| Over the years, calculating the cost to own an | | | | Unfortunately taxes do not disappear with airplanes, |
| airplane is one of the most frequently asked | | | | with the exception of tax exempt corporations (see |
| questions I receive. There are a lot of different cost | | | | an aviation tax consultant for more information to |
| factors that go into owning an airplane. The purchase | | | | see if you qualify). Taxes vary from state to state. |
| price is just one piece of the entire cost of the | | | | In Florida, it is 6% of the purchase price. In North |
| airplane ownership pie. Other pieces include taxes, | | | | Carolina it is a flat tax of $1,500. North Carolina, |
| hangar or tie down costs, fuel, oil, insurance, ramp | | | | however, charges property tax which varies by |
| fees, engine reserves, routine maintenance, inspection | | | | county and by city. Where I live in North Carolina, the |
| items and subscriptions to name a few. The following | | | | airplane property tax rate is around 63 cents per 100 |
| article will help you determine what costs are | | | | dollars, and I have a city tax of 42 cents per 100 |
| involved in owning an airplane and how to plan your | | | | dollars. If you use the airplane for business, you may |
| finances accordingly. Keep in mind the following article | | | | be able to depreciate the use and cost of the |
| offers a generic estimate on how to calculate the | | | | airplane which benefits your estimated cost of |
| ownership costs of most piston airplanes. | | | | ownership. Please consult with an airplane tax |
| First, we will divide the total cost of ownership into | | | | specialist to determine your individual situation. |
| two sections; the first section will be the indirect | | | | DIRECT OPERATING COSTS |
| cost, and second section direct cost. | | | | Calculating the direct operating costs is a little trickier. |
| INDIRECT COSTS | | | | There are different ways of calculating what it will |
| Indirect costs are the costs that you will pay | | | | cost you each hour to fly. My method is just one |
| whether or not the airplane flies. These expenses | | | | method, but it works. Here you need to decide on |
| include the purchase price of the airplane (or monthly | | | | how many hours you plan on flying a year to |
| payments), insurance, tie down or hangar fees, | | | | establish an annual base budget. |
| subscription fees, taxes, and tax benefits. | | | | Let's start with the basics. Most pistons engines will |
| Let's start with the first indirect cost I mentioned, | | | | require an oil change every 50 hours. Depending on |
| purchase price or capital cost. This is one of easiest | | | | where you live, a standard oil change will cost |
| expenses to calculate. If you finance the airplane, get | | | | between $150 to $300. Call the local mechanic on the |
| a quote from the bank on the down payment | | | | field and find out what he charges. If you plan on |
| required and interest rate. Currently, rates are | | | | flying 100 hours a year, the math is simple. |
| approximately 6% with a minimum of 15% down and | | | | Fuel consumption varies according to different |
| 20 year financing. As an example, if you put 20% | | | | aircraft. You can usually visit a manufacturer's |
| down on a new DA40XLS priced at $350,000, your | | | | website or consult the POH to get the cruise fuel |
| monthly payment would be just over $2,000 a | | | | burn. If you are flying an aircraft with a worn out |
| month over 20 years. | | | | engine, consider the published fuel burn to be the |
| To calculate insurance fees, call your insurance agent | | | | best case scenario (which often is not the case). Find |
| and obtain a quote for the airplane you are | | | | out what avgas costs at your local airport and do |
| considering purchasing with your experience level. | | | | the math. Keep in mind avgas prices vary |
| Hangar fees and tie downs are self explanatory. Call | | | | Engine and propeller reserves are calculated into the |
| the airport or FBO where you want to base your | | | | equation even if you own a low time or new airplane |
| airplane and ask what options are available. Usually | | | | that you plan on selling long before overhaul. You can |
| there are about four choices: tie down (leaving your | | | | usually get a quote from a local FAA engine repair |
| airplane outside in the elements), covered (airplane is | | | | station on the cost of overhauling your engine or on |
| outside in the elements but has a shade covering), | | | | the cost of installing a factory remanufactured |
| hangar in common (airplane is constantly moved | | | | engine. Take that price and divide it by the hours |
| around in a large hangar shared with several other | | | | remaining till TBO and you will get an idea of how |
| airplanes), and finally an individual or T hangar. At | | | | much you need to put away each hour. If you plan |
| many airports hangar space is scarce so don't be | | | | on buying a twin, double the fuel, engine and propeller |
| surprised if you end up on a waiting list. Hangar prices | | | | costs. |
| vary according to your location. My T hangar in | | | | Scheduled maintenance is another cost worth planning |
| Concord, NC costs just north of $300/month while | | | | for. Every year your airplane will be due for an |
| that same hangar in Fort Lauderdale would cost well | | | | inspection. Again, prices will vary depending on where |
| over $1,000/month. If you keep your airplane | | | | you do your inspection. Shop rates in South Florida |
| outside, please be sure to at least cover it. It will | | | | average $95/hour, while in North Carolina they are |
| protect the interior and the avionics. Also, keep in | | | | around $70/hour. Call a service center familiar with |
| mind that some insurance companies will lower your | | | | your airplane and see what they charge for a |
| premium if you can hangar your airplane rather than | | | | standard annual inspection. Keep in mind that the |
| keep it on tie downs. | | | | price they quote you doesn't include squawk items, |
| Subscription services may not apply to you. If you | | | | airworthiness directives, service bulletins or regulatory |
| own a J-3 cub, you can skip to the next paragraph. | | | | replacement items. These are extra costs. If your |
| Almost all aircraft manufactured after the early 1990s | | | | airplane is still under warranty, then you shouldn't |
| offer an IFR GPS. If you have an IFR GPS, you will | | | | expect any surprise repair bills when you pick your |
| need to subscribe to a monthly update to keep your | | | | airplane up. A safe bet for budgeting additional |
| database legal to navigate solely by GPS and shoot | | | | expenses for an airplane out of warranty is to double |
| GPS approaches. If you have XM weather, you will | | | | the price of the annual inspection fee; this budgeting |
| pay around $30/month for the basic subscription or | | | | will cover almost any unexpected surprises that may |
| $50/month for the full package. The winds aloft | | | | occur during the year. You may also consider a |
| feature on the full package is more than worth the | | | | reserve for paint, interior, and avionics upgrades in |
| additional cost to get it. XM radio is additional. If you | | | | which case you will want to put away a little extra. |
| own a glass panel airplane, you may opt for Garmin's | | | | Finally, you will need to determine what your airplane |
| safe taxi charts and/or approach plate services. Visit | | | | will be worth if and when it comes time to sell it. |
| for cost information. Jeppesen also offers approach | | | | Airplanes typically stop depreciating after 5 years. |
| plates for glass cockpit airplanes. This service requires | | | | Like cars, their depreciation rates vary. Companies |
| an initial upfront cost to install and a higher monthly | | | | such as Vref and Aircraft Bluebook offer retail pricing |
| payment, compared to Garmin's approach plate | | | | and trade-in pricing. |
| services. | | | | |