Real Cost of Ownership: The Affordable Plane

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Apache123

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Hey, Steve!
Based on some of the feedback I received and posts I saw, I decided to take a step down to one of the most affordable to purchase and fly aircrafts out there for analysis.

There are plenty of Piper Cubs and the like which are cheaper to operate, but thanks to being categorized as light sport: their purchase prices have gone through the roof.

There are many amateur-built/experimentals, but I stuck with the certified group as I suspect that'd be a more probable candidate for new student pilots and grumpy old salts alike.


http://realcostofownership.blogspot.com/2013/08/the-affordable-plane.html
 
Are you recommending the purchase of a 150 based on the expectation of $8.50/hr engine reserves being adequate to fund the next required O/H or other big expense? Will this reserve be the same without respect to the accumulated hours in service already used?

Apache123 said:
Based on some of the feedback I received and posts I saw, I decided to take a step down to one of the most affordable to purchase and fly aircrafts out there for analysis.

There are plenty of Piper Cubs and the like which are cheaper to operate, but thanks to being categorized as light sport: their purchase prices have gone through the roof.

There are many amateur-built/experimentals, but I stuck with the certified group as I suspect that'd be a more probable candidate for new student pilots and grumpy old salts alike.


http://realcostofownership.blogspot.com/2013/08/the-affordable-plane.html
Click to expand...
 
Aren't pretty much all the older two seat trainers in the same acquisition and operating cost ballparks?
 
wabower said:
Are you recommending the purchase of a 150 based on the expectation of $8.50/hr engine reserves being adequate to fund the next required O/H or other big expense? Will this reserve be the same without respect to the accumulated hours in service already used?
Click to expand...

The $8.50/hr is for the next required O/H. Those engines can last forever on the bottom. There's accounting for some cylinder, mag, gen, and pump OHs further down the article.

With a proper pre-buy and not the world's worst luck, I'd consider it realistic, no?
 
Steve your assumptions would put me off from the git go. First your selection of a 2 seater is unrealistic with 40% of the population being over weight and then if they wanted to take fuel and a pax the 340 lbs of a 150 are not very user friendly even as a trainer let alone a plane you might want to own after getting trained.

Then your projected costs seem way too high. I do not think it cost that much to keep a 4 seat Cherokee.
 
Or get a C140 and have twice the fun of a 150. I'm going to fly a 150 next week. Been over 10 years since I've been in one but I have lots of current 140 time. The one I'm going to fly is probably going to be for sale. I think it's a 66 and it's a sweetheart with polished fuselage. Be around $20,000 or so I don't exactly know. Good cheap flying. Don
 
I'd want something nicer, faster, and more capable than a 150/152 if I was going to step up from renting. And yeah, I'd be willing to pay more than $20k to do so. Buzzing around at 95 knots gets a little old. If all you wanted to do was pattern work and some local sightseeing, a rental can accomplish that with less financial risk.
 
If I buy a 150 with 1200 hours on the engine how much money will I have in the reserve account when the next overhaul or major expense must be paid? Where does that money come from? Where is it accounted for in your budget?

Apache123 said:
The $8.50/hr is for the next required O/H. Those engines can last forever on the bottom. There's accounting for some cylinder, mag, gen, and pump OHs further down the article.

With a proper pre-buy and not the world's worst luck, I'd consider it realistic, no?
Click to expand...
 
Guys, I think you're missing the point of this blog post. Does a 150/152 have limitations? Of course it does! Is there a plane that you can buy and fly cheaper on the market right now? I doubt it.

A 150/152 is not a cross country machine, and everyone who is even remotely serious about buying a plane knows that, and they also know the weight limitations of the platform and they know if their ass will fit in the chair.

I see two scenarios here:

A person buys a 150/152 and does 75% of their flying in it, and rents a 172 for the other 25%. This person is happy because they get to enjoy all the benefits of buying, and they have a plane that meets their mission (described in the blog post as pattern/local flying, with the occasional burger run). Do they eventually want to step up? Of course. But they have their own plane while they work on stepping up.

Or...

