First Year Cost of Ownership: C182

Tom-D said:
What do you think of any A&P-IA that will inspect your aircraft, allow you to service the aircraft, and hand you a list of discrepancies for $350.00 and sign the log as annual completed? Airworthy/un-airworthy is dependent upon aircraft condition.
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You are saying the IA is doing the full INSPECTION with no owner assist for $350?

What's his normal rate? $25 an hour?
 
Thanks for posting. Don't forget to put some away for a rainy day (as in "it's raining mechanical issues" )
:)
 
Fearless Tower said:
You are saying the IA is doing the full INSPECTION with no owner assist for $350?

What's his normal rate? $25 an hour?
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It sounds like the owner is opening everything up, stripping the interior, etc. servicing brakes, hubs, plugs, oil, filter, lube, etc.

IA walks around with mirror and flashlight, nodding to you when a inspection port can be covered up, he reviews the ADs, signs the logbook, etc. IA barely gets hands dirty but owner saves some cash and becomes intimately familiar with airplane. Other advantage is it's quicker...annual can be done in a day if evryone is hustling.

There are benefits of both full service annuals and owner assisted annuals described above. In some years I've lacked the time and opted for the former, while other years I did the latter.
 
I'm still wondering how engine & prop reserves are imaginary. I guess liberals think most costs are imaginary and don't factor them into a budget.
 
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Kritchlow said:
I'm still wondering how engine & prop reserves are imaginary. I guess liberals think most costs are imaginary and don't factor them into a budget.
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Now that's a rediculous comment. :loco:

I'm still trying to figure out the difference between paying for something before it happens and paying for it when it happens. Why does it matter when when you account for it. It's simply a matter of preference, IMO.

I don't think anyone has argued against reserves, but why should we be interested in what number JoseCuervo assigns as his reserve. His reserves don't mean jack diddly squat to me, nor would mine to you.

Thanks for posting, OP. I've only had my 182 for about 6 months, and barring something wacky, it looks like my numbers for the first year will be similar.

I did an owner assisted annual which allowed me to really get in there and get familiar with the ol' girl. I spent 4 days going through it. Cost me $520. I pay $720/yr for a T-hangar and I run 87 octane from Love's down the street via a 55 gal drum, unless I fill up away from home, of course. So thankful we still have untainted gasoline here.
 
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OkieFlyer said:
Now that's a rediculous comment. :yes:

I'm still trying to figure out the difference between paying for something before it happens and paying for it when it happens. Why does it matter when when you account for it?

I don't think anyone has argued against reserves, but why should we be interested in what number JoseCuervo assigns as his reserve. His reserves don't mean jack diddly squat to me, nor would mine to you.

Thanks for posting, OP. I've only had my 182 for about 6 months, and barring something wacky, it looks like my numbers for the first year will be similar.

I did an owner assisted annual which allowed me to really get in there and get familiar with the ol' girl. I spent 4 days going through it. Cost me $520. I pay $720/yr for a T-hangar and I run 87 octane from Love's down the street via a 55 gal drum, unless I fill up away from home, of course. So thankful we still have untainted gasoline here.
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Because he never figures it... And he does argue against calculating hourly reserves.
 
Kritchlow said:
Because he never figures it... And he does argue against calculating hourly reserves.
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Well, I just found it pretty strange to equate a lack of an engine reserve with liberalism. It's just different strokes for different folks. :)
 
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Jose - you're post inspired me to add up expenses from last year... after about half way down - I decided against it :)
 
Kritchlow said:
Because he never figures it... And he does argue against calculating hourly reserves.
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I have asked numerous times for others to calculate them, and show the math. None have had a formula.

And, once I calculate some imaginary number, what action would I take?

And, what would you do with that imaginary number?
 
Imaginary numbers include any future spending. Since it has not happened, it is imaginary. It is best to not think of these imaginary numbers. And NEVER discuss these imaginary numbers with your significant other.
 
Kritchlow said:
I'm still wondering how engine & prop reserves are imaginary. I guess liberals think most costs are imaginary and don't factor them into a budget.
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THIS WASN"T A BUDGET!!!! It was ACTUAL COST. :mad2: Reserves are accrued amounts for future expenditures. Your actual cost shouldn't include reserves/accruals. The only time it's useful is for GAAP accounting where you are trying to avoid having a large expense/revenue hit all in one fiscal period. It's great for budgeting purposes and understanding the total cost of ownership, but it skews the numbers when looking at an actual log of expenses in a given year.
 
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Kritchlow said:
I'm still wondering how engine & prop reserves are imaginary. I guess liberals think most costs are imaginary and don't factor them into a budget.
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They aren't imaginary, just a lot of variables.

