"if you cant pay cash for a plane you have no buisiness owning one"

I don't like the whole "Never say never" decree of the OP's quotation - but in my world my airplane is a toy and I'm paying cash for it as I build it (RV9A). I personally have a long-standing refusal to borrow money for what I consider to be a "toy" (boat, airplane, vacations, etc). If I want the "toy" bad enough I'll find a way to pay for it. If I can't find a way to pay for it then I either don't want it badly enough or don't need it.

Having said that, I fully recognize that for many people the airplane is not a toy but rather a necessary travelling machine for some type of business - which puts it in a whole 'nuther category. For me, it's just a toy.

The last thing I want to do is be in the position of trying to make a loan payment for a toy if the job situation turns south. I can always sell it if I want to, but I don't want the bank calling me for money.
 
Tim: I have financed airplanes a couple of times. I could have drawn down my retirement, but did not want to do that. I could have saved a few (or a lot of) years and paid cash, but then I would not have had the airplane at my disposal during that time. Not flying while I built or saved was (and isn't) an option for me. I tried this and spent a lot of money renting. For me, the pleasure/renewal I get from flying is worth the cost of money at my bank. It is all in what a person wants. Having been around a few years, I realize that life isn't a practice run -- you only get one turn. I am enjoying mine.

That being said, if you do buy, don't stretch yourself buying too much airplane. Be realistic.
 
While I'm a proponent for paying cash when you can, I'm not averse to someone taking a loan for toys. You only live once and should enjoy life as much as you can. A lot of people enjoy watching their bank accounts swell through the years. I was like that at one time and had trouble parting with $ for fun.

I'm not saying spend with reckless abandon, but while saving for retirement I've got no problem borrowing to finance an aircraft. If someone is interested primarily in saving $ then they're probably not flying recreationally anyway so it's a moot point. Interest rates have never been lower than now, and there are more terrific aircraft available at awesome prices. A few years ago I was looking everywhere within 50 miles of here for someone to partner on an SR-20 with, and that surely would have been financed. So you make a payment of a few hundred a month and get to fly your tail off....for a lot of people it seems like a fair tradeoff.

Cars are a different story. A while back a lady crossed the center line and totalled my Explorer. I went to the dealership to look at new ones....no way am I paying $45K for a new vehicle. For me, I just need a decent-looking vehicle to get to work. it's in the aircraft where I want to feel good.
 
Dave Siciliano said:
I also made a promise to myself that I wouldn't put more in an airplane than my house was worth.

Best,

Dave
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:rofl:

My plane predates my house.

Not saying it was smart but...

Now FWIW they currently are probably close in value with the house winning out slightly.

Paid more for the plane though, damn airplane market:mad2:
 
John Baker said:
I paid cash for my airplane, but only because I had had a windfall of enough money to do it. That was during the good times, so it didn't seem like a big deal.

Even without any payments, with the slight economic downturn the private sector has been experiencing the last few years, it has become a real financial burden having an airplane. Every annual is several thousand dollars or more, then the little things that keep popping up that need fixing, plus gas and oil, it ain't cheap.

Selling it isn't so easy either. Unless you are sure of your income, think twice about going into debt for anything, even a car.

John
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Bad deal when you can't afford to sell it or keep it! Sorry, I know several folks with businesses like that now: they can't get out and are losing money running them. Not a good deal.

Best,

Dave
 
Ted DuPuis said:
Oh, I was more referring to the fact that your engines had been going past TBO in record numbers so happily. I was cheering you on to get to 3000 SMOH. :)

We're at 250 past TBO on the 310's IO-520s right now, also happily. I suspect sometime next year we'll get them overhauled. If we can secure the funding, an upgrade to 550s would be good. We already have the props for the 550 conversion.
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We're just over 2,600 hours on a 1,600 TBO. Two pistons had low compressions on our last annual in July. Rather than replace, we used reconditioned since we're on schedule for the Jan. reman.

What's happening is a lot of stuff is just showing it's age under the cowling. With all the systems we have, at some point, it's just worth redoing everything in front of the fire wall to increase dispatchability. We have some oil leaks, and have been replacing some things that down the plane. The actual engines and systems are 15 years old or so now, it's time. It's been a wonderful bird; we're very happy with it. Time to give her new engines and systems <g>. We're completely side funded the reman; so, it's just a matter of timing.

Best,

Dave
 
Fearless Tower said:
That is a good promise....on the other hand, I've always had this dream of owning a 'house plane'.....often fantasize about buying a DC-4/6, parking it somewhere and living out of it......it would be great....I could park the cars under the wings....even have sheltered parking for the 170!

Unfortunately, my wife isn't as keen on the idea....
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Of course you know what you've done now don't you? You've opened up a loophole for me. :yikes:. Might have to start looking into King Airs I can sleep in <g>

Best,

Dave
 
Fearless Tower said:
That is a good promise....on the other hand, I've always had this dream of owning a 'house plane'.....often fantasize about buying a DC-4/6, parking it somewhere and living out of it......it would be great....I could park the cars under the wings....even have sheltered parking for the 170!

