someone unable to afford an airplane.

I agree that it's an issue that each prospective owner would need to figure out on their own or with professional advice. Just wondering what general figures/rules of thumb members here use to gauge affordability.
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Well if you're looking for an idea of actual costs the answer is going to depend on knowing things like what airplane you want/what you need it to do. There are plenty of perfectly good airplanes for well under six figures out there... as I said it just depends. Plenty of people here will be perfectly willing to tell you what their costs are for their airplane but they vary pretty widely depending on model, avionics/equipment, usage, and to some extent location.
 
Someone told me this about vintage car racing and I think it is perfectly applicable to airplanes. Get a stack of $100 bills. One at a time, start throwing them into a fire. If at any time this makes you feel uncomfortable, ownership is not for you. Yes, the pain isn't constant, but sometimes you have to cut several hundred dollars for parts or labor unexpectedly, and you can't let it bother you.
 
Here's a practical test:

How much you spending renting each year?
If you can buy and operate a plane for that or less, you can afford it.

When I bought I went back and forth on paying cash for the RV or 50% down on an SR-20. Glad I don't have a loan!
 
sourdough44 said:
Much depends on how much plane you want to buy? Some feel the need to move their family of 6 across this great land, others are content with a more modest steed.
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Yep. I think many prospective owners get caught up in wanting more airplane than they can realistically afford.

There aren't too many people in this hobby that can't afford a $15k Cessna 150 or something similar. Yet nobody seems to want them, they'd rather have a bigger and fancier airplane. But many people fall into the trap of buying the most airplane they can afford and forget that they have to have some spare cash left over to operate and maintain that airplane. Buy what you can realistically afford to own and operate.

Honestly, the most enjoyable airplane I've owned so far is also the cheapest one and the slowest one as well. I've flown it all over the place and landed places where you wouldn't take those fancy/expensive airplanes. I went up the chain, buying the bigger/faster/more capable airplanes and ended up back in a simple airplane, having more fun.
 
cowman said:
Well if you're looking for an idea of actual costs the answer is going to depend on knowing things like what airplane you want/what you need it to do. There are plenty of perfectly good airplanes for well under six figures out there... as I said it just depends. Plenty of people here will be perfectly willing to tell you what their costs are for their airplane but they vary pretty widely depending on model, avionics/equipment, usage, and to some extent location.
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Agreed - I've found the posts where people describe their costs very helpful and informative.

Ravioli said:
Here's a practical test:

How much you spending renting each year?
If you can buy and operate a plane for that or less, you can afford it.

When I bought I went back and forth on paying cash for the RV or 50% down on an SR-20. Glad I don't have a loan!
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Thanks for the input.
 
It’s a ‘Norwegian surrender’, left there as the war ended. In the early 50’s the Norwegian military refurbished a bunch and rebarreled them in 30-06, this is a 30-06 chambering.
 
If your worried about it ,you can’t afford to own. Bought my first airplane ,as my oldest started college,wasn’t going to let the college get all my money.
 
The only time you will know you can afford an airplane is when you don’t have to ask yourself if you can afford it.
 
mondtster said:
There aren't too many people in this hobby that can't afford a $15k Cessna 150 or something similar. Yet nobody seems to want them, they'd rather have a bigger and fancier airplane.
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Well, I used to own a C-150, and I can still afford one today. The problem is that for most people, most airplanes they *can* afford cannot meet their mission. It is just as counterproductive to afford to own something that doesn't fulfill your mission, as not being able to afford what can fulfill it.

I would argue the former is more frustrating, which is why I rid myself of the 150 in 18 months and only flew it like 40 hours. I then proceeded to put 260 hours over a 12 month period into a warrior II a year later. That's the point.

I will say, owning the 150 was a nice way to become versed into certified aircraft ownership.
 
shinysideup said:
I know this is kind of a loaded question that can be answered in a thousand different ways, but what rule of thumb would you go by for being able to afford sole ownership of say a light piston single?

When you can afford to buy outright?
When you can afford to overhaul without taking a loan?
When you can own the plane and keep the lights on most days of the week?
Click to expand...
Nah, none of those.
It's when your wife says you can.
 
Unless you are flush with cash, rarely can you make a financial sense argument for a purchase like an airplane.

Reality is you can afford it when you make it a strong enough priority in you life regardless of your situation.

I am always reminded of this pic when a question like this pops up:

attachment.php
 
I️ find reading these threads amusing and in reality an exercise in rationalization. In my view the bottom line is if you want a plane, buy it. Like owing an RV, a McMansion, a luxury car or boat, many strain mightily to justify the costs associated with each purchase creating straw man arguments knocking down each of them, one by one. Or in other words classic rationalization of making a “want”into a “need.”. For most if not all of us, it never works out in the cold light of a spreadsheet. I think that only if you use an airplane extensively for business travel, it may pencil out but then you are talking about a fairly expense plane to own and maintain, and a serious set of aviation skills and training. If you want a plane and you have enough resources to buy one and understand you may have to change your lifestyle to pay for it, do it. I did at 59
 
Do you have any other debts at the moment, or reasonably expected in the next few years?
Is your income stable ie reasonably predicted to stay at current levels for the next few years?
Single/Married? either way, any children possible in the next few years?
How much are you able to set aside each year after all expenses?

PS I do not like the idea of a loan -for a large, optional expenditure.
 
You can afford it when you want it bad enough. I mean honestly, who knows. It’s a personal decision about priorities. I bought my first plane at... 26 I think? People probably laughed and laughed and wondered what the hell I was doing - I was obviously in way over my head as far as they were concerned. But to me, I was the one laughing. I had the only thing I had ever wanted in the whole world. Priorities, priorities.
 
hindsight2020 said:
Well, I used to own a C-150, and I can still afford one today. The problem is that for most people, most airplanes they *can* afford cannot meet their mission. It is just as counterproductive to afford to own something that doesn't fulfill your mission, as not being able to afford what can fulfill it.
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That's the trap. Often times, the airplanes that the prospective owner can really afford don't meet their needs/desires. So they start looking at what they can't afford and try to find ways to make it work. Some people do a better job than others with managing the financial demands of owning something that is probably stretching their budget. I suspect the stretching of the budget to afford more airplane is one of the reasons we're seeing a slow in the amount of flying being done by many owners, as other parts of our lives are becoming more expensive every day.

The other part of this is that I think many first time owners don't really know what they're going to do with the plane once they get it. They may think that they really need 4 or 6 seats because all their buddies or their family is going to go with them every time they fly, only to find out that they're solo and stay relatively local 90% of the time. That Cessna 150 starts looking pretty appealing then, since it is cheap to fly, compared to the Bonanza or whatever higher end airplane they ended up with.
 
skiermike said:
You can afford it when you want it bad enough. I mean honestly, who knows. It’s a personal decision about priorities. I bought my first plane at... 26 I think? People probably laughed and laughed and wondered what the hell I was doing - I was obviously in way over my head as far as they were concerned. But to me, I was the one laughing. I had the only thing I had ever wanted in the whole world. Priorities, priorities.
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Sounds pretty awesome, what did you buy?
 
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