Tom Haines, Editor-in-Chief AOPA Senior Vice President, Media

Agenda 1. Realities of ownership Reality check Mission assessment 2. Finding the right ride 3. The purchase process 4. Q&A

Assumptions You’re not an owner You’ve never been an owner You’re evaluating whether aircraft ownership is right for you.

Top three most important things to consider when buying an airplane: 1. Mission 2. Mission 3. Mission

Reality check Are you a good candidate for aircraft ownership? Investments: Time Money Emotions.

Reality check Time Time to fly regularly Time to manage a potentially large asset Think of it as owning a second home Money You’ll need plenty, and a “gotcha” fund Emotional fortitude Joy and guilt.

Reality check Did I scare anyone away yet?

Mission assessment Be realistic about expected missions Buy an airplane that meets 80 percent of your missions Do you really have the time to make weekend trips twice a month? How many seats do you need? How long will most of your missions be? Most GA flights are less than 500 nm.

Mission assessment Be realistic about costs Can you afford this particular type of aircraft Financing Maintenance Fuel Hangar/tiedown State sales tax Are you insurable and at what price and with what limitations? Are you disciplined enough to have a contingency fund and to build reserves?.

Let’s go shopping! Where to look for the right ride Manufacturer AOPA Online Classifieds Trade-a-Plane (trade-a-plane.com) Aircraft Shopper Online (ASO.com) Local FBO Local broker, dealer eBay.com.

Shopping Things to consider Age—airframe and engine Features and capabilities of a model can vary dramatically over the years. A 2005 Cessna 182 is vastly different than a 1965 model Hours—airframe and engine Average number reported in price guides.

Shopping Things to consider Installed equipment What meets your mission? Always cheaper to buy someone else’s work, but it won’t exactly match your needs Airworthiness directives (ADs) Repetitive One-time.

Shopping Things to consider Damage history When, where, how was it repaired Logbooks intact and complete? Paint and interior Location.

Shopping What’s it worth? Perform an aircraft valuation online through Vref at AOPA Online Other sources: National Aircraft Appraisers Association (NAAA) Aircraft Bluebook Price Digest Remember your mission A “bargain” twin will eat you alive in operating costs— especially if it doesn’t fit your mission.

Your ride Cessna 182 Average number of airframe hours—3,000 hours Mid-time engine—750 hours Upgrade: Garmin 430/530, XM datalink weather, 3-blade prop, S-Tec 50 autopilot, 7 paint & interior Vref says $105,400 wholesale; $128,300 retail. You’re a good negotiator and get it for $110,000.

Costs Financing Get pre-qualified at Loan Term 5-20 years (depending upon loan size) No pre-payment penalty Simple Interest Rate (fixed for the life of the loan) Rates range from 5.69%-12.75% Maximum Loan to Value – 85% AOPA works with AIC Title Services Provide the Title Search Obtain Bill of Sale from Seller Register plane with the FAA

Costs Insurance Hull—repairs or replaces the airplane Liability—protects your assets Two types of Liability coverage Combined Single Limit (aka “Smooth”) coverage and Sublimits Deductible or no? Get a quote to help determine overall costs We’ll assume $110k hull, IFR pilot w/ 800 hours, $1million/$100k/seat--$1,100 per year premium.

Fixed vs. Variable costs Fixed costs don’t change based on hours flown Finance charge (recouped with resale) Insurance costs Hangar/tiedown fees Annual Inspection Variable (or Direct) costs change based on hours flown Fuel costs Oil costs Reserves Routine maintenance.

Fixed Costs Annual Inspection$1,300Annually$1,300 Insurance$1,100Annually $1,100 Tiedown/Hangar$390Monthly$4,680 Total Fixed $7,080 Fixed per hour 120 hours$59 Fixed Costs: 1986 Cessna 182

Variable Costs Fuel consumption14 gph$5.39/gal$75.47 Oil consumption0.20 qts$5.40/qt$1.08 Oil changes$17550 hours$2.92 Engine/Airframe maintenanceper hour$18 Avionics maintenance per hour$5 Engine, Avionics Reserveper hour$13 Total variable costs per hour 120 hours$115 Variable Costs: 1986 Cessna 182

Total Costs--120 hours per year Fixed$59 Variable$115 Total$174 Fixed, Variable/Year$20,880 Loan ($653/mon.)*$7,836 Total per year$28,716 *Partially recouped at resale. Assumes $110,000 aircraft, 15% down, 5.69% interest for 20 years. Total Costs: 1986 Cessna 182

Forms of Aircraft Ownership Individually owned (or in a corporation or LLC) Partnership (Visit the new AOPA Partnership Program at Booth 653; aopa.org/aircraftpartnership/) Fractional Ownership Flying Club

Check out the airplane Review the paperwork Logbooks complete and intact Airworthiness certificate Equipment list Weight and balance Placards FAA-approved flight manual or owner’s handbook Thoroughly inspect it yourself Fly it Try all of the avionics, autopilot, intercom.

Check out the airplane Get a thorough pre-purchase survey by an A&P A “thorough” pre-purchase survey is equivalent to an annual inspection Airplane should be in compliance with all ADs Thousands of dollars for a complex single.

The art of the deal Negotiate your best deal Contingent upon passing the pre-purchase survey Contingent upon clear title.

Purchase documents Title search $200 to $400 for most airplanes A clear title assures that when you own it you actually own it Consider title insurance Chain of ownership Accident/incident report 337 report.

Purchase documents Sales contract Outlines terms and conditions Specifies any warranties—usually none Specifies equipment on the aircraft Specifies aircraft location and delivery location See AOPA Online for a fill-in-the-blank sample.

Purchase documents Escrow Service can help facilitate a closing Not always necessary Helpful if buyer, seller, and airplane are not co- located Helpful if liens must be paid off to clear a title.

Purchase documents Bill of Sale—submit to FAA Aircraft Registration—submit to FAA Retain pink copy as temporary registration Do not travel internationally on a pink slip Make sure your insurance is effective on purchase date FCC Radio Station License—for international flying only File with International Registry for aircraft with an engine over 550 horsepower.

Maximizing flight time Business flying—what’s your company policy and reimbursement? Charitable flying Angel Flight Young Eagles Leaseback—A flight school or FBOs pays you for flight time on your aircraft.

Resources Don’t go it alone! Type clubs AOPA AOPA Online.

Other AOPA Summit Forums 2 p.m. Friday—What You Should Know About Aging Aircraft, Room 23 3:30 p.m. Friday—How Successful Business People Rely on General Aviation, Room a.m. Saturday—Tax Benefits of Aircraft Ownership, Room 23.

Enjoy! Don’t be daunted by the purchase process Dreams and lifelong memories await you as an aircraft owner!

Questions?