Guide To Buying an Aircraft - My Experiences

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niss
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Guide To Buying an Aircraft - My Experiences

Post by niss »

It's that time of year again, many of us are waking from our aeronautical hibernation and are looking towards the training season. With that said, many members have asked me about my experiences of buying C-FUBC and what they need to know about buying an aircraft.

*NOTE*
This is by no means everything you need to know about purchasing an aircraft. IMHO there is nothing that can really prepare you for the exitement, anticipation, and apprehension of owning an aircraft. Like it says at the end of it, talk to as many people you can. Get as much info about that type of aircraft as you can. Just like the guy at the end of reading rainbow use to say "don't just take my word for it". Ask mechanics, brokers, owners, everyone! RESEARCH, RESEARCH, RESEARCH!

I hope this helps anyone who is thinking about purchasing an aircraft.

If anyone notices any glaring errors in this please speak up.

Without further adieu.
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Last edited by niss on Sun Mar 18, 2007 12:46 pm, edited 1 time in total.
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Post by niss »

Purchasing an Aircraft.

To begin it I must start by saying that ownership is not for everyone. There is an incredible amount of variables and hurdles to owning an aircraft. Aircraft parts can be quite expensive, fuel is expensive and they are full of ‘surprise’ costs just to keep running. This isn’t to say that it is a rich mans game but that there is considerably more money being played with than when owning a car or a boat.

Your Needs!

Firstly decide what kind of aircraft you are looking for. What do you need? Do you need an aircraft to train on? What kind of training are you doing? Are you doing your Private Pilots License? Your Commercial Pilots License? Your Multi rating? Your float rating? Do you just want something to use to commute or do you just want another toy to help relax with? All these will affect your decision as to what kind of aircraft you want. There are plenty of fantastic and reasonably priced trainers on the market. The aircraft I co-own is a Piper Cherokee 140, an aircraft that can be found at almost any general aviation airport one goes to. Other popular training aircraft include but are not limited to: Cessna 150/152, Cessna 172, Piper Tomahawk, etc. As the Cessna 172 is the most popular and widely available aircraft, odds are that if you are looking for a trainer there will be plenty of these available.

Renting Or Owning?

Since my experience in aircraft purchasing is very limited (I have only ever owned one & it is meant for PPL & CPL training) I will only talk about what I know. When searching for an aircraft to train on think long and hard about whether you want to own or rent. Both have their benefits. Ironically the benefit they both share is freedom, but in different forms. When renting you have freedom from responsibility. You are not faced with huge costs for foreseen and unforeseen maintenance (ie. Annual or Hangar rash, etc.). That said however, you are at the mercy of the FBO for aircraft availability and the hourly running rate is higher than if you owned the aircraft yourself (most local FTUs at the time this is written in my area charge $115/hr for a 172, whereas my Cherokee 140 costs me ~$75/hr). Ownership requires a greater start up cost and responsibility. However, you are free to take the aircraft wherever you want, when ever you want, however long you want, and at the end of your training you are not left with nothing.


Cha-Ching!

