Turbine Pilot Finance: Thrill ride

Define your mission first. How do you envision using the airplane? This will define the type of aircraft that best fits your need. At the very least, this exercise will help you understand what airplanes you don’t want.

Define your intended aircraft’s support community. Who owns the same aircraft in your area? Does that airplane have an associated type club or online owners’ community? Tap into those human resources to get real-world intelligence.

Define the aircraft’s true cost. There is the acquisition price, yes. And you may have a clear picture of fuel burn, hangar rent, database updates, and other costs. But what really is the reserve? How easy are parts to obtain? How much is insurance? What’s the access like to good, qualified mechanics or a service center that has experts on your make and model? That analysis may cause you to consider buying a new airplane with a warranty on it—which brings us to number 4.

Define whether a used or a new airplane is your best value. If you own your own business and you can also utilize bonus depreciation to write off the purchase as a business expense, and if your price includes a manufacturer’s warranty for a new airplane, that slightly higher cost may mitigate all the issues raised in point 3. This option may also be worthwhile to nonbusiness owners.

Define your financing options. How would an all-cash deal compare with taking a loan while investing the cash? What’s your comfort level in having cash flow versus owning an aircraft outright? Firm knowledge in where you stand on the leverage/risk tolerance scale helps to inform how you’re willing to pay for the airplane.

If you have additional questions,contact AOPA Finance. If we don’t know the answers, we can help point you to other resources to answer your questions.

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