Borrowing a plane

[dell30rb]

I have a friend who owns an IFR certified Cessna 152. He is in the military and is being deployed in a month, and is not sure what he's going to do with the airplane. I'd like to use it while he's gone and so I'm going to write him up a proposal that I hope he'll find acceptable. I haven't known him very long but we have been flying together (in the 152) alot recently. Below is an out line of what I am considering sending him, comments are appreciated.

I have not owned an airplane so I am a little unsure of the costs - I know there are plenty of 152 owners on this board, i'd like to hear from you.

I'd have the plane for 6 months, so I'd pre-pay the insurance (through him?) and leave him a refundable security deposit against damage on the aircraft (probably the amount of the insurance deductable)

I would cover tie down costs and keep the airplane at my home airport. (15 min from his home airport)

I'd estimate he uses the plane (conservatively) at 200 hours per year. I'll probably put 80 hours on it.

In addition to paying insurance and tie down, i'll pay him an hourly maintenance and engine overhaul fee. With a 2000hr TBO and a $14,000 overhaul cost, the engine reserve fee would be $7 an hour. Yearly maintenance i'd estimate at $2500 per year with 200 hours per year the cost would be $12.50. We'll call it $20 an hour to cover both.

So, to summarize I would pay him $20 an hour (probably send his wife a check each month) plus cover the insurance and tie down. One thing I am unsure about - any maintenance that needs to be performed while he is gone. He is familiar with the shop on my home airfield, so that is a plus.

 

[Let'sgoflying!]

20/hr sounds way low to me even considering the tiedown and insurance.
I guess I would start by pricing it at FBOs.
I also have a calculator that might help to put some hard numbers on input costs, pm me if desired.

 

[wabower]

Like, say, about $40 low?

20/hr sounds way low to me even considering the tiedown and insurance.
I guess I would start by pricing it at FBOs.
I also have a calculator that might help to put some hard numbers on input costs, pm me if desired.

 

[Tom-D]

I have a friend who owns an IFR certified Cessna 152. He is in the military and is being deployed in a month, and is not sure what he's going to do with the airplane. I'd like to use it while he's gone and so I'm going to write him up a proposal that I hope he'll find acceptable. I haven't known him very long but we have been flying together (in the 152) alot recently. Below is an out line of what I am considering sending him, comments are appreciated.

I have not owned an airplane so I am a little unsure of the costs - I know there are plenty of 152 owners on this board, i'd like to hear from you.

I'd have the plane for 6 months, so I'd pre-pay the insurance (through him?) and leave him a refundable security deposit against damage on the aircraft (probably the amount of the insurance deductable)

I would cover tie down costs and keep the airplane at my home airport. (15 min from his home airport)

I'd estimate he uses the plane (conservatively) at 200 hours per year. I'll probably put 80 hours on it.

In addition to paying insurance and tie down, i'll pay him an hourly maintenance and engine overhaul fee. With a 2000hr TBO and a $14,000 overhaul cost, the engine reserve fee would be $7 an hour. Yearly maintenance i'd estimate at $2500 per year with 200 hours per year the cost would be $12.50. We'll call it $20 an hour to cover both.

So, to summarize I would pay him $20 an hour (probably send his wife a check each month) plus cover the insurance and tie down. One thing I am unsure about - any maintenance that needs to be performed while he is gone. He is familiar with the shop on my home airfield, so that is a plus.

Talk to him see what number he has in mind..

 

[dell30rb]

20/hr sounds way low to me even considering the tiedown and insurance.
I guess I would start by pricing it at FBOs.
I also have a calculator that might help to put some hard numbers on input costs, pm me if desired.

It does sound low but I figured $2500 was reasonable. And how about $14k overhaul?

I know he is estimating around $800-1000 annual in january. And $1500 a year beyond that?

 

[dell30rb]

Like, say, about $40 low?

I rent one for $70 an hour wet including (good) insurance. Fuel is about $35 an hour... if it cost me $60 an hour to "rent" this plane and you add fuel, I could rent a much nicer and faster airplane

 

[oldShar]

While $20 does sound low, he is segregating insurance and parking from that hourly maintenance figure. Don't also forget to add in gas and oil.

It might be nice to assume breakage costs as well, unless the A&P determines that it is a wear-break (ie assume the caveat -- "You break it, you buy it")

 

[wabower]

You're comparing two different kinds of fruit. Does the rental rate include exclusive use and most of the rights of ownership?

