When negotiating the price of buying an airplane, it’s easy to get so caught up on getting the best deal on the purchase price that other costs associated with aircraft ownership get neglected. Of course it’s in your best interest to negotiate hard on the purchase price—several thousand dollars either way can make a huge difference to your wallet. But don’t let that one price blind you to what other costs await you when you take that airplane home.
When it comes to expenses, the costs can be high with either a new or used airplane. If you buy a new airplane, the equipment is more sophisticated and complex, and takes higher costs to maintain. On the other hand, older airplanes may need more maintenance. This is all the more reason to have a thorough knowledge of the dollars involved when you buy an airplane.
Just like with a house, car, or business, the costs associated with an airplane can be divided into fixed and variable items. Fixed costs are those that can be negotiated once and will be in place for a year. Examples of fixed costs may be your aircraft payment, hangar rental, or aircraft insurance premium. Those fixed costs are easy to put into a budget.
Then there are the variable costs. Here’s where talking to other owners could be helpful. Variable costs change from month to month and are sometimes difficult to estimate. Some examples of variable costs are cleaning the airplane, flight training, and fuel. You can get a fairly good idea of fuel costs on the Internet with websites that monitor fuel prices nationwide.
Of all the variable costs, maintenance is the most difficult to estimate. First you have scheduled maintenance—your annual—and other maintenance events that you know will take place during the year. However there are always surprises when it comes to aircraft. Even if you’ve talked to other owners, remember that no two aircraft are the same so you’ll need to budget a contingency fund for those unexpected trips to the mechanic.
Your goal is to predict the unexpected. Putting together all these numbers will give you a head start and a realistic view of aircraft ownership. And don’t forget you’ll still need $100 in the food budget. You have to pay for that hamburger every pilot seeks.
Are you considering aircraft ownership? If so, AOPA Aviation Finance wants to make your purchase experience as smooth as possible. For information about aircraft financing, please visit us at www.aopafinance.com or call 800/62-PLANE (75263).