The initial costs for an aircraft can vary from case to case. For the purpose of this article we will use the numbers from my aircraft (my actual costs in the end were different due to certain circumstances). My PA28-140 was for sale for $32,000.00. Lets assume that you have that money available. In the province of Ontario the PST (Provincial Sales Tax) is 8%. That means that the 140 is $32K + $2560.00. When purchasing an a/c in Canada it must be registered in your name with the Civil Aviation governing authority Transport Canada (Federal Aviation Administration in the United States). The fee for registration as of 2006 is $110.00 CDN. While this is negligible considering the value of the aircraft it is an example of the many small fees a/c owners have to pay. In order to fly an aircraft in Canada it must be insured. There are many insurance companies available, each with its own pros and cons. My insurance company is one of the few who has an Open Pilot Clause. This means that for the purpose of ferrying (10hrs or less a year if I recall correctly) any person holding a Private Pilots License or higher can fly my aircraft without needing to be added to the insurance. This is a very nice clause to have as it allows for greater flexibility and convenience, however does cost more than some other policies. When I first bought my insurance I was quite surprised as to how little it costs and how much it covers. The insurance for me and my partner costs $2000.00 CDN a year. It covers $32,000.00 if the a/c is written off, $1 Million liability, and $100,000.00 per person in the a/c (4 seats). The $100.00 deductible was very surprising to me as it is much lower than its automotive or house insurance counterparts. Perhaps the most nerve wrecking of costs is the certainly-uncertain Annual inspection. All private aircraft in Canada must undergo an Annual inspection once every year. Assuming proper maintenance and no surprises usually this inspection will cost $1500 - $2000. During this inspection they remove the interior (seats, upholstery, etc.) and inspect all controls, linkages, electronics, etc. They also go open up inspection plates and remove the cowls on the fuselage to inspect the control surfaces, engine, etc. They give the aircraft a very thorough inspection to ensure that it is still safe to operate. Sometimes there are a few surprises. You may find that the hoses on your engine are gone, the oleo is leaking or damaged, you may find a bend, etc. All these are what ensure that airplane owners nails are bitten down to the tips during annual time. Assuming no hard landings and some diligence and TLC on your part will ensure that your annual will be as painless as possible but be prepared. If you decide to purchase an aircraft keep putting money away the whole year for that annual. Every year NavCanada (a corporation responsible for providing ATC, radio navigation aids, weather, publications, etc.) sends aircraft owners a bill. Usually if you are just a private operator it is a small amount ($75 in my case) but it is still something to keep in mind. Also unless you have your own airfield you are going to need a home for your aircraft. Most airports charge around $50 a month for tie-downs on the grass and hangars start at around $300 a month for T-Hangars. Tie-downs are nice and cheap but they leave your aircraft exposed to the elements and potential vandals, but a hangar costs much more.

Solo or Dual?

So you are decide that yes owning is for you, yes you have been approved for that loan, or you just have the money laying around, etc. You are committed to purchasing an aircraft now all you have to do is find one. There are two major routs you can go. You can go for sole ownership, or you can go for co-ownership (like I did). With sole ownership you have to bear all the costs yourself, but you do not have to worry about whether or not the aircraft will be at the airport, you do not have to worry about your partners bending the airplane etc. You have to ask yourself, how much is having the aircraft to myself worth to me? If a lot, sole ownership is for you. Since I could not afford to purchase an aircraft outright by myself this made the decision very easy for me. I was going to have to find a partner.


Finding your baby

Now comes time to find the aircraft of your dreams, where do you look? There are tons of aircraft brokers online, a quick Google search will reveal a wide variety of aircraft and a wide variety of prices. Ebay even has airplanes on it but I would stay away from those. COPA (Canadian Owners and Pilots Association (http://www.copanational.org)) is also a great place to start. What aircraft you choose depends on your needs. For a training aircraft you probably do not want to go out and get the newest and prettiest and fastest airplane out there. Nor do you need the newest and best avionics available. All you want is something that is structurally sound, and with a relatively fresh engine. Research the hell out of that particular aircraft! Find out everything you can, some aircraft have their own little quirks. Know everything you can about the aircraft you plan on buying before you buy. It may save you lots of money and heartache down the road. I would recommend finding an unbiased AME to do a pre-purchase inspection to help you decide. I am not entirely sure as to how much a Pre-purchase costs as I did not get one done (I lucked out and got a good a/c but it could have easily ended up the other way) but it is still a good idea. Make sure that there is no wing spar damage, no corrosion, no bends, cracks, etc. Go through all the logs (Maintenance Logs, Journey Logs) and get a feel for the airplanes history. Damage history isn’t necessarily a deal breaker depending on the damage and if it has been properly repaired, but it is definitely something you would want to know. Make sure that the engine is in good shape. An overhaul on a Lycoming O-320 can cost anywhere between $16,000 - $25,000 so watch out! The Time Before Overhaul (TBO) on the O-320 is 2000 hours, but it is not a requirement if owned privately. It says TBO but usually they go well beyond that. That said try to find an engine with a fresh overhaul, or at the very least a fresh Top Overhaul. Make sure that the compression is up to snuff. Nothing on an engine is cheap, new cylinders can cost $1500 a piece so it’s better to have the previous owner to pay for that instead of you. Fresh paint is not essential for a training aircraft. It doesn’t have to look nice, it just has to fly right, and most importantly be safe! I will not really touch on avionics as that really depends on what you need your aircraft for. However you will probably want at the very least a working VHF radio, a VOR and NAV receiver and an Intercom. GPS are nice to have but do not use one for training, learn the old way first, as GPS can make things too easy.


