How to Save Big on a Used Airplane
By Stephen Pope
If you’re in the market for a used airplane, the good news is there are thousands available for sale on trade-a-plane.com, barnstormers.com and tacked to the bulletin boards at local airports. The bad news is most of them are so old you might wonder whether that “bargain” Piper Warrior or Cessna Skyhawk is really a bargain at all.
Used airplanes aren’t getting any younger, and neither are pilots. In the United States, the private pilot population has been in steady decline for more than 20 years. Compare the numbers alongside overall population growth since 1980 and the drop-off is even starker, with the average age of pilots trending older as fewer young students ever learn to fly in the first place. It’s all having an effect on the used airplane market.
What’s behind this shift? More importantly, is there anything that can be done to stem the decline of general aviation in the United States?
The high cost of flying is certainly one of the main barriers, but money doesn’t tell the whole story. After all, retirees spend billions on vacation homes, recreational vehicles, boats, motorcycles and more before most of them ever consider taking flying lessons and becoming a pilot.
One of the reasons people shy away from aviation is the pitiful state of the training fleet in this country. Prospective students often show up at the local mom-and-pop flight school only to be shown a 50-year-old airplane with chipped paint, a threadbare interior, and antiquated instruments and radios. The majority of these prospective customers think to themselves that maybe flying isn’t for them after all and walk right out the door never to return again.
When I learned to fly, the 40-year-old Piper J-3 Cub I took lessons in looked like a relic because it was. Today, new students who imagine they’ll be strapping in behind the cutting-edge technology they saw in an aviation magazine are too often confronted with the disappointing reality that the Cessna Skyhawks and Piper Cherokees that rolled off the production line when Gerald Ford was president are the only airplanes on the flight line at the local school.
That’s a shame, since the newest airplanes being produced today are technologically sophisticated enough to draw in new pilots. It’s a troubling dilemma as well. Along with the decline in the pilot population, GA aircraft manufacturing has slowed to a trickle. All those many tens of thousands of airplanes built in the 1960s and 1970s keep getting older, but there’s almost nothing in the used airplane inventory to replace them.
Why do new airplanes cost so much? You probably know the answer already or you can probably guess. Product liability lawsuits and their ensuing skyrocketing insurance costs have put a stranglehold on the GA industry that has yet to release its death grip. By some estimates, product liability costs add more than $100,000 to the bottom-line price of a typical new general aviation airplane. At the same time, hangar rents continue to rise, fuel prices are high, and equipment mandates require additional outlays of cash — all while real wages in the United States have remained more or less flat.
The advent of the Light Sport Aircraft category was supposed to be the industry’s savior, but we all know how that turned out. Sure, there are around 60 manufacturers of LSAs across the globe, but only five or so are making much money, and none are building airplanes in huge numbers.
Perhaps the most sobering takeaway from the data is the mere fact that the pilot population in the United States should be exploding right now, as baby boomers finally have enough disposable income to go out and buy the brand-new airplane they’ve always dreamed of owning.
The fact is, not enough people want to own a 1960s-vintage Cessna 182 with steam-gauge six-pack instruments, rough paint and cracked vinyl seats. To draw the masses back into general aviation, we need to change our whole way of thinking.
That’s exactly what the Part 23 rewrite of small-airplane certification rules will aim to do when the FAA finally gets around to adopting them sometime in the goodness-we-hope-not-too-distant future. New airplanes that cost substantially less to purchase should be a winning formula. We’ll see.
Until then, we empathize with your need to maximize your aviation dollars. You might have imagined owning a factory-new airplane — who doesn’t from time to time — but maybe you understand that, unfortunately, the cost of buying, maintaining, hangaring, fueling and insuring your dream ride puts that new airplane smell stubbornly out of reach.
But here’s the dirty little secret to airplane ownership that everybody seems to sort of understand, but nobody wants to admit: There’s really no such thing as a deal on a used airplane. Airplanes cost what they cost. Good ones cost more, and bad ones will end up costing you money in the long run to turn them into good ones, or at least to keep them from becoming bad ones.