I rent one for $70 an hour wet including (good) insurance. Fuel is about $35 an hour... if it cost me $60 an hour to "rent" this plane and you add fuel, I could rent a much nicer and faster airplane

 

[AirDC]

I think you should be able to get away with less the actual forecasted maintenance reserves since you are covering his insurance and tie-down. The alternative for him is continuing the pay for the tie-down + insurance in addition to the horror of keeping the airplane on the ramp for that time. Or, a lease-back to a FBO which will be used for flight training. I think $20 is a good starting negotiating point to know his plane will be taken care of by someone he knows. If he won't take it, maybe up to $30.

 

[dell30rb]

While $20 does sound low, he is segregating insurance and parking from that hourly maintenance figure. Don't also forget to add in gas and oil.

It might be nice to assume breakage costs as well, unless the A&P determines that it is a wear-break (ie assume the caveat -- "You break it, you buy it")

For breakage, i'd probably offer to cover anything up to the insurance deductible - if it is over the deductible I'd pay that and let insurance handle it. I am planning on leaving him a refundable deposit that would cover the deductible anyway. If it were something stupid like I locked up a wheel and put a bald spot on the tire, i'd pay for that. (haven't done this yet)

As far as wear-break, yes I would let him pay for that. If something small I will probably cover it out of courtesy for letting me use the airplane, but if I get stuck putting a brand new vac pump on a bird I will only put 80 hours on, it completely blows my budget and I might as well rent.

I'm guessing its about $32 an hour for gas/oil. I would of course pay that out of my own pocket.

 

[Adodero]

Make sure you look into a non-owned insurance policy to cover yourself (~200/yr)

 

[dell30rb]

You're comparing two different kinds of fruit. Does the rental rate include exclusive use and most of the rights of ownership?

No, but I wouldn't pay $100 an hour for that. The aircraft I rent have good availability and I can take one for a week if I want to, with only a 1hr per day minimum.

 

[dell30rb]

I think you should be able to get away with less the actual forecasted maintenance reserves since you are covering his insurance and tie-down. The alternative for him is continuing the pay for the tie-down + insurance in addition to the horror of keeping the airplane on the ramp for that time.

Yup. However I do want to cover his actual maintenance costs, if not a tad more.

 

[Morne]

I rent one for $70 an hour wet including (good) insurance. Fuel is about $35 an hour... if it cost me $60 an hour to "rent" this plane and you add fuel, I could rent a much nicer and faster airplane

Then you answered your own question. $70 per hour wet minus $35 per hour fuel = $35 an hour dry rate. Since you're willing to cover a few other things, and keep the bird exercised, maybe knock it down to $30/hour.

Locally, 152 rental (wet) is about $66 an hour.

 

[dell30rb]

Then you answered your own question. $70 per hour wet minus $35 per hour fuel = $35 an hour dry rate. Since you're willing to cover a few other things, and keep the bird exercised, maybe knock it down to $30/hour.

Locally, 152 rental (wet) is about $66 an hour.

I was thinking up to $30 an hour. I might start at $24. That would be $14k overhaul and $3400 per year maintenance. I hope those are reasonable numbers? The airplane in question has over 10,000 airframe hours.. putting time on the airframe at this point does not really reduce the value

 

[Anthony]

You're comparing two different kinds of fruit. Does the rental rate include exclusive use and most of the rights of ownership?

I think Wayne is correct here. Are you going to be the only person that has access to the plane? This is a very different dymanic than average FBO rental.

 

[dell30rb]

I think Wayne is correct here. Are you going to be the only person that has access to the plane? This is a very different dymanic than average FBO rental.

Very true, however the $70 an hour I pay for a 152 is through a club, and I have very good access to the aircraft. Its really almost as good as owning. I very rarely have scheduling issues. Considering $25 an hour for mx, $35 an hour for fuel I'm at $60 an hour. Add tie down and insurance and i'm right at about $70 an hour

 

[Anthony]

Yes I believe so. Very true, however the $70 an hour I pay for a 152 is through a club, and I have very good access to the aircraft. Its really almost as good as owning.

That's is a nice position to be in. Very rare in today's rental market. Sounds like you have a lot of good options. There is also value in you flying the plane to keep it from rotting, so maybe that offsets the "Opportunity Premium".

 

[poadeleted20]

$20/hour plus fuel/oil plus insurance plus tiedown doesn't seem unreasonably low for the described situation. Just make sure you're an "additional/named insured" on that policy for which you are paying. Otherwise, you'll also need your own non-owned ("renter's") policy to cover your own exposure to liability/damage claims as well as meeting the "open pilot waiver" clause on the owner's insurance.

