December 1, 1997 Choosing What Kind of Aircraft to Buy

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by	Mike Busch

About the Author ... Mike Busch is editor-in-chief of AVweb, a member of the technical staff at Cessna Pilots Association, and in a prior lifetime was a contributing editor for The Aviation Consumer and IFR Magazine. A 6,000-hour commercial pilot and CFI with airplane, instrument and multiengine ratings, Mike has been flying for 36 years and an aircraft owner for 33. For the past 14 of those years, he's owned and flown a Cessna T310R turbocharged twin, which he maintains himself. In his never-ending quest to become a true renaissance man of aviation, Mike's on the verge of earning his A&P mechanic certificate. Mike and his wife Jan reside on the central coast of California in a semi-rural area where he can't get DSL or cable TV.

Buying a first airplane is every bit as much of a thrill for most people as buying a first car. Unfortunately, most first-time airplane buyers approach their purchase very much the same way as they do when shopping for an automobile. Typically, they first decide how much they can afford to spend on an airplane — it might be $20,000 or $200,000, depending on their income, obligations and priorities — and then they start scanning Trade-A-Plane looking to find how much airplane that much money will buy.

Such an approach is almost a sure prescription for an unhappy ownership experience, and likely a fast track to the poorhouse. Why? Because there's virtually no correlation whatsoever between the purchase price of an airplane and what it will cost to own.

In today's market, $50,000 will buy anything from a like-new Skyhawk to a middle-aged Skylane to an old-but-sound Bonanza to a runout Aztec to a clapped-out Duke or Queen Air or DC-3, and just about anything in between. The direct operating cost of your $50,000 airplane might be anything from $25/hour to $500/hour. The cost of the first annual inspection might be $500 or $5,000 or $50,000 (or more).

Even if "money is no object" and you can afford to operate your acquisition, your ownership experience might be a real disappointment. You might discover that nobody will sell you insurance, or that the airplane is plagued with mechanical problems and spends all its time in the shop, or that it isn't well-suited to your requirements, or that it just isn't fun to fly.

Define Your Mission

Before you even think about pricing an airplane, you need to think carefully about how you will be using it:

• Will you be using the aircraft mostly for short trips or for long ones? How short or how long? (Hint: most lightplane owners take the airlines when they fly transcontinental distances.)
  

• How many people will you typically be carrying? (Hint: the typical occupancy of light planes is similar to what it is in automobiles: somewhere between one and two people.)
  

• How much cargo will you typically be carrying? (Hint: it's hard to beat the cost of shipping by UPS or FedEx.)
  

• How fast do you need to cruise? (Hint: a turbocharged retractable-gear airplane might cost twice as much to fly as a normally-aspirated fixed-gear one, yet cut only 15 minutes off the typical trip time.)

A Case In Point

A couple whose primary mission is to visit their kids (or their weekend cabin at the lake) needs to make very different choices from a bush pilot who needs to haul hunters and their trophies into and out of gravel strips, or a salesman who needs to visit customers throughout an eight state area in all kinds of weather.

Look at my situation, for example. I fly at least two or three transcontinental trips a year in my airplane. In June, I flew from my California home base to the Cayman Islands and back, with business stopovers in Arizona, Oklahoma, Florida and Kansas. In August, I usually fly to Oshkosh. Every year or two, I visit family in Boston. More than half of my flying hours involve long (over 1,000 NM) trips like this. So the 190-knot cruise speed of my Cessna T310R and its all-weather capability are almost essential to me. (I've flown enough coast-to-coast trips in a 130-knot Cessna 182 to know.)

On the other hand, the six-seat capacity of my airplane is really a waste. I very seldom carry more that two people (myself and my wife, or myself and a colleague). Nor have I found the extra engine to be an essential. (See my article "Do You Really Want A Twin?") To be perfectly honest, if I were buying an airplane today, knowing what I know now, it would probably be a fast, four-place turbocharged single instead of a fast, six-place turbocharged twin, and my cost of flying would be half of what it is now.

