Why do people buy new aircraft?

Salty

Salty

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Salty
Seriously, $800,000 for something marginally better than a 20 (sometime more) year old used one? What makes someone say, no, I want to spend 100s of thousands more, just to have one with zero hours.

This is a companion thread to the "why do people buy junk aircraft" thread.
 
Because they want new and can afford it--Basically the same reason people buy new cars.
 
The guy a few hangars down from me just spent nearly $1m on a brand new SR22T. No idea why. He is a low time pilot moving up from a light sport.
 
tsts4 said:
Because they want new and can afford it--Basically the same reason people buy new cars.
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Features in cars advance far more rapidly. And they generally speaking, are used more and therefore wear out more quickly.
 
Salty said:
Features in cars advance far more rapidly. And they generally speaking, are used more and therefore wear out more quickly.
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Yeah so -- that doesn't invalidate the analogy--some people just like new. I'm one of them. It's one of the reasons I built--so I could have a new plane without shelling out $500K+
 
They have more cash or credit than you or I have. Me 150K house plane 30K.....:)
 
Sometimes it's what the old plane doesn't have... stories (sometimes questionable), new avionics, and BRS.

And sometimes it's what you and I don't have: large sums of money, assets, or credit.

But why ask why? This just adds to the stream of newer used aircraft later on that can be purchased for less than new pricing.
 
God blessed them...wish I could, if people didn't buy new, we wouldn't have used planes to buy.
 
A new Skyhawk in 1969 cost $93,000 in today's dollars, while a Skyhawk today costs over $300,000. I'd certainly be more apt to own a new plane if they could be had for under $100k.
 
Challenged said:
A new Skyhawk in 1969 cost $93,000 in today's dollars, while a Skyhawk today costs over $300,000. I'd certainly be more apt to own a new plane if they could be had for under $100k.
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Someone has to keep the poor corporate CEO's and lawyers from starving to death. :devil:
 
oilburner said:
Section 179 !!
Send the money to Uncle Sam or buy a plane; you get to keep the plane.
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Not exactly that simple. You need a reason to depreciate the airplane over X years. If used for business, then it's a depreciable asset. Otherwise....no way.

AggieMike - have you considered buying an airplane so you could travel to various car auctions?
 
One buys what one needs, wants and can afford to buy.

Harrison Ford is worth $200m bucks. He owns eight or more planes including a Cessna 680, several antique/restored aircraft and a couple of helos. Why? Because he can afford them and he loves to fly them but only a couple of them are new. Harrison satisfies several missions in several planes instead of trying to stuff all missions into one plane.

Ask yourself the simple question. If you had $50k to spend on a plane what would you buy? Then ask if you had $1m to spend on a plane what would you get? Then finally if you had $30m to spend on a plane what would you get. No doubt you will buy as much plane as you can comfortably afford to buy. The more you spend the more you get but we all are constrained by our means and so will usually settle for less than we actually want.
 
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Challenged said:
A new Skyhawk in 1969 cost $93,000 in today's dollars, while a Skyhawk today costs over $300,000. I'd certainly be more apt to own a new plane if they could be had for under $100k.
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I'm betting they sold a lot more Skyhawks back 1969, there was less lawsuits, and avionics, engine has also on up proportionally.
 
I find the rich-worship on the basis of their supposed charity in bringing on used aircraft to market tomorrow, a rather specious proposition. This is a similar dynamic to the affordable housing shortage in this Country. This is to say, when they build new, it's all high end rentals and even worse in the SFH market. You're not allowed to build a new, minimalist, sub 2000sq ft home in the decent school district (socioeconomic gerrymandering). Few can legitimately afford it today nor tomorrow, and the majority who attempts to out of their means class,are house poor for life. Nothing gets solved.

It would be one thing if they're buying Cessna 182s, Arrows and SR20s en masse, like they did in the late 60s early 70s, but they're not. They're buying onesy twosie Barons, SR22s/TTxs...and a hell of a lot of turboprop singles. That doesn't help *our* GA, there's just no velocity of money in that kind of replacement fleet.

Our only saving grace is the part 141 flight schools. That's who I'll be thanking for their charity in the next 2 decades. What's more, it keeps the parts sourcing viable for those of us who will attempt to continue to maintain our vintage spam cans of same/similar make/model.
 
I'm just glad they do, somebody has to keep these companies afloat.
 
If someone was making a "new" Cardinal, I'd be interested in having one rather than flying a 40+ year old workhorse on daily missions over urban areas.
 