Married to your plane, and your partner

If you decide to go for co-ownership make sure you and your partner are compatible! Nothing can ruin ownership worse than a partner you hate. I am very lucky to have an amazing partner. There have never been any issues, and the aircraft is always there when we need it. You may decide to find a friend or two and split the aircraft. One word of advice on partnerships: No gentlemen’s agreement! Make sure that you draft a contract that clearly outlines all the terms and conditions of your partnership. Things to include in your contract:

- Maintenance
- Storage
- Usage (schedule)
- Operating costs
- Dissolving of partnership
- Sale of aircraft

At the end of this guide is a link to a sample contract that I actually used (after modifying it to suit my needs). Make sure all your bases are covered, do not leave anything open, and make sure that all parties are 100% satisfied with it. The contract does not necessarily have to be strictly adhered to but it does have to be respected. For example, let’s say that you outline a schedule in the contract. As long as it is agreed on by your partners you can deviate from the schedule, but if there is an issue then the contract is the final word. Make sure that all parties have a signed and dated copy of the contract to keep for their records. In a partnership, personality is everything! The smoother your partnership is the more enjoyable your aircraft ownership will be. Maintenance can be a big deal when you have partners. Let’s say that you blow an engine, depending on the contract the three of you may be responsible to bear the costs of a new engine. What if one partner can not afford it? One solution may be for the others to pay for the third partner in exchange for some or all of his shares, or to dissolve the partnership entirely and sell the aircraft. All these scenarios must be taken into consideration when drafting your contract.

All this information has been based on my experiences with my aircraft ownership and partnership. That said, I have not been able to describe all that there is to owning an aircraft, but I hope that I was able to shed some insight into aircraft ownership. Whatever you do, be smart and safe, try to look at all angles and make the best and most knowledgeable decision you can. Talk to people who own the type of a/c you are eyeballing, talk to mechanics and ask them their opinions. ASK QUESTIONS!

http://www.1st-of-pryor.com/co-ownership%20contract.htm
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Post by donnybrook »

good stuff. thanks!
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Post by Adam Oke »

Thanks Niss, I remembered reading somewhere in a post that you were typing this up. Glad you took the time to give us dreamers some insight.

I wouldn't mind knowing about some more general costs that you are forced to run into. Inspections. These and what ever else shows up in your Journey Log....
  • ELT
    Transponder
    First Aid Kit
    Pitot Static System ... non-IFR if that inspection even makes a differeance. I wouldnt think it does, just once a year as opposed to every other.
    Fire Extinguisher
    ect...
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Post by Vilk »

thanks for taking the trouble... i ain't gonna get much sleep tonight :D
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Post by Golden Flyer »

Niss, you came through as promised. Just brilliant! Thanks alot for that piece of writing...
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Post by Snowroller »

Great post Niss,much app :smt023 reciated
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Post by Adam Oke »

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Post by Snowroller »

Don`t be too harsh on the child,he was probably dropped on his head when an infant,give him at least 50% of a chance
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Post by Adam Oke »

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Post by Meathead »

If this is what this Forum is coming to I think I'll find somewhere else to go :x
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Post by niss »

edited.

I allready know I am better than BTU I dont need to sink to his level.
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Post by Blakey »

niss wrote:Purchasing an Aircraft.

Your Needs!

Firstly decide what kind of aircraft you are looking for. What do you need?
Niss,

Thanks for the excellent, well-written post. In my opinion, the best piece of advice is that contained in the sentence above. "Make sure you know what you want and what you can afford". There's too much trouble and money involved here to kid yourself on either count. In my case, knowing exactly what I wanted cost me a lot of money. But I got exactly what I wanted and that was the goal. I could have bought something else cheaper but I wouldn't be happy!

