Buying a plane versus renting

RD,

One thing you did not tell us is what you plan to do AFTER 2 years and 500
hours.

If you do not plan to trade up, then do not buy new. Bonus depreciation is a
great deal, but if it gets recaptured, it ain't so great. Trading up can
avoid recapture.

If you do plan to trade up, maybe you should rent a little longer, until you
feel you are ready for your "target plane"

A172 vs. an arrow is not the same, did you mean archer?

Are you really just building hours, or trying to get somewhere? If you are
trying to get somewhere, you will be flying in IMC. You will want something
safe and efficient.

An Arrow may keep you happy for 500 hours, a 172 maybe not. If you are
seriously traveling, I would get something nicer,likely something faster.
Definitely more fuel efficient.

Definitely get up to date avionics, and an AP. With that much time in the
plane, the workload savings is definitely worth the bucks.

The only glass cockpit I like is the Garmin, due to its ability to reset.
If these things live up to the press, Garmin will greatly increase its
market share. If you are not set in your scanhabits, you might want to get
a glass cockpit.

If you really are going to put 500 hours on and then sell, I would lean away
from brand new. That kind of hours will depreciate a new plane pretty well.
You can sometimes pick up nearly new planes at a steal. Just don't buy a
lemon like Art's. If you are buying new, and plan to put those hours on, go
glass.

the more you tell the group, the more we can likely help you narrow down the
choices.

Dude,

The plane I'm looking at is a 2001 172R with the IFR nav package. It has
about 1200 hours on it and the price seems very reasonable. Local owner
wants to keep it in town. I like the fact it's somewhat new, low time, new
avionics etc and has a decent fuel burn rate.

My goal is to build time and experience. Finish off more ratings etc. I know
I can buy something much cheaper but I'm very hesitant being burnt on the
maintenance side with an older airplane and any other lurking surprises it
may bring. I know the history of this 172 from the day it came to our local
airport from the factory. No damage history etc. Always hangered etc.

Is 2001 still too new? Is there lots of room for depreciation still? The
price is about 20% less than any other advertised price I have seen for
other R models in the same year and hour range.




"Dude" wrote in message
...
RD,

One thing you did not tell us is what you plan to do AFTER 2 years and 500
hours.

If you do not plan to trade up, then do not buy new. Bonus depreciation is
a
great deal, but if it gets recaptured, it ain't so great. Trading up can
avoid recapture.

If you do plan to trade up, maybe you should rent a little longer, until
you
feel you are ready for your "target plane"

A172 vs. an arrow is not the same, did you mean archer?

Are you really just building hours, or trying to get somewhere? If you are
trying to get somewhere, you will be flying in IMC. You will want
something
safe and efficient.

An Arrow may keep you happy for 500 hours, a 172 maybe not. If you are
seriously traveling, I would get something nicer,likely something faster.
Definitely more fuel efficient.

Definitely get up to date avionics, and an AP. With that much time in the
plane, the workload savings is definitely worth the bucks.

The only glass cockpit I like is the Garmin, due to its ability to reset.
If these things live up to the press, Garmin will greatly increase its
market share. If you are not set in your scanhabits, you might want to
get
a glass cockpit.

If you really are going to put 500 hours on and then sell, I would lean
away
from brand new. That kind of hours will depreciate a new plane pretty
well.
You can sometimes pick up nearly new planes at a steal. Just don't buy a
lemon like Art's. If you are buying new, and plan to put those hours on,
go
glass.

the more you tell the group, the more we can likely help you narrow down
the
choices.

RD,

Its hard for me to say whether the individual plane is a good deal or not.

I would say that if the plane is as described, it could go for anywhere from
85 to 115. That is a huge range, but there have been a lot of owners
leaving these planes with banks who wholesale them to get them off the books
( many flight schools and leaseback owners did not make the money they
thought they would). I am sure someone will yell and scream that this is
too low, but I also know that others will say they have seen deals in this
range.

Is the owner of this plane an FBO owner, or is the plane on leaseback?
Sounds like it is.

If you really know all this about the plane, you may be willing to pay more
than another buyer, but remember, when you want to sell, there is no
guarantee that someone with similar knowledge will want to buy it. They
will assume a leaseback plane was abused before they even agree to a prebuy.
The prebuy can show that the leaseback experience was good for the plane
instead of bad, but no one knows unless they do the prebuy. (YOU WILL DO A
PREBUY, I DON'T CARE WHAT YOU THINK YOU KNOW!)

What other planes have you flown? How many hours do you have now? What are
you going to trade up to?

I think many here will agree that you are better off paying too much and
getting the right plane, than getting a great deal, and missing out on a
plane that would suit you better.