Why do people buy new airplanes? Because they can. Those of us who don't have the means to buy new probably won't understand why someone would want a brand new light airplane over an old one.
 
hindsight2020 said:
I find the rich-worship on the basis of their supposed charity in bringing on used aircraft to market tomorrow, a rather specious proposition. This is a similar dynamic to the affordable housing shortage in this Country. This is to say, when they build new, it's all high end rentals and even worse in the SFH market. You're not allowed to build a new, minimalist, sub 2000sq ft home in the decent school district (socioeconomic gerrymandering). Few can legitimately afford it today nor tomorrow, and the majority who attempts to out of their means class,are house poor for life. Nothing gets solved.
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If I won the powerball, I'd buy a beachfront megamansion, tear it down, and put up a 1500sq' bungalo.
 
My initial response was similar to the first posted: because they can.

As a data point, I bought my Sky Arrow new in 2007 with no tax benefits. $75.5k and I've owned it for 10 years, not an unreasonable annual buy-in to own a new aircraft, albeit a Light Sport.

A new one today is about 50% more. Though I'm not interested in selling, price appreciation of new ones help support used prices.
 
FastEddieB said:
My initial response was similar to the first posted: because they can.

As a data point, I bought my Sky Arrow new in 2007 with no tax benefits. $75.5k and I've owned it for 10 years, not an unreasonable annual buy-in to own a new aircraft, albeit a Light Sport.

A new one today is about 50% more. Though I'm not interested in selling, price appreciation of new ones help support used prices.
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Yes, but your case is a bit different from what I think the OP was asking about.....the one $1M G58 that Beech sells per year vs the plethora of 1980s B58 for less than $200K.
 
Fearless Tower said:
Yes, but your case is a bit different from what I think the OP was asking about.....the one $1M G58 that Beech sells per year vs the plethora of 1980s B58 for less than $200K.
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The question is, how much is it going to cost to straighten out all the stuff that is guaranteed wrong or worn out with a 30 or 40 year old airplane? Certainly not $800k, but it likely will cost more than people really expect.

This is where the airplane refurbishment idea comes into play, yet people seem to think that is a stupid idea too because the end result costs more than fair market value for a used (but not refurbished) airplane.
 
Salty said:
Seriously, $800,000 for something marginally better than a 20 (sometime more) year old used one? What makes someone say, no, I want to spend 100s of thousands more, just to have one with zero hours.

This is a companion thread to the "why do people buy junk aircraft" thread.
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Because it has that new plane smell!
 
mondtster said:
The question is, how much is it going to cost to straighten out all the stuff that is guaranteed wrong or worn out with a 30 or 40 year old airplane? Certainly not $800k, but it likely will cost more than people really expect.
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Not all airplanes or buyers are the same.
 
mondtster said:
The question is, how much is it going to cost to straighten out all the stuff that is guaranteed wrong or worn out with a 30 or 40 year old airplane? Certainly not $800k, but it likely will cost more than people really expect.

This is where the airplane refurbishment idea comes into play, yet people seem to think that is a stupid idea too because the end result costs more than fair market value for a used (but not refurbished) airplane.
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I don't think the refurbishment idea is stupid. No dog in that fight, but I presume part of the complication is that there is no market-accepted logbook entry that allows for a standardized asking price increase for airframe overhaul, the way it does exists when you overhaul the engine IAW FAA regulations. If there was a similar standard for the airframe, then perhaps the refurbishment idea would gain market traction.

This is all to do about nothing. I am an IRAN owner, so I can simply bypass the entire discussion, just repair as needed and fly at a discount than what a new airplane costs. Not a distinction without a difference either, as I can certainly afford to fly and maintain, but not purchase, a 1000AMU airplane. OPEX is not my ceiling, it's the acquisition. Even when you look at something like a Cirrus, the financing costs dwarf its operation costs. Yet people think, fuel bladder replacement or retract gear maintenance is blasphemy and somehow the inflection point that determines whether or not someone can afford to own a 750AMU airplane? Literally, look at the gear endangered species thread, you'd think the children are going hungry because of a gear swing, so let me buy a new SR/TTX to save money? That's some common core math right there..:rolleyes:
 
It's definitely a valid question. I do understand why, but I will never buy new unless it's for business reasons. If I have 300k to spend on a plane, I'd much rather spend it getting something like a decent Cessna 414 (like @Ted DuPuis ) over buying a new C172. I would rather buy used and get bigger, just my preference.
 
The "because they can" argument is not complete. There are big differences between a 2008 Cirrus SR22 and a 2017 Cirrus SR22. The same applies to other manufacturers.
 