A person buys nothing until they can afford the higher entry cost of the 172/PA-28. They rent the whole time they are "saving" money for their eventual purchase. As long as their mission is as described they're behind in this scenario, because they are renting more plane than they need and they don't have the flexibility of ownership.

Yes, for many pilots, the 150/152 will not meet their needs. But for the pilot described in the original post, it will meet their number one mission: get in to the air in an owned aircraft as cheaply as possible. Everything else is just balancing the three points of the triangle: cheap, good, fast.
 
Figure $50/hr to operate a 152 about 150 hours per year. Not including the hangar and insurance.
 
And you're missing the point that the potential risks of ownership are far greater than those listed in the blog, and are unpredictable as to timing and amount.

The books are full of the sad story about guy who bought a plane based on some estimated budget (usually prepared by somebody who didn't fully understand the game or who had a dog in the fight) only to find that the expenses were much greater and he had no immediate source of funds to resolve the problem.

Any time an owner starts thinking his flying will cost less by owning rather than renting, he's asking for trouble.


livitup said:
Guys, I think you're missing the point of this blog post. Does a 150/152 have limitations? Of course it does! Is there a plane that you can buy and fly cheaper on the market right now? I doubt it.

A 150/152 is not a cross country machine, and everyone who is even remotely serious about buying a plane knows that, and they also know the weight limitations of the platform and they know if their ass will fit in the chair.

I see two scenarios here:

A person buys a 150/152 and does 75% of their flying in it, and rents a 172 for the other 25%. This person is happy because they get to enjoy all the benefits of buying, and they have a plane that meets their mission (described in the blog post as pattern/local flying, with the occasional burger run). Do they eventually want to step up? Of course. But they have their own plane while they work on stepping up.

Or...

A person buys nothing until they can afford the higher entry cost of the 172/PA-28. They rent the whole time they are "saving" money for their eventual purchase. As long as their mission is as described they're behind in this scenario, because they are renting more plane than they need and they don't have the flexibility of ownership.

Yes, for many pilots, the 150/152 will not meet their needs. But for the pilot described in the original post, it will meet their number one mission: get in to the air in an owned aircraft as cheaply as possible. Everything else is just balancing the three points of the triangle: cheap, good, fast.
Click to expand...
 
wabower said:
And you're missing the point that the potential risks of ownership are far greater than those listed in the blog, and are unpredictable as to timing and amount.

...

Any time an owner starts thinking his flying will cost less by owning rather than renting, he's asking for trouble.
Click to expand...

I'm not missing that point, and neither is Steve in the blog post:

Steve's Blog said:
So if we compare this to renting: Nope! Not gonna do that! If you want to own to make it cheaper than renting, you're gonna have a bad time.
Click to expand...

This post is for a specific category of person, a person who:
1)Knows that renting is cheaper than owning, but is willing to pay for the benefits of ownership.
2)Despite being willing to pay for the benefits of ownership, is on a very limited budget and needs to fly the aircraft with the lowest ownership and operational costs.
3)Has a specific mission that a 150 will fulfill.

It's a simple question, really... would you rather rent a 172, or own a 150? We all know there is a ownership cost curve - the more you fly, the better ownership looks compared to rental. All Steve is saying is that he's picking a plane that makes that crossover point pretty far down the graph. People have said "Gee, I wish I could afford to buy a plane, but my tips at Dominos aren't enough." Steve is saying "there are much more affordable ways to get into ownership than the way I am taking."

He has never said "Ownership is cheaper than renting". What he has done is break down the costs of ownership for one of the cheapest planes out there to operate, and said "Look, if you can afford $336/month plus 45.50/hour wet, then you can afford a plane." Will it be the plane of your dreams, NO! Will it be cheaper than renting, almost certainly NO! Are the plane's capabilities limited at this price point? OF COURSE!

"I understand the costs and risks of ownership, and I am willing to assume those, but I can't afford a Mooney, but I'm not stuck renting, I can get into ownership cheaper than I thought" is a very different statement than "Owning is cheap" or "Owning is cheaper than renting". Steve is making the first, and being very clear that #2 and #3 are false.
 
I don't own one but I imagine if you needed a little more useful load you could probably go with a Piper Colt for similar costs. The only issue there is the fabric as opposed to metal and how and where you might choose to store it.
 