 

[wabower]

You should also consider at the economics from the standpoint of the rental or club owner. They have multiple users to generate income for their planes, in contrast to the contemplated deal where only a single user will contribute to the pot.

Very true, however the $70 an hour I pay for a 152 is through a club, and I have very good access to the aircraft. Its really almost as good as owning. I very rarely have scheduling issues. Considering $25 an hour for mx, $35 an hour for fuel I'm at $60 an hour. Add tie down and insurance and i'm right at about $70 an hour

 

[Jeanie]

Yes, but he will know that someone who cares is watching over his plane and that counts in my book.

 

[dell30rb]

Yes, but he will know that someone who cares is watching over his plane and that counts in my book.

Right, and he did not buy the plane to make a profit. If he wanted to do that, he could lease-back.

I basically want to set up a deal where he can be assured the plane will be well-insured and he will be covered in case something happens to it - and I will be assuming the full cost of operating it. (tiedown, insurance, maintenance)

 

[wabower]

You could also make the argument that he could drop in-flight coverage and hangar the airplane for six months for less than his repair cost exposure to having someone else fly it.

Yes, but he will know that someone who cares is watching over his plane and that counts in my book.

 

[dell30rb]

You could also make the argument that he could drop in-flight coverage and hangar the airplane for six months for less than his repair cost exposure to having someone else fly it.

Thats true, except we have logged many hours in his plane and I am sure he is confident that I will operate it in a manner that does not expose it to unnecessary risk. Also the cost of putting it in a hangar is pretty steep, and he would need to pay an A&P to winterize it to keep corrosion at bay while it sits for 6 months. It would probably cost near 1 AMU to do all that, and I know insurance on the airplane is pretty cheap.

 

[TMetzinger]

Make sure you look into a non-owned insurance policy to cover yourself (~200/yr)

Or get yourself added as a named insured in the policy since you're paying it. Would probably be cheaper than getting your own coverage.

Sent from my ADR6300 using Tapatalk

 

[Fearless Tower]

$20/hour plus fuel/oil plus insurance plus tiedown doesn't seem unreasonably low for the described situation. Just make sure you're an "additional/named insured" on that policy for which you are paying. Otherwise, you'll also need your own non-owned ("renter's") policy to cover your own exposure to liability/damage claims as well as meeting the "open pilot waiver" clause on the owner's insurance.

What Ron said!

If you are not named on his insurance, and you need to get your own non-owned insurance, I would say that you should not be expected to pay his insurance.

I'm military and if I was deploying and going to do a similar arrangement on my airplane, I would not expect you to pay my insurance unless you were FULLY covered under my insurance.

 

[dell30rb]

What Ron said!

If you are not named on his insurance, and you need to get your own non-owned insurance, I would say that you should not be expected to pay his insurance.

I'm military and if I was deploying and going to do a similar arrangement on my airplane, I would not expect you to pay my insurance unless you were FULLY covered under my insurance.

Got it. I figured if I would get named on his policy and pay it in advance, it would be better than just doing the open pilot and getting renters ins for myself. Because he would know that the plane would be properly insured.

 

[Fearless Tower]

Got it. I figured if I would get named on his policy and pay it in advance, it would be better than just doing the open pilot and getting renters ins for myself. Because he would know that the plane would be properly insured.

That is generally the best way to go, but depending on your experience level compared to his, it may be cheaper to do get non-owned than add you to his policy. In a 150, it probably won't make much of a difference, but in some high performance airplanes, adding a low time pilot to a hihg time pilots insurance can make the premium ridiculous.

 

[dell30rb]

That is generally the best way to go, but depending on your experience level compared to his, it may be cheaper to do get non-owned than add you to his policy. In a 150, it probably won't make much of a difference, but in some high performance airplanes, adding a low time pilot to a hihg time pilots insurance can make the premium ridiculous.

That is a good point. I should have about 150hours and an instrument rating by the time he deploys. I checked out the AOPA insurance calculator and the insurance seems pretty reasonable for my level of experience in a 152.

 

[poadeleted20]

Right, and he did not buy the plane to make a profit. If he wanted to do that, he could lease-back.

 

[Fearless Tower]

That is a good point. I should have about 150hours and an instrument rating by the time he deploys. I checked out the AOPA insurance calculator and the insurance seems pretty reasonable for my level of experience in a 152.

I'm guessing it won't be a big jump on his insurance since it is a 152.

 

[dell30rb]

Ha, I was kinda thinking the same thing when I wrote that.

 

[Fearless Tower]

Did someone just stir up the 'I Can Make Money with an Airplane Fairy'?