Calculating Airplane ownership Cost

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Over the years, calculating the cost to own an airplane is one of the most oftentimes asked questions I receive. There are a lot of distinct cost factors that go into owning an airplane. The purchase price is just one piece of the whole cost of the airplane proprietary pie. Other pieces include taxes, hangar or tie down costs, fuel, oil, insurance, ramp fees, motor reserves, routine maintenance, inspection items and subscriptions to name a few. The following description will help you decide what costs are involved in owning an airplane and how to plan your finances accordingly. Keep in mind the following description offers a generic estimation on how to fancy the proprietary costs of most piston airplanes.

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How is Calculating Airplane ownership Cost

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First, we will divide the total cost of proprietary into two sections; the first section will be the indirect cost, and second section direct cost.

Indirect Costs

Indirect costs are the costs that you will pay whether or not the airplane flies. These expenses include the purchase price of the airplane (or monthly payments), insurance, tie down or hangar fees, subscription fees, taxes, and tax benefits.

Let's start with the first indirect cost I mentioned, purchase price or capital cost. This is one of easiest expenses to calculate. If you finance the airplane, get a quote from the bank on the down cost required and interest rate. Currently, rates are almost 6% with a minimum of 15% down and 20 year financing. As an example, if you put 20% down on a new Da40Xls priced at 0,000, your monthly cost would be just over ,000 a month over 20 years.

To fancy insurance fees, call your insurance agent and collect a quote for the airplane you are inspecting purchasing with your contact level.

Hangar fees and tie downs are self explanatory. Call the airport or Fbo where you want to base your airplane and ask what options are available. Commonly there are about four choices: tie down (leaving your airplane surface in the elements), covered (airplane is surface in the elements but has a shade covering), hangar in tasteless (airplane is constantly moved nearby in a large hangar shared with some other airplanes), and ultimately an individual or T hangar. At many airports hangar space is scarce so don't be surprised if you end up on a waiting list. Hangar prices vary agreeing to your location. My T hangar in Concord, Nc costs just north of 0/month while that same hangar in Fort Lauderdale would cost well over ,000/month. If you keep your airplane outside, please be sure to at least cover it. It will safe the interior and the avionics. Also, keep in mind that some insurance fellowships will lower your prime if you can hangar your airplane rather than keep it on tie downs.

Subscription services may not apply to you. If you own a J-3 cub, you can skip to the next paragraph. almost all aircraft manufactured after the early 1990s offer an Ifr Gps. If you have an Ifr Gps, you will need to subscribe to a monthly modernize to keep your database legal to navigate solely by Gps and shoot Gps approaches. If you have Xm weather, you will pay nearby /month for the basic subscription or /month for the full package. The winds aloft highlight on the full box is more than worth the further cost to get it. Xm radio is additional. If you own a glass panel airplane, you may opt for Garmin's safe taxi charts and/or arrival plate services. Visit http://www.mygarmin.com for cost information. Jeppesen also offers arrival plates for glass cockpit airplanes. This aid requires an introductory upfront cost to install and a higher monthly payment, compared to Garmin's arrival plate services.

Unfortunately taxes do not disappear with airplanes, with the exception of tax exempt corporations (see an aviation tax consultant for more data to see if you qualify). Taxes vary from state to state. In Florida, it is 6% of the purchase price. In North Carolina it is a flat tax of ,500. North Carolina, however, charges asset tax which varies by county and by city. Where I live in North Carolina, the airplane asset tax rate is nearby 63 cents per 100 dollars, and I have a city tax of 42 cents per 100 dollars. If you use the airplane for business, you may be able to depreciate the use and cost of the airplane which benefits your estimated cost of ownership. Please consult with an airplane tax expert to decide your individual situation.

Direct Operating Costs

Calculating the direct operating costs is a small trickier. There are distinct ways of calculating what it will cost you each hour to fly. My formula is just one method, but it works. Here you need to decide on how many hours you plan on flying a year to form an each year base budget.

Let's start with the basics. Most pistons engines will require an oil change every 50 hours. Depending on where you live, a acceptable oil change will cost in the middle of 0 to 0. Call the local mechanic on the field and find out what he charges. If you plan on flying 100 hours a year, the math is simple.

Fuel consumption varies agreeing to distinct aircraft. You can Commonly visit a manufacturer's website or consult the Poh to get the cruise fuel burn. If you are flying an aircraft with a worn out engine, reconsider the published fuel burn to be the best case scenario (which often is not the case). Find out what avgas costs at your local airport and do the math. Keep in mind avgas prices vary

Engine and propeller reserves are calculated into the equation even if you own a low time or new airplane that you plan on selling long before overhaul. You can Commonly get a quote from a local Faa motor repair center on the cost of overhauling your motor or on the cost of installing a installation remanufactured engine. Take that price and divide it by the hours remaining till Tbo and you will get an idea of how much you need to put away each hour. If you plan on buying a twin, duplicate the fuel, motor and propeller costs.

Scheduled maintenance is someone else cost worth planning for. Every year your airplane will be due for an inspection. Again, prices will vary depending on where you do your inspection. Shop rates in South Florida median /hour, while in North Carolina they are nearby /hour. Call a aid town customary with your airplane and see what they fee for a acceptable each year inspection. Keep in mind that the price they quote you doesn't include squawk items, airworthiness directives, aid bulletins or regulatory transfer items. These are extra costs. If your airplane is still under warranty, then you shouldn't expect any surprise repair bills when you pick your airplane up. A safe bet for budgeting further expenses for an airplane out of warranty is to duplicate the price of the each year inspection fee; this budgeting will cover almost any unexpected surprises that may occur during the year. You may also reconsider a hold for paint, interior, and avionics upgrades in which case you will want to put away a small extra.

Finally, you will need to decide what your airplane will be worth if and when it comes time to sell it. Airplanes typically stop depreciating after 5 years. Like cars, their depreciation rates vary. fellowships such as Vref and Aircraft Bluebook offer sell pricing and trade-in pricing.

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