It's all in how you buy I think.

A local A/P I know was preparing to tell one of his customers that the "steal of a deal" Ercoupe that the customer only paid $20K for was going to cost him almost that just to get it airworthy. The good news is, he's probably in line for those very reasonable annuals after all the work is complete. The bad news is that didn't include a complete overhaul, which could be lurking. I'm leaning experimental myself, just to avoid the albatross of expense, but ownership just to futz around in my case, is seeming less and less like a cost effective option.
 
So how would the equation be presented to meet the full, fair and plain disclosure requirements that are common in other big-ticket purchases?

livitup said:
I'm not missing that point, and neither is Steve in the blog post:



This post is for a specific category of person, a person who:
1)Knows that renting is cheaper than owning, but is willing to pay for the benefits of ownership.
2)Despite being willing to pay for the benefits of ownership, is on a very limited budget and needs to fly the aircraft with the lowest ownership and operational costs.
3)Has a specific mission that a 150 will fulfill.

It's a simple question, really... would you rather rent a 172, or own a 150? We all know there is a ownership cost curve - the more you fly, the better ownership looks compared to rental. All Steve is saying is that he's picking a plane that makes that crossover point pretty far down the graph. People have said "Gee, I wish I could afford to buy a plane, but my tips at Dominos aren't enough." Steve is saying "there are much more affordable ways to get into ownership than the way I am taking."

He has never said "Ownership is cheaper than renting". What he has done is break down the costs of ownership for one of the cheapest planes out there to operate, and said "Look, if you can afford $336/month plus 45.50/hour wet, then you can afford a plane." Will it be the plane of your dreams, NO! Will it be cheaper than renting, almost certainly NO! Are the plane's capabilities limited at this price point? OF COURSE!

"I understand the costs and risks of ownership, and I am willing to assume those, but I can't afford a Mooney, but I'm not stuck renting, I can get into ownership cheaper than I thought" is a very different statement than "Owning is cheap" or "Owning is cheaper than renting". Steve is making the first, and being very clear that #2 and #3 are false.
Click to expand...
 
Bill Jennings said:
Nice blog, but I prefer the "ostrich" method of cost accounting, I sleep better that way. :dunno:
Click to expand...

That is my preferred method as well, as long as I can afford it, it's better not to add up the totals at the bottom of the page.:D
 
wabower said:
If I buy a 150 with 1200 hours on the engine how much money will I have in the reserve account when the next overhaul or major expense must be paid? Where does that money come from? Where is it accounted for in your budget?
Click to expand...
Wayne, i used to poo poo this reserve account nonsense but people on the blue and red boards have converted me. I've created a reserve accound in my head where I imagine some money going into the kitty to save for an engine overhaul on the pawnee every time I use it. After all, 12 years or 2000 hours is not that long and i wouldn't want to get underwater on it. However, since the engine is now 25+ years and 3800ish hours without anything more than mag inspections and changing one cylinder, I have so much money saved in my head that I think I can retire any day now.
 
The more I read, the more I think a medium-sized club type situation with a couple of planes is the way to go...
 
I don't use them either, nor recommend them for single-owner situations where the owner can comfortably write whatever check is necessary to fix whatever Murphy breaks or tears up. But it's like many other "want to have" items in that if you have to ask . . .

Anybody who works these puzzles over time finally comes to understand that:

1. Most of the costs can be quantified within a few dollars.
2. MX costs and fuel prices are wild cards that defy the normal quantification process and must be measured in a best-case/worst-case scenario in which the worst-case costs are manageable. The problem with many (and IMO, most) projections is that the "most likely" case as seen by the guy who prepared the spread sheet is shown as a hard number and the "oopsie" factor is discussed in foot-note-like fashion.

I'm probably more sensitive to this problem than some others, since I'm one of the guys they call for help in extracting their tender parts from the trap they set for themselves.

