In 2016 I bought a Cessna 182. Before that, I was renting Cessna 172’s, and there was a moment when it became clear to me that it was time to stop renting and start owning.
It can really be boiled down to a 3-part decision… Freedom, Frequency, and Finances. Deciding whether to buy or rent can be a complicated decision, but for me, boiling it down to these 3 categories made it way more clear.
Note: This post was adapted from the original video posted on this topic here:
Freedom
The first category is freedom. Freedom just means do I have the freedom I’m looking for in aviation.
In some rental and club situations, it might be challenging to take the airplane for a full weekend or overnight trip. Whereas in ownership, you end up having all of the freedom you could want because you own the thing and can fly it when and where you want.
Now, some rental and club scenarios have great access to airplanes and freedom isn’t an issue. If that’s your situation, that’s awesome. That’s probably worth staying in.
I was renting by the hour and I had very little freedom… The main time the airplane was available was during the evening on weekdays which is not convenient at all.
I watched a lot of sunsets in the plane but that was about it.
So, the questions to ask are:
Do I have the amount of flying freedom I would like in a renting situation? Or am I maxed out and the only way to unlock more freedom is by owning the airplane?
For me, I wanted longer rental blocks (weekend trips) and spontaneity. So the verdict on freedom eventually was OWN.
In regards to freedom, it’s worth noting that renting could also mean joining an ownership club, too. Ownership clubs can sometimes be a good blend of having good access to the airplane while also spreading out the costs among many owners.
But since you don’t have total ownership or unrestricted unlimited access to the airplane I’m going to reference clubs in the same boat as renting for the purpose of this discussion.
Frequency
Second is frequency. How often are you able to fly? Does your rental situation allow you to have the spontaneity you want?
If you’re in a rental situation where you’re flying about as frequently as you want or need, renting can be a great thing.
When I rented I had to think pretty far ahead. I wasn’t really able to say “the weather looks great tomorrow, let’s go flying” much, if ever.
When you own, frequency gets solved because you have unlimited access to the aircraft. You don’t have to think ahead and reserve the airplane before someone else.
I like having control over my schedule, and so just having control over the availability of my airplane is a really great thing.
So, the questions to ask are: Am I able to fly as much as I realistically want in renting? For the most part, am I able to fly when I want?
When I was renting, I was renting like 3-6 hours per month but I wanted to fly 10 or more per month. So for me, eventually the verdict on frequency was OWN.
Finances
Next is finances. Usually the first two, freedom and frequency, favor owning versus renting. It’s the finances that are the sticking point. It’s expensive to fly.
Finances can be tricky because you can’t just look at the hourly rate of owning vs. buying… you also have to look at the total amount spent for the year.
Let me explain.
First is comparing the hourly rate… when you’re renting, the hourly rate usually stays the same whether you fly a little or a lot. Sometimes you can get discounts for buying bulk hours but let’s ignore that for the time being.
The challenge with the hourly rate is that you get a bill on your credit card after every flight and it’s hard not to say “was that sunset worth $500”. (show on a chart a flat line). So you might want to own to bring your hourly rate down…
When you own, you have fixed costs that you have to pay for regardless of how much you fly: Insurance, hangar, annual inspection, etc. and you have variable costs like fuel that you only pay when the engine is running.
If you fly a little that year, your hourly rate is higher than if you flew a lot, because you don’t have as many hours to spread those fixed costs across. The more you fly, the lower your effective hourly costs.
If your hourly costs of owning are the same or less than renting, then that’s a pretty clear winner.
If your effective hourly costs of owning are still higher than renting at your projected number of flight hours per year, then you just need to decide if that premium is worth it to you to get all of the freedom and frequency you could want.
So, that’s one way to look at the finances. The second is comparing the total dollars you spent in a year.
In renting, your money spent varies directly with the number of hours flown.
When you own, you have fixed costs like your hangar, insurance, annual inspection, etc. that you incur even if the airplane doesn’t fly at all that year. But your variable costs like fuel are probably a lot less than the cost of renting.
So what happens is eventually your costs will intersect at a certain number of hours flown and money spent.
That makes it easy to show when it’s the same or cheaper to own, but the question to ask here is this: is it realistic to spend that much in the first place to achieve that break even?
In other words, if that breakeven happens at $20k spent per year but you planned on spending $10k per year, then you’d still want to rent. Even though it’s more expensive on an hourly basis, your total amount spent is more within your budget.
So, the questions to ask here are: Would owning be similar in price (or even less) versus renting? Or is the extra expense worth it for the freedom and frequency? Or based on how much I fly, is owning prohibitively expensive versus renting?
For me, while I didn’t love the hourly cost of renting the airplane, I couldn’t yet afford the annual commitment of owning one just yet. So I rented for a while until I could afford owning it. And that brings up an important point here…
It’s going to be different for everyone.
If you take two people evaluating the same rent vs. buy math, but their own personal financial circumstances are night and day different, they might come to different conclusions. So financially I can’t definitively say when you should own vs. rent.
However, here is my rationale on the finances of aviation. You should come up with yours, but here’s mine in case it helps. It’s simple and comes down to only two rules.
My Rules for the Finances of Aviation
Rule #1: Live within your means. Spend less than you make. That way if you make a little or make a lot, you’ll never be upside down financially.
Rule #2: Intentionally decide where you surplus time, energy, effort, and resources will be dedicated, based on what’s important in your life. Come up with a plan on how you’ll spend your time and money, and why.
Everyone is going to have a different take on #2.
For some people, they won’t get guac at chipotle because it’s extra and they do the math to know what that $1.95 would be worth if they invested it today and waited 50 years.
For me, I’d rather eat the guac.
I still want to save and invest and such but people will have different goals and priorities.
I don’t spend all of my money or time on aviation but there’s a balance there. You should find what your balance and priorities are.
And if you can fit aviation into it and also not break rule #1, then I think you’ve got a green light.
So ask yourselves the questions we just covered about freedom, frequency, and finances. If and when all three lights blink green, there’s a solid argument for owning.
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