Also, total cost of ownership is more important than purchase price. At 500
hours and two years, you could see a 20k swing in TCO over that period.

After I tried planes other than Cessna's, I had a better respect for what
Cessna's offered, but I knew they were not what I wanted to fly anymore.
Call some other companies (Piper, Diamond, Tiger, Socata, Symphony, Liberty,
whatever), and try their planes. Tell them what you are planning to do, and
they will likely want you to try their planes before you decide. Do it.
Then you can look for a plane with more knowledge of what you want.

Hi Dude,

The plane is not on a lease. They own it outright and bought another fancier
ship to use instead of the 172. It now just sits in a heated hangar. The
only reason the price is low, compared to what I see advertised anywhere
else, is they want to keep the plane in the city. And no, it's not an FBO
plane. They have a business and bought this plane for leisure/business use.
It's been commercially maintained and is very clean on the inside and out
minus the odd hangar rash mark.

I will take your advice and definitely have a prebuy inspection done. Again,
my only fear is to know whether or not the depreciation has stabilized.

Take Care.


"Dude" wrote in message
...
RD,

Its hard for me to say whether the individual plane is a good deal or not.

I would say that if the plane is as described, it could go for anywhere
from
85 to 115. That is a huge range, but there have been a lot of owners
leaving these planes with banks who wholesale them to get them off the
books
( many flight schools and leaseback owners did not make the money they
thought they would). I am sure someone will yell and scream that this is
too low, but I also know that others will say they have seen deals in this
range.

Is the owner of this plane an FBO owner, or is the plane on leaseback?
Sounds like it is.

If you really know all this about the plane, you may be willing to pay
more
than another buyer, but remember, when you want to sell, there is no
guarantee that someone with similar knowledge will want to buy it. They
will assume a leaseback plane was abused before they even agree to a
prebuy.
The prebuy can show that the leaseback experience was good for the plane
instead of bad, but no one knows unless they do the prebuy. (YOU WILL DO
A
PREBUY, I DON'T CARE WHAT YOU THINK YOU KNOW!)

What other planes have you flown? How many hours do you have now? What
are
you going to trade up to?

I think many here will agree that you are better off paying too much and
getting the right plane, than getting a great deal, and missing out on a
plane that would suit you better.

Also, total cost of ownership is more important than purchase price. At
500
hours and two years, you could see a 20k swing in TCO over that period.

After I tried planes other than Cessna's, I had a better respect for what
Cessna's offered, but I knew they were not what I wanted to fly anymore.
Call some other companies (Piper, Diamond, Tiger, Socata, Symphony,
Liberty,
whatever), and try their planes. Tell them what you are planning to do,
and
they will likely want you to try their planes before you decide. Do it.
Then you can look for a plane with more knowledge of what you want.

In article , "RD" writes:

The
only reason the price is low, compared to what I see advertised anywhere
else, is they want to keep the plane in the city. And no, it's not an FBO
plane. They have a business and bought this plane for leisure/business use.
It's been commercially maintained and is very clean on the inside and out
minus the odd hangar rash mark.

I'm not questioning your explaination but I can't see why I would care where my
plane goes when I sell it. Be careful that there isn't some other reason.

Chuck

"RD" wrote in message ...
snip
The
only reason the price is low, compared to what I see advertised anywhere
else, is they want to keep the plane in the city.

You mentioned this before, but I'm having trouble understanding the
logic behind it. What difference does it make to the seller where the
plane goes? Are they going to want to lease it back?

John Galban=====N4BQ (PA28-180)

Rd,

I will take your advice and definitely have a prebuy inspection done.


By someone who has no business (or other) relation with the owner, one
might add. Using the maintenance shop that has always worked on the
plane doesn't make sense.

--
Thomas Borchert (EDDH)

Rd,

The
price is about 20% less than any other advertised price I have seen for
other R models in the same year and hour range.


Well, time to find out why that is so!

--
Thomas Borchert (EDDH)

2001 is pretty new, still some fairly rapid "depreciation" in there.
It may be that aircraft prices are headed back up after 3 years of
declines, we shall see (depends on the economy). If they do, then the
appreciation may well outperform the depreciation due to use. 1200
hours is midtime, and if you put 500 hours on it it will be at high
time of 1700 which is a harder to sell point, but can be done if you
lower the price. If it is the airplane you want, has the avionics you
want, it may not be too bad a deal, certainly better financially than
buying new. In 500 hours and 5 years you will spend $20000+ fixed
costs (hangar, insurance, annual) and $20000 in hourly costs, so and
extra $10000 in depreciation one way or the other is not going to be
all that signifigant, then again its not chump change. For getting
your ratings, I can hardly think of a better trainer.