If your strategy is to buy the cheapest airplane you can find and fix it up, you might be in for a rude surprise. While that strategy might have worked in the past, the cheapest 40- and 50-year-old airplanes you’ll come across these days are barely airworthy. Be prepared to spend — and spend and spend — to keep them flying.
“The best way to save money on a used airplane is by not saving money,” says Jeff Owen, vice president of piston aircraft sales at Premier Aircraft Sales in Fort Lauderdale, Florida. “It’s not all about spending less at acquisition time. It’s about asking, ‘What is this thing going to cost me from the day I buy it until the day I sell it?’”
In other words, it doesn’t matter what the number on the check you hand over to the seller says, it only matters what that airplane will cost over time for maintenance, hangar, fuel, insurance, upgrades, and all the other minor and not-so-minor expenses that require you to pull out your checkbook yet again.
When you look at the used airplane buying equation from this vantage point, quite often it makes sense to spend a little more to buy an airplane in order to save money down the road, such as on an engine overhaul or avionics upgrade that you don’t need because the previous owner already wrote that check. Keep in mind that sellers will rarely, if ever, recoup their investments in, say, a new coat of paint, a fancy new instrument or a repair. So let them spend the money while you keep more in your pocket.
Obviously, we can’t tell you to avoid one model of airplane or jump at the chance to buy another. A strategy that works is to make a list on a sheet of paper of everything you absolutely must have in an airplane, i.e., four seats, 1,000-pound useful load, 700 nm range, 140-knot cruise speed and so on. At the top of the page, write down the most you’d be willing to pay for that airplane. And then go buy it.
It might sound like a tongue-in-cheek suggestion, but it really is that simple. If you’d prefer, go ahead and make a second column that includes the things you’d like to have but which aren’t necessities (such as a GPS moving-map display, SiriusXM datalink weather, a traffic advisory system and so forth) and assign a dollar value you’d be willing to spend extra to have each of those. If you can find an airplane that ticks the appropriate boxes, your work is done.
You might be realizing already that a strategy that doesn’t work quite as well, at least if your objective is to save money, is to buy a cheap airplane and then pour a ton of money into it to make it perfect. People do it all the time, but they never save a dime.
Still, a number of companies are doing just this by offering “remanufactured” models, such as AOPA’s 152 Reimagined, Yingling’s Ascend Skyhawk and Sporty’s 172 Lite, which aim to take worn-out airplanes, add new paint and interior to go along with overhauled engines and props, and lots of other work, and sell these refurbished airplanes for a profit.
Do these airplanes represent a good value? You can always spend less money buying a refurbished airplane from a private seller or even by doing the work yourself. Even still, that doesn’t mean the remanufactured model is a bad deal. In fact, it might be a steal, considering that a large organization, like AOPA or Sporty’s, has spent a lot of time thinking about the best way to refurbish a Skyhawk and is putting its own name behind the project. It’s yet another example of when spending a little more money up front could net you a better deal in the long run.
Be mindful, however, that you don’t buy more airplane than you need just because you can afford to. If a 1968 Piper Commanche will let you accomplish everything you need to, there’s no reason to go out and buy a 2008 Cirrus. Too many pilots get seduced into buying airplanes they really needn’t be flying.
If, on the other hand, you plan on using your airplane for business, buying new might actually save you money because of the tax breaks you could receive. You’ll want to discuss the details with your tax professional, of course, but you should understand that airplane buyers who can legitimately apply “business use” deductions will save a considerable amount of money on a new airplane — maybe enough to pay for the airplane through the first few years of ownership. Using an aircraft for business will allow you to apply depreciation and pay for use with pretax dollars, among other things.
The market for business aircraft has stabilized since the 2008 economic downturn, but there are still bargains to be found. A turbine-powered airplane will put you in a new category of pilot, but the capabilities a turboprop or light jet can offer can help you maximize your travel efficiency. Just remember that kerosene-burners cost much more to operate and maintain.