There are some basic formulas to use as a rough guide, but still.....you could buy a low time engine and something bad happens and you need to replace/overhaul it in a year or two - an hourly engine reserve isn't going to help much there.

If you are buying a higher engine time airplane, you should right off the bat, have a reserve established to cover the future OH. If you are buying a low time engine....you should at least have a plan on how you are going to pay for the engine should something bad happen.

The engines on my Baron are around 950 SMOH. I fully expect to overhaul them at least once during my time of owning it and I have the resources to do so, when the time comes.

My Waco has a fresh (40 SMOH) engine. I'll be surprised if I fly that airplane 1500 hrs while owning it, but if something happens, I'm prepared to either pay up or finance if necessary.

I have thought ahead and am prepared to deal with those costs, but I don't choose to factor it into my hourly cost.
 
Ok, for all who think there should be a reserve number calculated, here is a possible situation and the inputs. Please show me the calculation and the reserve number I should use.

$45,000 June 2014 Purchase price
900 hours SMOH at purchase
1500 hour TBO
80 hours flown in first 12 months
$15,000 Tax Credit in April 2015 for Sec 179 expense 33% tax rate
$30,000 residual value in 2022 for at TBO c182 needing overhaul
Planning on selling it in 2022 to upgrade to King Air 90

What is my "imaginary" number I need to keep track of each hour I fly?
 
JoseCuervo said:
What is my "imaginary" number I need to keep track of each hour I fly?
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I don't know but wherever they get it from I hope they wear gloves, and wash their hands before eating anything. :D
 
JoseCuervo said:
Ok, for all who think there should be a reserve number calculated, here is a possible situation and the inputs. Please show me the calculation and the reserve number I should use.

$45,000 June 2014 Purchase price
900 hours SMOH at purchase
1500 hour TBO
80 hours flown in first 12 months
$15,000 Tax Credit in April 2015 for Sec 179 expense 33% tax rate
$30,000 residual value in 2022 for at TBO c182 needing overhaul
Planning on selling it in 2022 to upgrade to King Air 90

What is my "imaginary" number I need to keep track of each hour I fly?
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None, if you don't ever plan on overhauling it. You'll take the "imaginary number" as a hit to the sales price on the aircraft in 2022 and the result will be the gain/loss on the asset.
 
JoseCuervo said:
Ok, for all who think there should be a reserve number calculated, here is a possible situation and the inputs. Please show me the calculation and the reserve number I should use.

$45,000 June 2014 Purchase price
900 hours SMOH at purchase
1500 hour TBO
80 hours flown in first 12 months
$15,000 Tax Credit in April 2015 for Sec 179 expense 33% tax rate
$30,000 residual value in 2022 for at TBO c182 needing overhaul
Planning on selling it in 2022 to upgrade to King Air 90

What is my "imaginary" number I need to keep track of each hour I fly?
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Not "imaginary" at all... It's right there in your own numbers in the form of depreciation based on your predicted 2022 sales price.

What IS imaginary (according to generally accepted accounting principals) is trying to calculate an annual operating cost that excludes a hit for depreciation. That's a made up number because said use of airplane has decreased its value by an amount that needs to be included in this cost of operation.

Key difference people seem to be getting caught up on is that annual cash outlay does not equal annual operating cost. I know that's a strange concept but that's how capital assets work in the real world... and when the books are finally closed what your final costs will really be.
 
SoonerAviator said:
None, if you don't ever plan on overhauling it. You'll take the "imaginary number" as a hit to the sales price on the aircraft in 2022 and the result will be the gain/loss on the asset.
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Exactly. That's how I own my airplane. I fly it, IRAN it as required and never have the intention of overhauling because I don't expect to own it long enough to make use of a full worth of TBO time. I am perfectly happy eating the depreciated value at selling time. That angle has always been a lesser cost than eating the cost of selling it with a fresh OH on my dime.

That's why I don't buy an airplane with a fresh engine, I buy one with mid time, especially if runout by calendar time. Buy low sell low. Not for everybody, but works for me.
 
rocketflyer84 said:
What IS imaginary (according to generally accepted accounting principals) is trying to calculate an annual operating cost that excludes a hit for depreciation. That's a made up number because said use of airplane has decreased its value by an amount that needs to be included in this cost of operation.

Key difference people seem to be getting caught up on is that annual cash outlay does not equal annual operating cost. I know that's a strange concept but that's how capital assets work in the real world... and when the books are finally closed what your final costs will really be.
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Airplanes (particularly non-business operated aircraft) do not behave like many other capital assets.