JHW said:
Wayne, i used to poo poo this reserve account nonsense but people on the blue and red boards have converted me. I've created a reserve accound in my head where I imagine some money going into the kitty to save for an engine overhaul on the pawnee every time I use it. After all, 12 years or 2000 hours is not that long and i wouldn't want to get underwater on it. However, since the engine is now 25+ years and 3800ish hours without anything more than mag inspections and changing one cylinder, I have so much money saved in my head that I think I can retire any day now.
Click to expand...
 
wabower said:
I don't use them either, nor recommend them for single-owner situations where the owner can comfortably write whatever check is necessary to fix whatever Murphy breaks or tears up. But it's like many other "want to have" items in that if you have to ask . . .

Anybody who works these puzzles over time finally comes to understand that:

1. Most of the costs can be quantified within a few dollars.
2. MX costs and fuel prices are wild cards that defy the normal quantification process and must be measured in a best-case/worst-case scenario in which the worst-case costs are manageable. The problem with many (and IMO, most) projections is that the "most likely" case as seen by the guy who prepared the spread sheet is shown as a hard number and the "oopsie" factor is discussed in foot-note-like fashion.

I'm probably more sensitive to this problem than some others, since I'm one of the guys they call for help in extracting their tender parts from the trap they set for themselves.
Click to expand...
Wayne, you don't know this but you have an african twin brother. When I read your posts I hear privett's voice in my head.
 
I hope to meet him some day. I think we'd have some fun. And you need to be there to stir the pot. :wink2:

JHW said:
Wayne, you don't know this but you have an african twin brother. When I read your posts I hear privett's voice in my head.
Click to expand...
 
JHW said:
i used to poo poo this reserve account nonsense but people on the blue and red boards have converted me. I've created a reserve account in my head where I imagine some money going into the kitty to save for an engine overhaul on the pawnee every time I use it.
Click to expand...

One little more tangible way for the rebuild budget, while still being imaginary money (until you need it) is to keep some of those 0% balance transfer offers from credit cards around.

Of course, the problem with engine reserves is the engine might not cooperate. You could need a new engine 100 hours from now... or like yours still be going strong 3800 hours later.

I'm not a fan of credit cards but this might be something I'd use one for (with 0% balance transfer for the year). The engine I could pay off in cash over the year.
 
wabower said:
I hope to meet him some day. I think we'd have some fun. And you need to be there to stir the pot. :wink2:
Click to expand...

Make sure to invite me. I'll pay admission to that show.
 
Since the 310 is owned by a non-profit that I expect to pay its bills, we do keep a reserve. It does a good job of handling the predicted expenses.

Of course, it is foolish of me to expect an airplane to work for a living. So then the backup to the reserves is the Bank of Ted.
 
Which is exactly the reason you don't bet on the engine vs the panel when considering an airplane. But everybody already knows that.



Jeff K said:
One little more tangible way for the rebuild budget, while still being imaginary money (until you need it) is to keep some of those 0% balance transfer offers from credit cards around.

Of course, the problem with engine reserves is the engine might not cooperate. You could need a new engine 100 hours from now... or like yours still be going strong 3800 hours later.

I'm not a fan of credit cards but this might be something I'd use one for (with 0% balance transfer for the year). The engine I could pay off in cash over the year.
Click to expand...
 
Being a simpleton I have an even easier way of looking at it. I can still use the plane indefinitely with any of the radios not working, but if there is an engine problem the plane becomes an expensive paperweight until a check is written.
 
Tony_Scarpelli said:
... First your selection of a 2 seater is unrealistic with 40% of the population being over weight....
Click to expand...

When it comes to flying my own plane, even with a good payload, I don't take fat people, don't really have any fat friends and I sure as he11 dont date girls over 130lbs.

Affordible planes, Grumman, tomahawk, 150, zenith, 140, 7AC, piper cruiser, tri pacer for more space.

I'd recommend a 2 place based on fuel burn alone. My plane is a true 4 seater and I hardly use/need the rear seats, I cruse about the same as a AA-1A or Lus but burn twice the fuel.

Tony_Scarpelli said:
....Then your projected costs seem way too high. I do not think it cost that much to keep a 4 seat Cherokee.
Click to expand...

I agree, if you run the same type of numbers 90% of people can't afford to operate a car.