I think this is a good time to buy, as the market seems to have
bottomed. A 172 is a great airplane. Go for it!

Know any friends who want to buy a plane as well? A parnership with 1
or 2 others might well fit your bill...it would certainly reduce your
exposure. I was in a similar situation a couple of years ago; my wife
and I wanted to travel, and I just wanted to fly, and $75 an hour for
a clapped-out 172 seemed a bit extreme on an ongoing basis.

Two friends and I ended up purchasing an old (1963) Beech Musketeer.
Plenty of people warned me about buying an old plane, and several more
wanred me about how much I would dislike the Beech. They were all
wrong. The first year we had the plane, we put over 500 hours on it,
yet surprisingly had very few scheduling problems. I took her on cross
countrys to Florida, New York, Michigan, South Carolina...flew her all
over.

And given the amount we flew her, the per hour costs came out to about
$45-$50 an hour wet, including everything. We had our share of
replacement stuff (Carb, brakes, tires, some radio work, hoses), but
in the end it was both far cheaper and far nicer than having to rent.

I know several other older plane owners at my airport, and their
experience has pretty much been the same; older 'mainline' planes
(172s, Cherokees, Musketeers) make great first planes, and don't end
up breaking the bank. These are not complex airplanes...there isn't
really all the much to break. Basic (but useable) avionics, simple
systems, well-understood engines coupled with frequent oil changes and
plenty of flying tends to make these very affordable planes.

One caveat. You don't need a lot of money, but you *do* need to be
able to cough up a thousand or two pretty quickly in a pinch (happened
to us on the Carb). I've seen several planes than end up sitting on
the tarmac because the owner can't come up with the cash to fix
something necessary. So they sit, and develop other problems, which
can't be fixed either...so they sit more and develop *more*
problems....you get the picture.

As I said, I believe these things are easier with a parter. Or, as
somebody else mentioned, the club route. After having gotten my
Instrument and Commercial tickets in the Musketeer, we were approached
to sell it to a club (for more than we paid for it). We sold it, paid
off the loan, got memberships to the club and look back on purchasing
the Mouse as one of the best decisions we ever made. If I might add, I
have a few specific suggestions:

1. Buy older (1960-1975). Many of these planes are quite sound, and
are inexpensive to buy and operate. A 1970 172 pretty much flys like a
1998 172...for a lot less.

2. Get a *very* good prebuy inspection. Pay the extra, it will be well
worth it.

3. Map out your needs and expectations pretty clearly beforehand, and
select a few candidate models. None of these things are speed demons,
but each has model-specific plusses and minuses, and if you will be
spending 500 hours over the next 3 years in one, you don't want to
keep thinking you made a mistake.

4. Buy it like you want it. That isn't saying you won't add a thing or
two, but if you want certain avionics, a certain kind of interior,
etc. try to find it up front...if you put it in, you will never recoup
the expense, and you often end up spending much more than you expect.

5. Buy for the next five years, not the next 20. I know you
specifically mentioned simple planes, but some people think about
buying Mooneys or older Bonanzas when they have 100 hours. The more
complex the plane, the more expensive it will be. An annual on my
Musketeer ran me $1000. On a similar (but retractable gear) Sierra, it
ran more than twice that. The planes at my airport that actually fly
are the 150s, the 172s and the Cherokees. The ones that sit and look
pretty are the Bones and the Mooneys. Don't expect that this will be
the plane that you will have in 30 years.

6. Get in touch with user groups for the planes you are considering
before buying. The Musketeer pilot group has been amazing. Great
support, wonderful advice, and people who know where the parts are.

Owning does not have to be expensive. We have a guy at our airport who
owns an old Cessna 150 and has flown it for the last decade for an
average of under $25 an hour wet. That might be extreme, but I think
the conventional wisdom that owning has to be more expensive than
renting does not necessarily hold true if you do your homework and fly
a lot.

Good luck,

Cap



"RD" wrote in message ...
Just wondering if anyone has some experience on the above subject. I'm
looking at building up some time (500 hours or more) within the next couple
of years. My two options are to buy an older 172/Arrow etc or just to keep
renting which is very expensive.

If I can find a decent airplane, in the end, I assume purchasing one to use
for a couple years will be cheaper. Am I wrong about this? Any pitfalls I
should be aware of?

A second question is regarding purchasing a newer 172. I know the initial
cost is more, but given the age is it probable to save money via maintenance
compared to an older airplane? What about resale on a newer 172 (year 2001)
versus resale on an older 172/Arrow?

Any input is really appreciated.