If you’ll be financing your aircraft purchase, be sure to shop around for the best terms. Banks tightened their lending requirements after the financial meltdown, but it’s getting easier to obtain a loan if your credit is good and you can put down 20 percent. Terms on aircraft loans generally run 20 years. Keep in mind the rate you’ll receive goes down the more money you plan to spend — but don’t use that fact as an excuse to overspend.
Of course, no article about buying a used airplane would be complete without touching on the pre-buy inspection. Yes, this is a critically important step for any used airplane buyer, but make certain the person doing your pre-buy really is the expert he claims to be. Your best bet is to have a complete annual inspection performed by a mechanic with in-depth knowledge of the airplane you plan on purchasing — even if it came out of annual yesterday. Not only will this give you peace of mind that any discrepancies are uncovered, it will also provide you with added leverage during the negotiation process.
Finally, one of the best ways to save money on an airplane is to consider shared ownership and fractional programs. You might not be able to own your dream Cirrus outright, but through programs, like those offered by Ascension Air and PlaneSmart, you could get into the left seat of an airplane you could never afford on your own. Flying clubs are great options too, with many operating as nonprofit entities to maximize savings for budget-conscious pilots. If you don’t mind sharing your ride, you can cut your flying expenses dramatically.
How to Save on Fuel
By Pia Bergqvist
Depending on how often you fly, fuel can be one of the biggest costs associated with owning an airplane. But there are many ways to bring down this variable cost. By using a few tricks you can reduce your fuel bill by hundreds and possibly thousands of dollars.
The most obvious way to save money on fuel is to buy an airplane that doesn’t burn much. Many Rotax-powered light-sport airplanes burn as little as 3 or 4 gph while yielding almost as much speed as a Cessna Skyhawk that burns anywhere from 7 to 10 gph. Higher-powered airplanes, such as a Cirrus SR22 or Cessna TTx, burn a whole lot more. However, they are also faster. So on longer trips a faster airplane may actually burn less fuel than a slower one, even though it burns more per hour. When purchasing an airplane you need to consider what your mission is. If it is just to have fun, purchase an airplane that doesn’t burn much fuel. If your mission is long trips, you may save at the pump in a faster, more powerful airplane and have the benefit of arriving sooner.
Where you purchase your fuel will also make a big difference on your total fuel bill. While it is not nearly as convenient, you will almost always save money by filling the tanks at a self-serve station. FBOs generally charge anywhere from 50 cents to a dollar more per gallon if they fill you up from a fuel truck. But it is worth asking before you get your hands dirty at the pump. There are times when FBOs charge the same price for self-serve as full-serve.
There can also be a big difference in the price of fuel at different FBOs at the same airport. Do your homework ahead of time so you don’t pull into the more expensive FBO. Another consideration is landing fees. Many FBOs will charge you a landing fee, which can be as much as $100 at some airports. The landing fee is often waived if you purchase fuel.
In many cases it is most economical to land at a smaller airport if you are visiting a large city with Class C or Class B airports. Often the busier airports discourage smaller airplanes from getting in the way of the more lucrative jets, which take on a whole lot more fuel than a single-engine piston airplane, by charging hefty ramp fees or astronomical rates for 100LL.
These days, researching the best airport to land at is much easier than it was before the age of electronics hit the cockpit. If you, like most pilots today, use some type of aviation app for flying, you can use the app to help you save money on fuel costs. Most aviation apps have features that show the fuel prices right on the electronic sectional chart, making it easy to plan your fuel stops based on the price at the pump.
