The costs can mount up, with the expenses ranging from the initial sale price and down payment, to repairs, storage fees, insurance , and fuel costs. One of the first things you'll have to consider is what kind of plane you're going to buy.
The type of plane you wish to purchase radically affects the price point. Here's the breakdown of what you're looking at when it comes to the purchase price of a plane.
If you're really lucky, you'll be able to pay for your plane in cash. But not everyone has that luxury. You may have to get a loan for your purchase. So don't forget, along with the full sale price for your plane, you'll also have to consider the interest you'll pay on top. But don't relax, because you're not soaring yet.
There are other considerations. When not in use, planes must be stored at an airport either in hangars or outdoors. Outside storage is typically cheaper than hangars and other covered spaces, although this depends on the region and location of the airport. Urban airports typically charge more than comparable rural airports. Incidentally, residential storage is rarely available to the average small plane owner. Home equity lines of credit HELOCs offer an alternative to traditional financing, but, in either case, buyers should shop for the best available interest rate, and loan terms.
Just like a car, there are several things that are factored into the financing for your aircraft. The financing company may consider the following:. Financing companies look at some of the same factors lenders do for car loans, including your down payment and credit score. The Aircraft Owners and Pilots Association AOPA recommends establishing an escrow fund for maintenance to pay for engine, propeller, avionics, and airframe overhauls. Aviation insurance covers aircraft damage and provides liability for anything your aircraft damages.
Coverage varies by policy, and aircraft damage is categorized either as in-flight damage and from external damage. Small aircraft should have oil changes every four months or 50 hours—whichever comes first. For the average user, this represents three oil changes per year. You have money questions. Bankrate has answers.
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The information on this site does not modify any insurance policy terms in any way. Long lines at airports, delayed flights and packed planes have made commercial air travel an unpleasant chore. But make no mistake: Private jet costs can still climb into the tens of millions of dollars. Though secondhand jets are cheaper, they still cost millions of dollars. With extras and customization, the price can soar to hundreds of millions of dollars.
The purchase price of a private jet represents only a fraction of the cost of owning one. The price of a private jet depends on its size, the number of passengers it can hold and the distance it can fly.
Because of that, fuel is one of the highest costs for private jets. Planes with larger fuel tanks for long-range flights require more fuel. For example, the Bombardier Global has a fuel capacity of nearly 50, pounds.
While a private jet rental is considerably more expensive than flying on a commercial flight, it is still much cheaper than buying your own jet. Flights on private jets are charged by the hour. Prices vary depending on the size of the plane, the length of the flight and the number of people on board.
Be creative and generous with your talents and see if it can truly help your FBO or mechanic, and everybody wins. Gas expense is obvious. Engine reserves mean that you should sock away so much per hour, for every hour you fly, toward your engine overhaul, so that when your engine reaches TBO, the money is available for a new engine. Avgas is a huge variable expense that depends on location, time of the year and your schedule. There are so many variables to this element that we have left it for another discussion.
The great dream of flying and owning your own airplane is within reach for the average guy. Use this article as a guide and come up with new and creative ideas of your own. The Next Step?
Get a copy of Trade-A-Plane or The Controller, and start calling on ads for airplanes that sound good in your area and can be easily inspected. Get your Bank of America second mortgage set up, call ahead for insurance, then go and inspect your potential airplane. Remember, for our budget to work, we need to start with an airplane with the fewest major glitches and no major engine or airframe work coming up soon.
I truly believe that owning an airplane can be one of the happiest experiences you can have, and that it is within the reach of everybody. The average guy or gal can own an airplane. A good, thorough prepurchase inspection should catch the largest potential expenses, but things do break from time to time, hence the need for the contingency funds. Note: Almost all Cessna s and Piper Tomahawks have been trainers at one time or another, and may have damage histories related to student use.
A repair from damage done 10 or more years ago will have little impact on the airplane, provided it has been properly repaired, it has been inspected by your guy and the test flight reveals no abnormal flight characteristics. Presidential Aviation. Liberty Jet. Lifestyle Advice. Wealth Management. Rewards Cards. Your Privacy Rights. To change or withdraw your consent choices for Investopedia. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page.
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Personal Finance. Your Practice. Popular Courses. Wealth Wealth Management. Ongoing expenses may include flight crew salaries and expenses, the costs of routine maintenance and unforeseen repairs, hangar rental, and aircraft insurance.
Alternatives include private jet charter services, partial jet ownership, and membership in a private jet club. Article Sources. Investopedia requires writers to use primary sources to support their work.
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