"Ben Hallert" wrote in message
ups.com...
Great thread, I'm in the same mode right now and I'd like to run
another option past y'all.

I've been training in a PA-28-161 and I'm taking my checkride next
week. At the same time, I'm moving to a town that has no Pipers for
rent (Cessna only). I like the low wing planes, and I really want to
buy my own for my upcoming IFR training.

I can scrounge together around $20-25K out of pocket and I hate to
finance things. Since I'm an extremely low-time pilot, I don't want to
go flying with my family until I've got more practice. I've put this
together, made some cost of ownership calculations, and here's what I'm
thinking of:

Piper Tomahawk w/ IFR stack. I've seen nice looking, low time aircraft
listed in places for the 20-25 range. Here's what I get:

1. Full ownership, no financing.
2. IFR capable in the indicated pricerange.
3. Enough usable space to carry me and an instructor (I'm 250, leaving
about 160 to for a fully fueled plane).
4. Low wing
5. Low cost of ownership.

I'd love to buy a Cherokee 140, but they seem to be consistently about
10K higher. If I save up until I can afford one flat out, then that's
a bunch of time where I'm not flying. It seems that it might be a
better bet for me to get something that'll fulfill all of my needs for
the next 100 or so hours (I can always rent a Cessna for the occasional
flight I need more seats if I really decide I want to) while I build
some time and become a better pilot/get instrument rated. Finally,
I've read up a lot about the spin troubles, so my eyes are open.

Does this sound like a well reasoned approach? Am I missing anything
big? I know some of you might suggest 'go ahead and finance the
difference', but that's something I REALLY don't want to do. I'm
confident that I could get my money back out of the PA-38 when I'm
ready to upgrade to a Cherokee, and this seems like the difference
between flying and dreaming.

I want to go into this with my eyes open. Comments?

Ben,

I am with you on the finance thing, but I got over it. Here's why.

Most things that people pay interest on, they shouldn't. That's because
they would often save money and make a wiser choice by buying cash. If you
can't afford the luxury of a new car, then buying a used one is likely a
better choice. They are pretty much disposable items in the end. As far as
furniture and other items go, you are likely upside down in them as soon as
you start making payments - and the rates are usually stupid.

Houses are different, the cost of buying and selling is just too much.
Buying a house with over 20% down that you can afford to pay for is usually
a wise decision so long as you buy right, and expect to live there for 5
plus years. Often, renting and saving will not get you there, and in the
meantime, the house you wanted has likely appreciated. I have made money on
every home I have owned. I don't mean I sold it for more than I paid, I mean
that the check at closing was more than my down payment and ALL my payments
combined (this is not usual, but we have had a good run).

Now, for airplanes. You can buy an older plane and usually get back most of
the money you spend to buy it. What you are out is anything you put into it
to to bring it up to standard, fuel, maintenance, engine time, insurance,
and INTEREST. Yes, you can avoid INTEREST. But, planes are like houses more
than like cars or other items.

Better to have INTEREST on a plane that is the right plane for you, than all
the other payments with a lesser plane.

If you do the math, you will see that your costs look more like UPGRADES,
MAINTENANCE, FUEL, PRINCIPAL, and interest (note the small letters).

You need a cash reserve or risk grounding due to finance which means that
the bills get higher as the plane rots. Buying and selling low end planes
is fun for some people, but most would rather buy more plane now, and avoid
the transaction risks, costs and hassles.

Bottom line, unless you can find a plane thats just like you want it and pay
cash (and still have a few thousand in reserve), you are better off
borrowing money to finance it. It will give you a much better value in the
end.