The prices can be dramatically different from one airport to the next, even if they are located nearby. At my home-base airport, Camarillo (CMA), the 100LL fuel price is currently $4.85 per gallon at the self-serve pump. Around the corner at Santa Paula (SZP) the self-serve is only $3.99. But at nearby Van Nuys (VNY), a busy Class D airport that lies beneath a Class C layer of Burbank’s (BUR) airspace, there is no longer an option for self-serve, and you would pay at least $7.31 per gallon from one of the fancy FBO’s fuel trucks. Even if you are only putting 20 gallons in the tank, the difference works out to be significant. And over a year’s time the savings at the lower-priced pumps would add up to hundreds or even thousands of dollars if you fly a lot.
A few words of caution, however: Don’t get caught with insufficient amounts of fuel just to get to the cheapest fuel station. Plenty of pilots have pushed it to try to get to cheaper fuel only to run out on the way. This would be a painful and costly mistake that could not only put you in the hospital but also cost you your airplane and significant increases in insurance premiums down the line — if you survive and are able to fly again. If you are visiting an airport with expensive fuel, you can always put 5 or 10 gallons in the tanks just to give yourself a buffer. Then fill your tanks at the less expensive station.
Also, you may be tempted to make an additional landing to get the cheaper fuel, as in the case of Santa Paula. However, it may cost you more money getting there and back than it would cost to fill up at your home base. You may burn your savings in the ferry flight and put more hours on your airplane, which would also cost more in the long run with oil changes and engine overhauls.
Aside from finding the least expensive fuel, you can save a lot of money not only on your fuel bill but also on the maintenance bill by properly leaning the fuel/air mixture. By burning a mixture that is too rich, you are burning more fuel than you need to, and you could also gum up the spark plugs and valves with the residue. There are many terrific electronic monitoring systems that will allow you to lean the mixture more precisely than simply leaning until the engine starts to run rough, and then adding some to smooth it out. For the optimal fuel burn, lowest fuel cost and maximum engine life, it is worth investing in some type of digital data system or, better yet, an electronic fuel optimizer.
With the increasing costs of 100LL, you may also consider using auto fuel in your airplane. It may not be the most convenient way to save money, as it may be a challenge getting the auto fuel to the airplane, but the price per gallon is likely at least a dollar less. So if you have an easy way of getting auto fuel to the airplane, you could save a lot of money. Some engines, such as the Rotax, already allow for the use of the unleaded lower-octane fuels that cars use. If you are flying behind a 100LL-powered engine that is not approved for auto fuel, chances are you can get a supplemental type certificate to use it.
As you can see, there are many ways to reduce your fuel bill. Use the ones that make sense to you, and you could save enough money to fly several additional hours every year.
How to Reduce Fixed Aircraft Ownership Costs
By Pia Bergqvist
Most pilots, and certainly nonpilots, believe that aircraft ownership is way out of reach financially. But, realistically, the cost can be as low as owning a second car (albeit a nice one) or a boat. With a little ingenuity, you can minimize the bills that are the necessary evil of having access to your own flying machine.
The decision on what type of airplane you own or buy will have a great bearing on what the fixed costs will be. Even a small new airplane can cost as much as or more than most people’s homes, and have similar monthly payments and interest premiums (unless you are lucky enough to afford to buy one outright). However, a good used airplane can be bought for about the same amount of money as a new Toyota Camry.
With the higher value of a new airplane, the insurance cost will also be dramatically higher than that of a used one. And it is not only the value of the airplane that brings up the insurance rate. Some airplanes are more accident prone, which raises the insurance premium as well. The number of seats in the airplane and the amount of available power will affect the insurance premium. And larger, faster airplanes are more expensive to maintain.
A retractable or tailwheel airplane will also cost more to maintain and insure than a fixed-gear airplane. “The simpler the airplane is, the lower the risk,” says Jim Pinegar, vice president of AOPA Insurance Services — Aviation. It is well worth calling your insurance broker before you sign the bill of sale for a new or used airplane so that you won’t get a nasty surprise.
When I did my homework before buying my 1974 Mooney M20C last spring, I was happily surprised at the insurance rate AOPA quoted me. Even though it has retractable gear, the $590 annual premium for my Mooney is less than half the cost of my car insurance. Fortunately, I have no prior incidents or accidents that would affect either premium.