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Matthew K said:
It's definitely a valid question. I do understand why, but I will never buy new unless it's for business reasons. If I have 300k to spend on a plane, I'd much rather spend it getting something like a decent Cessna 414 (like @Ted DuPuis ) over buying a new C172. I would rather buy used and get bigger, just my preference.
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Cloud Nine did not spend anywhere close to $300k on the 414. The price was 1/3 that. While it was a good deal, we also got what we paid for - a plane with a bad panel with 25 year old engines with one near hour TBO, 20 year old props which both started leaking within a few months, and a host of other issues, but on a '77 model with low TTAF and a solid body. Of course, these were expected pitfalls of buying a 40 year old plane that had been sitting. A $300k 414 would've been a much, much nicer plane, but this was the way we could afford to make the jump. The way we've gone about it is not right for everyone (or even right for most people) due to our unique situation.

I tend to agree that I would rather save the money to buy a bigger plane, but everyone's needs and use cases are different. As @citizen5000 correctly pointed out, a new Cirrus is not the same as a 10 year old Cirrus, as they are continually improving the planes. So if you want a new Cirrus and can afford it, there are definite benefits to going new. Want that fancy new avionics package? You'll typically need to go new to get it.
 
This is interesting to me, because I'm generally in the "buy new" category for most things. I generally like to buy new cars (even though I _know_ it's wasteful), and I'd rather have a new BMW than a used Ferrari, and I'll make myself feel better by holding onto it for 15 years. It's nice to option out things exactly the way you want, and it's fun to be the first owner and to treat it "your way." There's also the big bonus of a warranty. I was very surprised to find myself in a 30 year old airplane given that I had a roughly million-dollar budget. There's no ardor like that of the newly-converted, so here's my thinking:

Airplanes are a somewhat unusual case because the more expensive stuff is so often objectively more capable. A Maserati, a Lexus, and a Ford are all going to get me to work reliably, safely, and at about the same time. The only reason to buy the higher end stuff is because you just want something nicer and fancier, and "new" is nicer and fancier. A used TBM, on the other hand, is massively more capable than a new DA62, and they're the same price. The TBM _will_ get you there way more quickly and in more situations than the 62. My (admittedly ancient) Aerostar is just in a different league than a new Mooney or Cirrus. They're not even close in terms of capability and mission flexibility, and the extra $400,000 that I didn't spend pays for a lot of maintenance and fuel. Everyone throws out "tax," which is true to an extent, but you can still depreciate used aircraft if you structure it properly, and if it's business use, you can deduct maintenance, too. At the end, you still have less money than the guy who purchased the cheaper aircraft to begin with.

There's also a _really high_ market ceiling with airplanes. Even if you have $5mm to spend, wouldn't you rather have a used jet instead of a new King Air in most cases? Even the ultra-wealthy (Google founders, celebrities, etc.) tend to buy used airplanes, because the performance increases tend to be overwhelmingly desirable. Rich enough to buy a new King Air? Buy a used Citation. Rich enough to buy a new Citation? Buy a used Gulfstream. Rich enough to buy a new Gulfstream? Buy a used airliner and put a swimming pool in it.
 
I realized I didn't really answer the question. :) I think people buy new, especially SEs like Cirrus, because they've got the cash and no particular desire to deal with the additional training and insurance requirements of going to the bigger/more sophisticated airplanes. I think Cirrus took a brilliant approach to the new market: you can get insured in a new SR22T with just a PPL, IA, and a high-performance endorsement. Not much additional training and no new ratings required. No gear-up risk to give the insurers heartburn.

If a relatively new PPL could just go get a FIKI twin for the same price or an SETP for an extra few hundred grand, they probably would. But that decision also entails substantial additional training, and more importantly, a lot of time. If you're in the "mass affluent," and you want an airplane NOW that you can fly places, a Cirrus really does make sense, and my argument above doesn't hold much water. The fact that Cirrus markets an unpressurized piston single as a go-anywhere/anytime personal airliner to 100hr pilots is a separate issue, of course. . . .
 
starglider said:
Not much additional training and no new ratings required. No gear-up risk to give the insurers heartburn..
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Once the mission is known and the budget is established then picking out a product that fits can be made and if the budget is adequate possibly buy new versus used. And the pilot/owner can assess the deficits in experience and training to be able to buy and insure the plane of choice.

A Cirrus purchase requires factory training and often extra hours with a CSIP if the insurer deems the training necessary for a low time pilot for example. The same may hold true for a Mooney or Cessna TTx purchase since these planes are higher performance capable of flying in the flight levels.

A jet requires a type rating of course and most low time pilots would not be able to get insurance at all for such an aircraft.

The purchase of an Evolution turboprop brings an even steeper insurance issue since this 300ktas pressurized plane is also an experimental.

The decision to get a twin also brings the complexity of twin training. But a piston twin has plenty of good competition among the piston singles, especially the high performance SR22T with it's parachute. Since the additional engine does not provide extra speed but provides an extra level of redundancy in case of trouble. And the extra engine requires higher maintenance cost over a single engine plane.
 
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Don't know any better

Illusion of safety/quality

Tax reasons of some sort
 
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