Unfortunately, my wife isn't as keen on the idea....
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Me, I want an Albatros:rofl:
 
Dave Siciliano said:
We're just over 2,600 hours on a 1,600 TBO. Two pistons had low compressions on our last annual in July. Rather than replace, we used reconditioned since we're on schedule for the Jan. reman.
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That's most impressive!

What's happening is a lot of stuff is just showing it's age under the cowling. With all the systems we have, at some point, it's just worth redoing everything in front of the fire wall to increase dispatchability. We have some oil leaks, and have been replacing some things that down the plane. The actual engines and systems are 15 years old or so now, it's time. It's been a wonderful bird; we're very happy with it. Time to give her new engines and systems <g>. We're completely side funded the reman; so, it's just a matter of timing.
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Certainly understood. We're in something of the opposite position - the systems under the cowl aren't showing wear, really they're in very good shape, and we've had good dispatchability with the plane. No oil leaks, etc. Our engines were factory remans put in 15 years ago, and the props were done pretty recently, as well. But, the engine are aging, and I suspect the next 100-hour will show some low cylinders.
 
wabower said:
Isn't two years of living expenses in the bank about the same as the cost of many airplanes? If so, aren't you echoing the philosophy on which the thread was predicated?
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Yeah - I originally typed 6 to 12 months (i.e. meaning as little as $12k to $24k saved; though Feds define poverty level income about $11k/yr for one person - not relevant for someone who would buy to fly) then just before I submitted that post I changed the period to one to two years without revising anything else I wrote. That and the fact that some of what I wrote was better directed toward a "if you don't pay cash..." assertion rather than the "if you can't pay cash..." assertion.

I recall reading a survey (EAA?) result somewhere that indicated the average pilot spends (IIRC) about $10k/yr on flying. I don't own, but based on some estimates I've made, it looks like if renting plus rental insurance plus other non-owning flying expenditures start costing me more than about $12k/yr, then I should considering buying a plane.
 
Ted DuPuis said:
That's most impressive!



Certainly understood. We're in something of the opposite position - the systems under the cowl aren't showing wear, really they're in very good shape, and we've had good dispatchability with the plane. No oil leaks, etc. Our engines were factory remans put in 15 years ago, and the props were done pretty recently, as well. But, the engine are aging, and I suspect the next 100-hour will show some low cylinders.
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Sorry Ted! Over 2100 hours on the plane; don't know where the 2600 came from. Probably near 2200 buy the times we put her in the shop.

Best,

Dave
 
Dave Siciliano said:
Sorry Ted! Over 2100 hours on the plane; don't know where the 2600 came from. Probably near 2200 buy the times we put her in the shop.
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That's still impressive, Dave! :)

Right now I suppose we're about at the 2000 mark on a 1700 TBO. By the time we get our overhauls done, we probably won't be much different than you.
 
pilot_dude said:
Not for paying cash but buying new. Why anyone would buy a new depreciating liability is beyond my comprehension. Same goes with cars. Without looking at research I suspect he could have acquired both aircraft at a sizeable discount if they had a few hundred hours on them. I will acknowledge buying new may be better with current business tax incentives but I have not dug into those incentives as I'm not in the market.
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It can make sense, depending on circumstances. if a taxpayer receives a big chunk of ordinary income in a single year, the bonus depreciation and accompanying relief from tax preferences (available only on new planes) may cause the out-of-pocket cost to be less than if buying used. The added benefits of warranty and the ability to select equipment and appointments can tip the scales in favor of buying a new one.

But if you don't buy into the economic arguments, jumst remember that people buy new airplanes for the same reason a dog licks his butt; because they can.
 
I think availability and rent-counter hassles rather than absolute cost are the driving factors in most cases. Owners who sell their plane and say "I can rent lots of hours with the money from thoe sale and what I'll save in own/op expenses" usually only rent a couple of times before they give up.
Jim Logajan said:
Yeah - I originally typed 6 to 12 months (i.e. meaning as little as $12k to $24k saved; though Feds define poverty level income about $11k/yr for one person - not relevant for someone who would buy to fly) then just before I submitted that post I changed the period to one to two years without revising anything else I wrote. That and the fact that some of what I wrote was better directed toward a "if you don't pay cash..." assertion rather than the "if you can't pay cash..." assertion.

I recall reading a survey (EAA?) result somewhere that indicated the average pilot spends (IIRC) about $10k/yr on flying. I don't own, but based on some estimates I've made, it looks like if renting plus rental insurance plus other non-owning flying expenditures start costing me more than about $12k/yr, then I should considering buying a plane.
Click to expand...
 
wabower said:
I think availability and rent-counter hassles rather than absolute cost are the driving factors in most cases. Owners who sell their plane and say "I can rent lots of hours with the money from thoe sale and what I'll save in own/op expenses" usually only rent a couple of times before they give up.
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+1

I can rent a lot for what I would pay for a plane. But, even with my FBO being relatively flexible (early morning pickup, late drop-off), there's policy hassles. I can't drop the plane off and put it in the hanger...... because I might hanger rash another plane. But if the weather might be crappy at night, I can't drop it off and tie it down outside.