Most will depreciate/decrease in value, but hardly at the same rate. Some will even increase in value (even as they are flown), but that isn't really something you can count on.

You can assign any number you want to depreciation. It will work for IRS purposes. Doesn't mean it is an accurate reflection of future worth.
 
OkieFlyer said:
Now that's a rediculous comment. :loco:

I'm still trying to figure out the difference between paying for something before it happens and paying for it when it happens. Why does it matter when when you account for it. It's simply a matter of preference, IMO.

I don't think anyone has argued against reserves, but why should we be interested in what number JoseCuervo assigns as his reserve. His reserves don't mean jack diddly squat to me, nor would mine to you.

Thanks for posting, OP. I've only had my 182 for about 6 months, and barring something wacky, it looks like my numbers for the first year will be similar.

I did an owner assisted annual which allowed me to really get in there and get familiar with the ol' girl. I spent 4 days going through it. Cost me $520. I pay $720/yr for a T-hangar and I run 87 octane from Love's down the street via a 55 gal drum, unless I fill up away from home, of course. So thankful we still have untainted gasoline here.
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Bingo.

Also being in a plane right helps, I could sell mine for more than I paid for it right now, also the hours I fly her make me more employable if I ever wanted to fly floats or amphibs somewhere.

Owner assist and mo gas are the way to go.

I'd just stick that unwieldy 55 drum and trade it for 3 or 4 15.5gal stainless ber kegs.
 
Fearless Tower said:
Airplanes (particularly non-business operated aircraft) do not behave like many other capital assets.

Most will depreciate/decrease in value, but hardly at the same rate. Some will even increase in value (even as they are flown), but that isn't really something you can count on.

You can assign any number you want to depreciation. It will work for IRS purposes. Doesn't mean it is an accurate reflection of future worth.
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I believe, if memory serves me correct, my 182 sold new for $13k. Over nearly 50 years it has tripled in value. :dunno:
 
JoseCuervo said:
I believe, if memory serves me correct, my 182 sold new for $13k. Over nearly 50 years it has tripled in value. :dunno:
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I think most vintage airplanes such as ours would sell for much more than new prices at the time. Of course, much more has been spent along the way with annuals, repairs and upgrades.
 
Airplanes are like a lot of nice mechanical watches. Over time they increase in value... but that increase is less than what it costs to maintain them with overhauls every c.5 years.
 
timwinters said:
The last time I was paying for a hangar (I'm now staying for free in a heated hangae...eat your heart out) I was paying $125/mo. Nice new hangar, power door, electric (free) etc.

But then, the downside is it's in Missouri where rebel flags are outnumbered only by jacked up trucks with bull balls hanging off the trailer hitch. It was voted most redneck state in the Union for a reason dontchaknow.
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I think I've driven past there. Is that the airport off 61 with the A-4? That really is in the middle of no where lol
 
rbridges said:
I think most vintage airplanes such as ours would sell for much more than new prices at the time. Of course, much more has been spent along the way with annuals, repairs and upgrades.
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At the same time those values have gone up and come back down.

A 1960s or 70s 182 is not worth today what it was 10 years ago.

Predicting the future value of a used aircraft is a crap shoot in many cases that cannot be accomplished accurately with some accountant's formula.
 
Fearless Tower said:
At the same time those values have gone up and come back down.

A 1960s or 70s 182 is not worth today what it was 10 years ago.

Predicting the future value of a used aircraft is a crap shoot in many cases that cannot be accomplished accurately with some accountant's formula.
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I think, somewhere up above, I mentioned "random luck" and "global events".

They affect things.... hard to quantify.
 
It's always a gamble. Especially if the engine is close to or over 1000 hours. Like Clint Eastwood asked in the movie ......." Feelin lucky?"
 
I never understood why people count engine reserve. People don't calculate the cost of their next car into their per mile calculation, why would would one calculate the cost of their next engine in the hourly cost of a plane?

Thank you OP for your post
 
TheGolfPilot said:
I never understood why people count engine reserve. People don't calculate the cost of their next car into their per mile calculation, why would would one calculate the cost of their next engine in the hourly cost of a plane?

Thank you OP for your post
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I see your point, but I'll play devil's advocate and say that most car engine repairs don't cost 20 grand.

On another note, it's funny how a guy can talk about his first 12 months plane expenses and it turns into a 100+ posts debating its merits. :lol:
 
rbridges said:
I see your point, but I'll play devil's advocate and say that most car engine repairs don't cost 20 grand.



