Buying a Private Plane

Maybe it's the security lines at airports that have you frazzled. Or you see more of the airline personnel than your own family because you travel so much. Whatever the reason, you are seriously considering buying your own private airplane. Here are a few things you need to consider before making such an important decision.

Types

You could buy a Cessna 152 for about $10,000. It's barely flyable. Or you could fly more safely if you spent $20,000 to $50,000 on a more modern Cessna 172. Maybe you want to move up in class to a Cirrus-22 that goes for a cool $250,000 or find a Beechcraft Bonanza for about $3/4 million. Or, if you are a high roller, hold out for a Gulfstream at $40 million or a Boeing Business Jet for about $100 million. Oh, lest we forget, gas, maintenance and a pilot or two will add about 50 cents to every dollar you spend.

Considerations

There are several things to consider when purchasing an airplane. Typically, the term can be up to 20 years, because most aircraft have a life expectancy of at least that long if the plane is well maintained. Like a mortgage, you will pay to have the title checked because, in most cases, sales are made of used aircraft. You can expect to pay interest that exceeds that of a car loan because the lender is taking more risk. The purchaser of the airplane must guarantee that the airplane undergo routine maintenance depending on the hours that it is in the air. Also, the lender must be able to see the aircraft within a period of time set out in the loan agreement.

Effects

If owning an airplane is something that's appealing to you, you first must decide what type of plane to buy. If you have a jet in mind, understand that it will be more expensive to buy and maintain, even though it is a much faster aircraft. Then you must consider whether you are going to buy a new or a used airplane. While used planes often cost less, they do have more mechanical problems that will increase your expenses long term. Balance that with the fact that most general aviation aircraft are over 20 years old. Then you'll need to decide whether you will buy a home-built aircraft or a popular brand. Home-built aircraft are lighter, faster and more economical but can be a challenge to build.

Identification

While your lender may require it, you are strongly urged to have a certified mechanic inspect your plane before you buy it. Your mechanic should be able to confirm that the maintenance is up to date and that all work done is current and well documented. The cost of such an inspection can run as high at $1,000 or more because you will need to find a mechanic that is familiar with the aircraft you are purchasing.

Warning

Once you have signed the papers, it's too late to decide if you can afford the aircraft. Before you proceed, factor in all the costs associated with owning an aircraft, which fall roughly into the following categories: financing costs, insurance, storage, operating costs and maintenance. As a rule of thumb, consider your ongoing costs to be about 50 percent of the purchase price of the plane.