While I enjoy the challenge of flying retractable and tailwheel airplanes, the cost of ownership of these types of airplanes has the potential to get more expensive down the road. Unlike a fixed-tricycle-gear airplane, there is potential for a gear-up landing or a ground loop — incidents that will not only cost you at the time they occur but also increase your insurance premium when you renew. If you know you won’t fly regularly enough to maintain good, solid flying skills, you should consider buying a lower-risk, fixed-gear airplane.
In addition to paying attention to the type of airplane you buy, there are other ways to save money on aircraft insurance. Insurance premiums are all about risk — you pay based on your probability of having a claim. The more you fly without an incident, the lower the premium, particularly if you are building time in the same airplane make and model as the one you would like to insure. “Fly often, fly safe,” says Pinegar.
It also helps to shop around for the best insurance quote, but only to an extent. All the major insurance brokers shop the same underwriters, and, these days, they get quoted through a computer program. In the past, when insurance quotes were completed by hand, underwriters would generally only quote each policy to one broker; however, now that the quotes are done by computer the underwriters allow several brokers to obtain quotes for the same customer.
If the brokers you call are using the same underwriters, which is often the case, you will likely get the same rate if you call multiple brokers to get a comparison. But if they are using different underwriters, the quotes could be significantly different. The highest quote I received for the Mooney was more than $1,000 — nearly twice what I ended up paying.
For larger, more expensive airplanes, such as a Pilatus or King Air, the rates are still quoted manually, and, in those cases, underwriters will only provide a quote to one broker. Provided the brokers you speak with deal with the same underwriters, only one broker can quote you. In this case it is worth doing some research on the broker before you call for a quote because, once you get quoted, you are locked in with that company.
Whether you purchase a small or large airplane, you should make an extra call to Avemco or any other direct underwriter you can find. It could provide different rates than your local insurance broker since it writes policies in-house.
Aside from finding a low-risk airplane and the most competitive underwriter, there are other ways to reduce your insurance cost. At AOPA you may get a discount on aircraft insurance by simply being a member. Some companies will give discounts for training beyond the required biennial flight review or for attending the FAA’s FAASTeam courses. And you may get a few percentage points off your rate by storing your airplane in a hangar versus parking it outside.
But other than flying a lot, Pinegar says, the most significant reduction in rate will come from an instrument rating. For lighter airplanes the rates could be anywhere from 2 to 5 percent lower, and for more complex airplanes the rate will likely be dramatically better, Pinegar says.
Insurance is a major fixed annual cost. But there are other bills you will have to contend with as an aircraft owner. In most cases, maintenance will be your heftiest bill. If you are handy with a wrench, you can save quite a bit of money on maintenance costs. While most maintenance-related work has to be completed or signed off by an aviation maintenance technician, there are some things you can do yourself.
As the owner of an aircraft not operating under Part 135, 121 or 129, you are permitted by the Code of Federal Regulations Part 43.3 to conduct your own preventive maintenance, as long as you provide the appropriate logbook entry and the work does not involve any complex assembly operations. Preventive maintenance includes such tasks as changing the oil; changing tires; cleaning and greasing wheel bearings; replacing damaged safety wires or cotter pins; replenishing hydraulic fuel; replacing safety belts, spark plugs and light bulbs; and more.
But before you get your hands dirty, you may need to ask yourself how competent you really are at completing these tasks. Chances are that you will break or damage parts or components that you are not familiar with handling, making it a lot more economical to hire a mechanic in the first place. You also have to consider how much the tools you may need will cost. The $10 screwdriver you bought at Wal-Mart is likely to strip the bolts on your airplane, a problem that can be very expensive to fix. And you are likely not as efficient as a professional mechanic, so you have to consider how much your own time is worth.