On another note, it's funny how a guy can talk about his first 12 months plane expenses and it turns into a 100+ posts debating its merits. :lol:
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Depends on what you drive. ;) I rebuilt a diesel for something not too significantly shy of that number.

With new ones going for $65,000... Rebuilding made a lot of sense.

That's essentially why most of us fly 35 year old aircraft. No point in buying the exact same thing for $600,000. That's worse than the truck deal. Haha.

As far as the thread getting long goes, that's just normal around these here parts. :)
 
rbridges said:
I see your point, but I'll play devil's advocate and say that most car engine repairs don't cost 20 grand.

On another note, it's funny how a guy can talk about his first 12 months plane expenses and it turns into a 100+ posts debating its merits. :lol:
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Air cooled aircraft engines are much more vunerable to failure than a car engine . Not only are they revved to extreme rpm much more often , they are also much harder to cool correctly for obvious reasons. There is no comparison between replacing, or repairing the average car engine compared to an aircraft engine .
 
JoseCuervo said:
Just went past the anniversary of my purchase of a C182 late last June. I purchased the plane WITHOUT a pre-buy, but did allow the Seller's mechanic (who was brokering it ) to do the annual last June.

$60 Tie Downs (6 months x $10)
$1050 T-Hangar rent (6 months x $175)
$738 Insurance for 12 months ($1mil Liability)
$146 Oil (2 cases Aeroshell W100 x $73) (still have a few bottles not used)
$47 for two Oil Filters
$40 Labor for Oil Change after 50 hours
$13 for tub of GoJo cleaner to clean the belly
$10 for Lemon Pledge and cleaning rags
$837 for Annual inspection and ELT battery, July 2015

$2941 Total non-fuel costs for 80 hours
$37 / hour Dry Costs for Year 1

960 estimated Gallons of fuel 80% MoGas, 20% 100LL. (I think actual is 90/10 for AvGas to MoGas)

$2660 for 768 MoGas gallons at average $3.50??
$1,056 for 192 gallons 100LL at $5.50??? estimate

$47 per hour for gas: ( $3716 fuel / 80 hours)


Operating costs: $84 per hour ($37 dry +$47 fuel)


(Note: Forgot the $85 Annual State registration)
(Note 2: Not going to count my medical, ForeFlight, BFR, etc.... that have nothing to do with ownership of the plane)
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+$16hr engine +$6hr prop reserve +$3hr maintenance reserve. Every hour you operate uses stuff up and causes wear and tear, and funny thing is, it doesn't really change the reserve cost to not fly because sitting, unless properly pickled for storage, costs about as much as operating 50-100hrs a year, just in different ways.
 
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rbridges said:
I see your point, but I'll play devil's advocate and say that most car engine repairs don't cost 20 grand.

On another note, it's funny how a guy can talk about his first 12 months plane expenses and it turns into a 100+ posts debating its merits. :lol:
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20k every 10-20 years is cheap compared to what people spend buying a new car every 3 years. Buy a car at 40, sell it 3 years later a 25. Do that 4 times in 12 years that is 60k. Meanwhile the plane you replace the interior for 10, paint for 10, 10 in avionics, and 30 for a new engine. Same 60k.

My point is, people don't count the replacement loss/cost of cars into their cost per mile, but they do it religiously with planes.

It is funny how many posts ended up on this thread:D
 
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TheGolfPilot said:
My point is, people don't count the replacement loss/cost of cars into their cost per mile, but they do it religiously with planes.

It is funny how many posts ended up on this thread:D
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Because realistically people don't treat their car and plane as the same type of transportation commodity. They also don't hold them to the same standard. Don't know why... it's almost as if the car is a necessary evil and the plane is a toy. Actually, that's exactly how I think about them, but I love my truck too!
 
Henning said:
+$16hr engine +$6hr prop reserve +$3hr maintenance reserve. Every hour you operate uses stuff up and causes wear and tear, and funny thing is, it doesn't really change the reserve cost to not fly because sitting, unless properly pickled for storage, costs about as much as operating 50-100hrs a year, just in different ways.
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Is there math behind those numbers, or just "rule of thumb"?

If I have already decided to fly it until TBO and then sell it, is the math different?
 
JoseCuervo said:
Is there math behind those numbers, or just "rule of thumb"?

If I have already decided to fly it until TBO and then sell it, is the math different?
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The math is $$$ to overhaul/TBO. The math does not change as it becomes applied to the resale value nearly perfectly prorated. The only way the formula works out to advantage is buying at "run out" value, fly it free from significant repair costs (there is no return on investment on repairs, only overhaul, and that does not include the R&R labor) and selling for the same run out value xxx hours later.
 
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