On personal planes I just add fuel and change the oil (plane doesn't loose oil), I take care of whatever comes up on annual, which isn't really much. Hangar is under 70 a month on land lease, the annuals run me 500ish a year (keepin the plane away from scammer APs).

My 4 place really doesn't cost me much, the big factor is finding a good old school craftsman AP IA and nipping things in the bud if anything comes up.
 
livitup said:
Guys, I think you're missing the point of this blog post. Does a 150/152 have limitations? Of course it does! Is there a plane that you can buy and fly cheaper on the market right now? I doubt it.
Click to expand...

Sure there are. Would you like to add the adjective "powered" before "plane" before we start listing them? ;)
 
Nice writeup. The 150 I share with another pilot costs the same to operate. I figure $150/mo and about $50/hr to fly. $35 in fuel and we put away $15/hr tach for engine repairs and overhaul.

A similar 152 without a gps and xm weather costs $106/hr w tax to rent. Definitely saving money most months. It is nice not paying to taxi or idle.

If I need to carry a few passengers or it is down for mx, I can rent a da20,172,or 182.
 
"I figure" are arguably among the most-dangerous words insofar as aviation ownership costs are concerned.

Mike5250 said:
Nice writeup. The 150 I share with another pilot costs the same to operate. I figure $150/mo and about $50/hr to fly. $35 in fuel and we put away $15/hr tach for engine repairs and overhaul.

A similar 152 without a gps and xm weather costs $106/hr w tax to rent. Definitely saving money most months. It is nice not paying to taxi or idle.

If I need to carry a few passengers or it is down for mx, I can rent a da20,172,or 182.
Click to expand...
 
From what I see in TAP there is no higher entry cost for a PA28 and often 172's. Just more performance and pride of ownership and capacity.

IMO do not buy a 150 or 152 under any circumstance.

livitup said:
Guys, I think you're missing the point of this blog post. Does a 150/152 have limitations? Of course it does! Is there a plane that you can buy and fly cheaper on the market right now? I doubt it.

A 150/152 is not a cross country machine, and everyone who is even remotely serious about buying a plane knows that, and they also know the weight limitations of the platform and they know if their ass will fit in the chair.

I see two scenarios here:

A person buys a 150/152 and does 75% of their flying in it, and rents a 172 for the other 25%. This person is happy because they get to enjoy all the benefits of buying, and they have a plane that meets their mission (described in the blog post as pattern/local flying, with the occasional burger run). Do they eventually want to step up? Of course. But they have their own plane while they work on stepping up.

Or...

A person buys nothing until they can afford the higher entry cost of the 172/PA-28. They rent the whole time they are "saving" money for their eventual purchase. As long as their mission is as described they're behind in this scenario, because they are renting more plane than they need and they don't have the flexibility of ownership.

Yes, for many pilots, the 150/152 will not meet their needs. But for the pilot described in the original post, it will meet their number one mission: get in to the air in an owned aircraft as cheaply as possible. Everything else is just balancing the three points of the triangle: cheap, good, fast.
Click to expand...
 
wabower said:
"I figure" are arguably among the most-dangerous words insofar as aviation ownership costs are concerned.
Click to expand...

True! I get to those numbers with $109/mo tiedow, $800 insurance, $1500 annual / 2 so my numbers are conservative. I'm sure a lot of people have gone broke thinking that way and buying too much plane.
 
I think you'd go smack-dab nuts trying to slice it fine enough to be sure you were right. Some slack in the money rope is the only sure-fire solution I've found.

Mike5250 said:
True! I get to those numbers with $109/mo tiedow, $800 insurance, $1500 annual / 2 so my numbers are conservative. I'm sure a lot of people have gone broke thinking that way and buying too much plane.
Click to expand...
 
Mike5250 said:
True! I get to those numbers with $109/mo tiedow, $800 insurance, $1500 annual / 2 so my numbers are conservative. I'm sure a lot of people have gone broke thinking that way and buying too much plane.
Click to expand...

Holy chit! $109 TIE DOWN, where is it tied down, down town NY??
 
Most people want more than 20k for their 150 152 I look all the time never see any for 15k none the less best offer at 13 being possible then again depends on engine with 2k since major overhaul maybe
 
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