Buying Your First Airplane Tom Haines, Editor-in-Chief AOPA Senior Vice President, Media
Transcript
Slide 1
Tom Haines, Editor-in-Chief AOPA Senior Vice President,
Media
Slide 2
Agenda 1. Realities of ownership Reality check Mission
assessment 2. Finding the right ride 3. The purchase process 4.
Q&A
Slide 3
Assumptions Youre not an owner Youve never been an owner Youre
evaluating whether aircraft ownership is right for you.
Slide 4
Top three most important things to consider when buying an
airplane: 1. Mission 2. Mission 3. Mission
Slide 5
Reality check Are you a good candidate for aircraft ownership?
Investments: Time Money Emotions.
Slide 6
Reality check Time Time to fly regularly Time to manage a
potentially large asset Think of it as owning a second home Money
Youll need plenty, and a gotcha fund Emotional fortitude Joy and
guilt.
Slide 7
Reality check Did I scare anyone away yet?
Slide 8
Mission assessment Be realistic about expected missions Buy an
airplane that meets 80 percent of your missions Do you really have
the time to make weekend trips twice a month? How many seats do you
need? How long will most of your missions be? Most GA flights are
less than 500 nm.
Slide 9
Mission assessment Be realistic about costs Can you afford this
particular type of aircraft Financing Maintenance Fuel
Hangar/tiedown State sales tax Are you insurable and at what price
and with what limitations? Are you disciplined enough to have a
contingency fund and to build reserves?.
Slide 10
Lets go shopping! Where to look for the right ride Manufacturer
AOPA Online Classifieds Trade-a-Plane (trade-a-plane.com) Aircraft
Shopper Online (ASO.com) Local FBO Local broker, dealer
eBay.com.
Slide 11
Shopping Things to consider Ageairframe and engine Features and
capabilities of a model can vary dramatically over the years. A
2005 Cessna 182 is vastly different than a 1965 model Hoursairframe
and engine Average number reported in price guides.
Slide 12
Shopping Things to consider Installed equipment What meets your
mission? Always cheaper to buy someone elses work, but it wont
exactly match your needs Airworthiness directives (ADs) Repetitive
One-time.
Slide 13
Shopping Things to consider Damage history When, where, how was
it repaired Logbooks intact and complete? Paint and interior
Location.
Slide 14
Shopping Whats it worth? Perform an aircraft valuation online
through Vref at AOPA Online Other sources: National Aircraft
Appraisers Association (NAAA) Aircraft Bluebook Price Digest
Remember your mission A bargain twin will eat you alive in
operating costs especially if it doesnt fit your mission.
Slide 15
Your ride... 1986 Cessna 182 Average number of airframe
hours3,000 hours Mid-time engine750 hours Upgrade: Garmin 430/530,
XM datalink weather, 3-blade prop, S-Tec 50 autopilot, 7 paint
& interior Vref says $105,400 wholesale; $128,300 retail. Youre
a good negotiator and get it for $110,000.
Slide 16
Costs Financing Get pre-qualified at www.aopa.org/loans Loan
Term 5-20 years (depending upon loan size) No pre-payment penalty
Simple Interest Rate (fixed for the life of the loan) Rates range
from 5.69%-12.75% Maximum Loan to Value 85% AOPA works with AIC
Title Services Provide the Title Search Obtain Bill of Sale from
Seller Register plane with the FAA
Slide 17
Costs Insurance Hullrepairs or replaces the airplane
Liabilityprotects your assets Two types of Liability coverage
Combined Single Limit (aka Smooth) coverage and Sublimits
Deductible or no? Get a quote to help determine overall costs Well
assume $110k hull, IFR pilot w/ 800 hours,
$1million/$100k/seat--$1,100 per year premium.
Slide 18
Fixed vs. Variable costs Fixed costs dont change based on hours
flown Finance charge (recouped with resale) Insurance costs
Hangar/tiedown fees Annual Inspection Variable (or Direct) costs
change based on hours flown Fuel costs Oil costs Reserves Routine
maintenance.
Slide 19
Fixed Costs Annual Inspection$1,300Annually$1,300
Insurance$1,100Annually $1,100 Tiedown/Hangar$390Monthly$4,680
Total Fixed $7,080 Fixed per hour 120 hours$59 Fixed Costs: 1986
Cessna 182
Total Costs--120 hours per year Fixed$59 Variable$115 Total$174
Fixed, Variable/Year$20,880 Loan ($653/mon.)*$7,836 Total per
year$28,716 *Partially recouped at resale. Assumes $110,000
aircraft, 15% down, 5.69% interest for 20 years. Total Costs: 1986
Cessna 182
Slide 22
Forms of Aircraft Ownership Individually owned (or in a
corporation or LLC) Partnership (Visit the new AOPA Partnership
Program at Booth 653; aopa.org/aircraftpartnership/) Fractional
Ownership Flying Club
Slide 23
Check out the airplane Review the paperwork Logbooks complete
and intact Airworthiness certificate Equipment list Weight and
balance Placards FAA-approved flight manual or owners handbook
Thoroughly inspect it yourself Fly it Try all of the avionics,
autopilot, intercom.
Slide 24
Check out the airplane Get a thorough pre-purchase survey by an
A&P A thorough pre-purchase survey is equivalent to an annual
inspection Airplane should be in compliance with all ADs Thousands
of dollars for a complex single.
Slide 25
The art of the deal Negotiate your best deal Contingent upon
passing the pre-purchase survey Contingent upon clear title.
Slide 26
Purchase documents Title search $200 to $400 for most airplanes
A clear title assures that when you own it you actually own it
Consider title insurance Chain of ownership Accident/incident
report 337 report.
Slide 27
Purchase documents Sales contract Outlines terms and conditions
Specifies any warrantiesusually none Specifies equipment on the
aircraft Specifies aircraft location and delivery location See AOPA
Online for a fill-in-the-blank sample.
Slide 28
Purchase documents Escrow Service can help facilitate a closing
Not always necessary Helpful if buyer, seller, and airplane are not
co- located Helpful if liens must be paid off to clear a
title.
Slide 29
Purchase documents Bill of Salesubmit to FAA Aircraft
Registrationsubmit to FAA Retain pink copy as temporary
registration Do not travel internationally on a pink slip Make sure
your insurance is effective on purchase date FCC Radio Station
Licensefor international flying only File with International
Registry for aircraft with an engine over 550 horsepower.
Slide 30
Maximizing flight time Business flyingwhats your company policy
and reimbursement? Charitable flying Angel Flight Young Eagles
LeasebackA flight school or FBOs pays you for flight time on your
aircraft.
Slide 31
Resources Dont go it alone! Type clubs AOPA AOPA Online.
http://www.aopa.org/members/pic/ownership/
Slide 32
Other AOPA Summit Forums 2 p.m. FridayWhat You Should Know
About Aging Aircraft, Room 23 3:30 p.m. FridayHow Successful
Business People Rely on General Aviation, Room 23 10 a.m.
SaturdayTax Benefits of Aircraft Ownership, Room 23.
Slide 33
Enjoy! Dont be daunted by the purchase process Dreams and
lifelong memories await you as an aircraft owner!