I can rent the plane for multiple days, but the FBO wants at least 4 hours / day. A morning trip to a local fly-in or breakfast run is always ended by...... "I need to get the plane back for the next renter". A x-country flight (almost all flights I do) requires me to file a flight plan with the FBO before I leave. (Early morning pickup, means a stop the night before.) Night VFR is almost impossible to schedule.

Then there's the, "If I break it"..... I have to pay the deductible on the insurance. $1000..... ok not bad right. Well, the insurance only protects the FBO, and it can come after me for any damage or claims. So I need to cover liability on top of that. Besides that, I have my choice between a C-172 or Arrow. I'd like to fly a taildragger, but that's more than 45min. to the closest one.

And that's assuming a plane is available..... when I can fly......when the weather is acceptable.....and when the FBO is open. There are very few..."Hmmm let's go flying" days for me. Typically planned days, or weeks in advance. :mad2:

To me, the freedom of owning is worth the cost.
 
I won't belabor this, but I had a fella on the Red Board (excuse me for mentioning that) argue with me about using a HELOC (home equity loan) to finance the purchase of a new plane. We went back and forth a bit, me trying to coach, and him fixating on errors. In the end, I asked what he would do if his home went down in value. His response was homes in CALIFORNIA don't go down in value. It was among the last conversations I had on that board.

Markets swing back and forth. People seem to get the most enthusiastic at market tops and the most negative at bottoms. Just balance things and be reasonable. Financing a toy is reasonable if your resources allow in light of having reasonable savings and other resources to meet obligations. But, you are stretching if you can't afford it now and by financing you can make the payments in present circumstances.

Remember, debt is borrowing to get something today you agree to pay for in the future. Most folks would rather pay for things now and not hock their future. Appreciating assets are one thing. Depreciating assets are much more aggressive.

I use debt where it makes sense for me. That's for my home and businesses. I'm to the point where I have the liquidity to pay it all off now, but that's after years of building a business and not being in that position. For many years, I had so much debt in my business, I never could have paid it off if things went bad. It's a real relief to not be in that position now.

Best,

Dave
 
Rotor&Wing said:
Ask yourself a few questions:

1) If the engine has to be overhauled, do I have the cash to have it overhauled?

2) Do I have the cash to purchase a new prop if needed?

3) Do I have the cash for a large unscheduled maintenance event?

4) Do I have the funds to pay for an average annual inspection?

If you can't answer yes to any of these, I suggest you rethink aircraft ownership.
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What he said.
 
Did I miss someone giving the ultimate advice?

If it flies, floats, or ***ks, rent it.
 
flyersfan31 said:
Did I miss someone giving the ultimate advice?

If it flies, floats, or ***ks, rent it.
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Number three is only legal in certain counties in Nevada.

And the Chicken Ranch closed their runway in 2004 if you're planning on trying to mix two of those goals. ;)

:rofl: :popcorn:
 
I financed my Cherokee and for me it was well worth it to have my own plane at my disposal. However, now the only kind of plane I would consider financing (and I'm presently saving up for a big down payment on such) is an experimental... specifically a Vans RV. I can do all the maintenance myself (except for the annual condition inspection) on an RV. I do have a max cap on what I'm willing to spend on the monthly payments however, and that's about what I'd expect to pay if I went out and bought a brand new pickup truck.
 
Anybody look at the price of a new SUV lately....60k plus......me I drive a 2000 Ford pickup........so I can FLY:goofy:
 
Skyhawk4754 said:
Anybody look at the price of a new SUV lately....60k plus.
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Right in the ballpark price range of a nicely equipped used RV-6 :wink2:

I also drive a 10 year old pickup and will keep driving it until it's completely used up. Then I'll buy another old used pickup with cash :thumbsup:
 
Skyhawk4754 said:
Anybody look at the price of a new SUV lately....60k plus......me I drive a 2000 Ford pickup........so I can FLY:goofy:
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This is the part that a lot of people have a hard time getting.

I knew someone who spent more on his new car than I spent on my Aztec, then made the comment to me "Gee, what bank did you rob to get that thing?" I was quick to point out that it must've been smaller than the bank he robbed for his new car.
 
Dave Siciliano said:
As an aside, I looked at TBMs a couple years ago. A new one was about 3.5 million. folks said they held their value very well. Today, a 1996 850 can be purchased for under $2 million. It takes me too long to make 1.5 million to have an airplane decline in value that much for me <g>. I also made a promise to myself that I wouldn't put more in an airplane than my house was worth.
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Dave: here you go. Problem solved. Enjoy the TBM, buddy.
 
Where's Kent with his usual, "You can live in an airplane, but you can't fly a house!" comment?

That marching band business is keeping him way too busy and away from PoA.
 
denverpilot said:
Where's Kent with his usual, "You can live in an airplane, but you can't fly a house!" comment?
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While I've slept in a Navajo before, I wouldn't want to live in one!
 
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