Friday, September 10, 2010

Rent vs. Buy?

It has been a long time, .

I have embarked on the journey to a new decison - should I buy an aircraft (or a share of an aircraft)?

I am, and will continue to be, a member of the Rockcliffe Flying Club. They have a a fleet of aircraft (mostly 172s, with two 152s and a 182) available for rent. These aircraft have various levels of equipment, there are enough of them that you can get one pretty much when you want one. They are of course older aircraft, but well maintained, and safe.

And expensive. By the time you rent one (wet rental), add HST, figure on $150 per Hobbs hour.

There is also the price of "opportunity cost" - by the published rates, if my wife and I take a club aircraft to PEI for a week, then there is a minimum charge of 3 hours per day even if I never start the engine.

However, if I don't fly, the cost to me of a rental aircraft is nil.

Renting, and not owning, makes sense if you do not fly a large number of hours per year. There are rent vs. buy calculators, but the more you fly the more it makes sense to consider owning instead of renting (the crossover point is determined primarily by the costs associated with owning, such as the purchase price, but is usually somewhere around 50-100 hours per year).

The cost of ownership can be dramatically reduced by owning a share in an aircraft, instead of a whole aircraft. The operating costs per hour are the same, but the capital cost (purchase price), annual costs (tie-down, insurance, annual inspection, ....) are divided n ways, as are the costs of any upgrades, paint jobs, etc. Owning a share of an aircraft can drop the crossover point to as little as 30 hours per year. Instead of $150 per hour, flying is half that cost.

Another journey begins.

3 comments:

lahso said...

It's not just a cost calculation. If you want to fly serious cross-country, you have to buy -- I've never seen renting work out for anyone, ever, who did more than a tiny handful of token cross-country trips before giving up.

If you plan on doing only sightseeing/training/day trips (and maybe one token overnight trip/year), then you can buy or rent depending on how much you want to fly.

Jim said...

Yes, I am finding that out.... since getting my license I have been flying once every 3-4 weeks to maintain RFC currency, sometimes driving around taking someone sightseeing, sometimes just grinding out a few circuits. The few times I have gone cross-country -- man, it is expensive. Not to mention the 3-hours per day minimum charge if you go to a destination.

I am negotiations right now to buy a share.

Tony Hunt said...

Once you buy a plane or a share, you see the club's rentals in a whole new way. Most privately owned aircraft demonstrate pride of ownership and individual attention to detail, the carpets are clean, the avionics work, the PTT and the audio panel is not a jury rig, etc.

I always maintained my membership at the local Club though, it was nice to feel I supported the operation and I felt welcome whenever I dropped by, in the car or in the plane. You'll soon want to do your IFR anyway, since you have a nice plane at your disposal for longer trips.