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Post by BTU »

Im sorry to Niss for the Post that I replied to him on here as I stated before I was a new user to this forum and as I do Not have any interest in purchasing aircraft im sure alot of you do. Again Niss if you can accept my appology for the disgusting remarks I made I am sorry.
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Post by niss »

Thank you for your apology. I accept.
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Post by niss »

Adam Oke wrote:Thanks Niss, I remembered reading somewhere in a post that you were typing this up. Glad you took the time to give us dreamers some insight.

I wouldn't mind knowing about some more general costs that you are forced to run into. Inspections. These and what ever else shows up in your Journey Log....
  • ELT
    Transpoder
    First Aid Kit
    Pitot Static System ... non-IFR if that inspection even makes a differeance. I wouldnt think it does, just once a year as opposed to every other.
    Fire Extinguisher
    ect...
As I havent had the a/c for a full year yet some of these things havent been done yet, so unfortunatley I wont be able to give first hand info.

Fire extinguisher was allready in the a/c and an anual inspection was free at my local OFS (http://www.ofsgroup.com/). I currently have a dry-chem extinguisher in my a/c, if you need to get a new one try not to get one. I am planning on upgrading soon to a non-drychem model. The dry-chem just sprays powder everywhere. If you are in the cockpit and you use it, you will not be able to see or breath. While it fufills the legal side of things it is not all that practical.

ELT recertification and batt. replacement if I am not mistaken was $75. Ill dig up the reciept when I get home.

I havent done the XPDR calibration yet or the static/pitot system yet so I will let you know how it is when its done.

Let me know if you want to know anything else.

Niss
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Re: Guide To Buying an Aircraft - My Experiences

Post by Adam Oke »

Hey Niss,

Have you got any prices on some inspections yet? For that matter, anyone else have input? I read on your blog about some expenses.

Annual

Cha-Muther-Ching
Just to run you through the work that was done on my a/c.
7 qts of Aeroshell 100 - 48.65
45 Misc bolts - 63.00
1 Nut - 3.15
1 Pneumatic Filter - 29.50
1 more Pneumatic Filter - 12.15
8 Spark Plugs - 385.20
2 Main Tires - 263.88
2 Main Tire Tubes - 206.92
4 Rocker Cover Gaskets 14.95
4 Break Pads - 49.28
8 Brake Rivets - 1.70
1 Belt - 63.05
1 Plate (?) - 105.96
ELT Battery & Recertification & S/H - 289.00
48 hrs of labour @ 65.00/hr = 3120.00
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Re: Guide To Buying an Aircraft - My Experiences

Post by bandit1 »

From my experience,

IF IT FLIES, FLOATS OR F-CKS,

RENT IT!
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Re: Guide To Buying an Aircraft - My Experiences

Post by Big Pistons Forever »

I am on my 5 th airplane so I think I have some insight into the realities of aircraft ownership. There are two factors that make buying an aircraft require carefull thought.

1) The cost of parts has far outstripped inflation and the increasing regulatory burden on shops has forced up hourly shop rates dramatically. This has resulted in alot of owners scrimping on maintainance. You can get away with for awhile but eventually you have to pay the piper (no pun intended). It is often at this stage that the owner puts his aircraft up for sale. The foolish buyer will then be on the hook for 10 or more years of outstanding maintainance items.

2) Related to No 1 is the huge disparity between the cost of individual parts of an airplane and the selling price. A good example of this is the $ 32,000 Pa 28 in the earlier post.
the cost to overhaul the Pa 28 Lycoming 0 320 , including labour would be on average about $ 25,000. Doing the engine is not going to add $ 25,000 to the selling price as nobody is going to pay $57,000 for the airplane. The same goes for the other big ticket items like radios, paint, and interior.


Therefore I think you should buy the best aircraft you can find. It should have a strong engine, newer radios, and good paint and interior. It should also have a documented history of complete and regular maintainance. Buying from the top of the market will be the cheapest way to go in the long run.
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Re: Guide To Buying an Aircraft - My Experiences

Post by Chuck Ellsworth »


Therefore I think you should buy the best aircraft you can find. It should have a strong engine, newer radios, and good paint and interior. It should also have a documented history of complete and regular maintainance. Buying from the top of the market will be the cheapest way to go in the long run.
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