When it comes to the annual inspection, you must enlist an authorized mechanic. Some mechanics allow their customers to participate in an owner-assisted annual, work that could save you anywhere from 20 to 50 percent on the final invoice, says Kim Davidson, owner and operator of Kim Davidson Aviation in Santa Monica, California.
Davidson allows a very limited number of customers to participate in owner-assisted annuals. The reason for the limited number is that having the owner work on his or her airplane exposes the shop to potential liability issues if there is an injury. Davidson’s shop is also a large operation with several mechanics on staff. Having someone who doesn’t know what he or she is doing takes away from the professionalism of the shop. Davidson does, however, encourage customers to observe the annual inspection to learn more about their airplanes.
Another area where you could potentially save money is with parking and storing your airplane. Hangar fees can be high, and many single-engine piston airplane owners pay as much as $1,000 per month and even more to store their airplanes. Definitely do some research because the prices at the same airport can vary dramatically in different spaces. You can also ask around the airport to see if anyone has hangar room to spare. By splitting the cost of your airplane storage you can save yourself a bundle of cash while still providing full protection for your prized possession.
Depending on the airplane you have and the weather conditions at your home base, you could get away with parking the airplane outside. The cost for a city tiedown can be less than $100 per month. Yes, the wear and tear on the airplane will be greater, but with a good cover your airplane can be well protected. It may not make sense to pay $12,000 per year or more to protect an airplane that cost you $30,000 to purchase.
Airplane ownership is not cheap. There are many invoices to be paid. But with a little bit of work you can reduce those bills dramatically.
Smart Panel Upgrades: How to Save on Avionics
By Stephen Pope
If you own an airplane that’s older than about 10 or 15 years, chances are you’ve suffered from the occasional case of panel envy. You’ve seen the latest integrated avionics systems in your hangar neighbor’s airplane, and you’re imaging flying behind a panel full of glass just like he does.
A panel upgrade will never be cheap, of course, but there are several strategies you can employ to save yourself some serious money. The first is to time avionics upgrades with other panel work. For the vast majority of airplane owners, that probably means replacing your old steam-gauge instruments or radios at the same time that your avionics shop is tearing apart the panel to prepare you for the 2020 ADS-B mandate.
ADS-B will require a WAAS GPS position source with antenna, meaning you’re going to be making some major modifications if you don’t have this capability already. It makes sense to time glass-panel upgrades to coincide with this work. In the light-piston market, the choices abound, from a full Garmin G500/G600 retrofit to the addition of Aspen Evolution flight displays to maybe something simpler, like an electronic attitude director indicator.
Whatever you decide to do in the end, there are a few key upgrades you’ll at least want to consider. GPS moving map is probably at the top of the list (after all, you want to know where you’re going), followed by a primary flight display with synthetic vision, SiriusXM datalink weather (which we have to admit is much better than free ADS-B weather), a terrain warning system and a traffic advisory system. The all-in-one touch-screen GPS/navcom units from Garmin and Avidyne are excellent choices as well.
Keep in mind that avionics manufacturers will sometimes offer trade-in allowances on your old gear, or you can choose to sell the radios and other equipment you’ll pull out on your own on websites, like barnstormers.com. The popular Garmin GNS 430 still fetches a surprising amount of money on the used market — dollars you could use to upgrade to the latest technology.
Avionics makers also offer deals that can save you a bundle, especially at airshows, like Oshkosh and Sun ’n Fun, where you can walk away with a whole suite of goodies for many thousands less than you’d spend if you walked through the door of your friendly neighborhood avionics shop. Be sure to check manufacturers’ websites for the latest incentive programs.
You can also save money by purchasing reconditioned equipment. This probably won’t be an option if you’re looking to buy a product that has been on the market for only a short time, but for everything from radios to GPS receivers to audio panels, reconditioned gear can sell at a steep discount since the original owner already took the major depreciation hit. Keep in mind you won’t get the full manufacturer’s warranty that you would buying new, but you’ll at least have the peace of mind of a basic warranty.