So why don't I sell the twin and buy a single? (Deep sigh.) Well, you see, I've owned '38X for more than a decade now, and I know its systems so thoroughly that I can do all my own maintenance, and it was on the cover of AOPA PILOT in 1995, and I really do love that airplane, and...what?…oh!…and I decline to answer further on advice of counsel.

I'm embarrassed to say that his is a perfect illustration of why it makes a lot more sense to buy the airplane you need rather than the one you want. It's also an excellent illustration of the well-known aeronautical principle "do as I say, not as I do."

Figuring Your Costs

One of the most useful exercises you can perform before starting to shop for an airplane is to do a detailed analysis of what the airplane is likely to cost you to own. To do this, you need first to calculate the hourly direct operating costs such as fuel, oil, 50- and 100-hour inspections. Here are some sample figures I worked up for three different airplanes:

Direct Hourly Costs
	Fixed-gear single	Retractable single	Light twin
Fuel @ $2.00/gal	$26	$32	$60
Oil @ $4.00/qt	1	1	2
Scheduled 50-hour maintenance	4	6	10
Unscheduled maintenance	4	6	10
Total direct hourly costs:	$35	$45	$82

You'll also have to figure the hourly indirect operating costs such as reserves for engine overhaul, based on the anticipated cost of overhaul and the published engine TBO. Even if you don't plan on owning your airplane long enough to have to overhaul the engine, you need to figure this cost because the resale value of your airplane directly reflects hours on the engine. (This is aviation's answer to the "depletion allowance.") For example:

Indirect Hourly Costs
	Fixed-gear single	Retractable single	Light twin
Engine overhaul	$10	$14	$28
Miscellaneous engine maintenance	3	4	7
Vacuum pumps	1	1	3
Total indirect hourly costs:	$14	$19	$38
Total hourly costs (direct+indirect):	$49	$64	$120

In addition, you'll have to come up with estimates for all the fixed yearly costs associated with aircraft ownership: annual inspection, insurance, taxes, hangar rent, reserves for prop overhaul, paint and interior, and recurrent training. You'll discover that fixed costs are a major (often dominant) part of the cost of airplane ownership. For example, a light twin like mine may cost more than $20,000 a year to own even if you never take it out of the hangar! Take a look:

Annual Fixed Costs
	Fixed-gear single	Retractable single	Light twin
Annual inspection	$2,000	$3,000	$6,000
Insurance	1,500	2,000	3,000
Propeller overhaul @ 5 years	300	500	1,600
Paint and interior @ 5 years	1,600	2,000	2,400
Avionics maintenance, gyro OH	800	1,000	1,200
Hangar	1,800	1,800	3,000
Recurrent training	1,000	2,000	5,000
Total annual fixed costs:	$9,000	$12,300	$22,200

If you're financing the purchase of your airplane, you should include interest expense in the annual fixed cost calculation. If you're buying a new or very late model airplane, you should also include depreciation...but for most used aircraft in today's market, you can probably ignore this because the aircraft will probably hold its value and might even appreciate over time.

Finally, you need to estimate how many hours per year you will be flying the airplane. Warning: most new owners overestimate here. The average owner-flown airplane is used between 50 and 100 hours a year, and only a tiny percentage of owners fly as much as 300 hours a year.

To come up with a total hourly operating cost, divide the annual fixed costs by your estimated number of flying hours per year, then add the result to the hourly direct and indirect costs you calculated earlier:

Total Cost/Hour
	Fixed-gear single	Retractable single	Light twin
at 100 hours/year	$139	$187	$342
at 200 hours/year	94	126	231
at 300 hours/year	79	105	194

Many experienced aircraft owners report that it's a good idea to keep these calculations in a safe place where your spouse or significant other will not see them.

Can You Get Insurance?

Okay, so you've narrowed down the field to aircraft that meet your needs and aircraft that you can afford. But wait! You're not ready to start telephoning on Trade-A-Plane ads quite yet. There's still some more important homework to be done.

For one thing, you need to research the insurance situation. Call an aircraft insurance broker (or three), tell them what you're looking to buy, describe your aviation experience, specify what kind of coverage you need (both hull insurance and liability coverage), and find out (1) if you can even get insurance, and (2) what it's likely to cost.

It's not hard to get an unpleasant surprise here. I remember when I first bought '38X ten years ago. I'd owned aircraft for the past 15 years, had 4,000 accident-free flying hours, Commercial ticket, CFIA, CFII, and had never had an insurance claim, much less an accident. It never dawned on me that I'd have trouble getting insurance.

But I had only 20 hours of multi-time, having just gotten my MEL rating. "We can't insure you to fly your airplane solo until you have 50 hours in type," I was told. Even then, my first year hull-insurance premium quote was totally outrageous (close to 10% of the hull value). After discussing the situation at length with my broker, I decided to self-insure against flight risks for the first year (something I was permitted to do only because I'd paid for the airplane in cash…no lending institution would approve this), and I was able to get my premiums down to something I could afford. By renewal time, I had well over 100-hours in type and could obtain all-risks coverage at reasonable cost.

A good friend of mine who had nearly 20,000 hours after retiring from a career as an Alaskan bush pilot ran into a similar situation when he tried getting insurance on his Bonanza. The underwriters said he didn't have enough retractable-gear time! He finally persuaded them to insure his airplane after he went through an expensive training program at FlightSafety International.

The Fine Art of Lemon-Avoidance

You'd also be wise to research the "pedigree" of the particular aircraft models that interest you. Some models and model-years have a reputation for being problem children, while others are usually a real pleasure to own. For example, in the Cessna fleet, the Skylane has a reputation as a "bulletproof" airplane, while the Pressurized Skymaster is probably the most problem-plagued and maintenance-intensive airplane that Cessna ever built. Among Beechcraft, the Duke and P-Barons have a bad reputation, while Bonanzas and King Airs have good ones. And so forth.

An excellent way to learn about the reputation of the particular model that interests you is to contact the owner association for that type. Two of the largest are the Cessna Pilots Association and the American Bonanza Society, but there are dozens of other type clubs (many specialized to a particular model). You can often obtain buyer's guides, model histories, and other invaluable information from these associations.

If you're a first-time buyer, you'd be well advised to focus on a relatively simple aircraft and stick with models and model-years that have a sterling reputation by all accounts. As a new aircraft owner, you have a daunting learning curve ahead of you...so make sure you can afford the tuition. Wait until you have a few years of aircraft ownership under your belt before you look at more complex and high-strung machines. A high-performance single is almost never a good choice for a first-time buyer, and a twin is usually a total disaster.

Watch Out For Older Airplanes

Inexperienced buyers should be especially wary of older airplanes, particularly older complex airplanes. You'll often see these advertised for sale at enticingly low prices. There's a good reason for this: an older airplane can easily turn into a money pit.

You may figure that if the selling price is cheap enough, you can afford to spend the money to refurbish that older airplane into something really nice. Take an old, clapped-out 1960-model Cessna 210, for example, that you see in Trade-A-Plane for only $30,000. Add $15,000 for a zero-time engine, $10,000 for new paint and interior, and maybe another $5,000 to replace those old tube radios with a modern comm and GPS. So for $60,000 you'll wind up with a first-class speed merchant, right?

But unfortunately, your "better than new" refurbished airplane won't be worth anything close to the $60,000 you have invested in it. It might appraise at $40,000 at best, so you'll be in a world of hurt if you have to sell it. (See Bill Hemmel's article "What's It Really Worth".) It's generally wise to avoid aircraft purchases that involve spending substantially more than fair market value for the aircraft.

What's worse, 1960 was the first year that Cessna produced the 210, and that year turned out to be one of those "lemons" that you might want to avoid: the aircraft is saddled with expensive Airworthiness Directives and maintenance problems. (Cessna learned a lot from building that aircraft, and later models of the 210 are outstanding airplanes.)

If you're an experienced 210 buff with an A&P certificate, this might make an excellent project airplane. The rest of us would probably do a lot better spending that $60,000 on a pristine '70s-vintage Skylane.