Mooney Ownership - Cost, Options, Insurance and Corporate America for a 37y/o new pilot

[SilentT]

To start out like everyone here I have had an affinity for mooneys since childhood. Finally made career progress enough to train to fly and to think I can own one. Better still... I think I got corporate America to pay for it! I've been eyeballing 252s and Encore modded 252s. 

To start the fun my employer is willing (pending one final signoff) to cover GSA standard mileage for "business use of a personal aircraft" $1.76/statute mile. I travel 2-4 weeks a month and there was a very persuasive PPT outlining the productivity gains of paying me to fly my mooney to site vs taking commercial. 

Long story short, 435kn / 500 statute miles each way, sometimes more depending where we go, expect to make it in about 3 hours give or take. So pretty close to $300/hr 6 hours a week 2-4 weeks a month weather permitting.

Now for the fun, I'm a newer pilot. not a lot of time and wanting to do IR in a forever plane so I can learn to fly what I buy. Also I'm a buy it once buy it for life kind of guy and all your advice here was to buy an upgraded plane the way you want it not upgrade one yourself. Interest rates SUCK right now. Best financing I've found is a no BS loan at 7.5%. The problem I run into is first year / newer pilot hull insurance. I already have an expandable 1-5MM umbrella liability policy that conveniently doesn't exclude aviation. Avemco gave me a quote at $8000/yr @ 180k they said they would do that today, they might go to $200k. Next break would be 500/TT 50hr/retract according to underwriter.

I see it as I have a few options:

• Pay bigger down payment and sweet talk lender into letting me insure plane (200-250k) for less (assuming 20% below insurance rate) and $670/mo insurance costs
• Buy plane at 1% increase in interest (8.5% with heloc, no need for hull ins) and fly it hull naked to build hours with liability coverage until hull ins makes more sense

Renting planes isn't reasonable when flying 3 hours each way, and parking M-F with mins. I have access to  less-liquid cash, but its doing pretty well right now (better than 8.5) and I don't want to change my retirement savings plans.

To make the best decision, I want to check numbers against real word examples and the friends here. I've been searching the forums for cost of ownership, I assume a K is higher than average with a turbo. But I do have some numbers to start with, and I'd like opinions.

Starting with Reimbursement 

	Miles	Hours	Pay	$200/hr cost est	Excess
Trip	1000	6	1760	1200	560
2 Trips	2000	12	3520	2400	1120
3 Trips	3000	18	5280	3600	1680

 

As you can see high level, opex costs I averaged to $200 per hour. I feel that's a bit conservative for reserves but starts in a good place, where I don't feel I have to be hoping for no issues. Scouring here and google lead me to $150-$180/hr to be about right. But I live in a low cost area aka a corn field and costs a pretty reasonable. In an effort to be fair, I  used the finance opportunity cost here. The premium interest being paid over the standard assumption you would get 6% over 15 years on investments. Here is where I am:

Category Total Cost per Hobbs Hour Total Cost per Month Fuel ($5.30/gal, 10gph) $64 $772 Opp. Cost Finance Charge (first month worst) $29 $350 Maintenance & Inspections $25 $300 Taxes $15 $180 Hangar (866 ft2) $7 $85 Databases and subs $5 $60 Insurance (Liability Only) $5 $58 Insurance (full coverage) $56 $667 TOTAL COSTS (liability) $150 $1,805 TOTAL COSTS (full coverage) $201 $2,414

Did I miss something? With approx 145hours a year of flight?

The only thing I haven't fully addressed is the unexpected and random blow up for $10-20K needed at any time something goes wrong. I have access to that capital if absolutely necessary, but in my mind, I intend to fund and aircraft account and send all reimbursements there, and keep it topped off as necessary.

Thoughts?

Edited February 27, 2024 by SilentT

[redbaron1982]

2 minutes ago, DanSmith3 said:

To start out like everyone here I have had an affinity for mooneys since childhood. Finally made career progress enough to train to fly and to think I can own one. Better still... I think I got corporate America to pay for it! I've been eyeballing 252s and Encore modded 252s. 

To start the fun my employer is willing (pending one final signoff) to cover GSA standard mileage for "business use of a personal aircraft" $1.76/statute mile. I travel 2-4 weeks a month and there was a very persuasive PPT outlining the productivity gains of paying me to fly my mooney to site vs taking commercial. 

Long story short, 435kn / 500 statute miles each way, sometimes more depending where we go, expect to make it in about 3 hours give or take. So pretty close to $300/hr 6 hours a week 2-4 weeks a month weather permitting.

Now for the fun, I'm a newer pilot. not a lot of time and wanting to do IR in a forever plane so I can learn to fly what I buy. Also I'm a buy it once buy it for life kind of guy and all your advice here was to buy an upgraded plane the way you want it not upgrade one yourself. Interest rates SUCK right now. Best financing I've found is a no BS loan at 7.5%. The problem I run into is first year / newer pilot hull insurance. I already have an expandable 1-5MM umbrella liability policy that conveniently doesn't exclude aviation. Avemco gave me a quote at $8000/yr @ 180k they said they would do that today, they might go to $200k. Next break would be 500/TT 50hr/retract according to underwriter.

I see it as I have a few options:

• Pay bigger down payment and sweet talk lender into letting me insure plane (200-250k) for less (assuming 20% below insurance rate) and $670/mo insurance costs
• Buy plane at 1% increase in interest (8.5% with heloc, no need for hull ins) and fly it hull naked to build hours with liability coverage until hull ins makes more sense

Renting planes isn't reasonable when flying 3 hours each way, and parking M-F with mins. I have access to less liquid cash, but its doing pretty well right now (better than 8.5) and I don't want to change my retirement savings plans.

To make the best decision, I want to check numbers against real work examples and the friends here. I've been searching the forums for cost of ownership, I assume a K is higher than average with a turbo. But I do have some numbers to start with, and I'd like opinions.

Starting with Reimbursement 

	Miles	Hours	Pay	$200/hr cost est	Excess
Trip	1000	6	1760	1200	560
2 Trips	2000	12	3520	2400	1120
3 Trips	3000	18	5280	3600	1680

 

As you can see high level, opex costs I averaged to $200 per hour. I feel that's a bit conservative for reserves but starts in a good place, where I don't feel I have to be hoping for no issues. Scouring here and google lead me to $150-$180/hr to be about right. But I amin the middle of no where  corn field Indiana so my costs are more reasonable. In an effort to be fair, I  used the finance opportunity cost here. The premium interest being paid over the standard assumption you would get 6% over 15 years on investments. Here is where I am:

Category Total Cost per Hobbs Hour Total Cost per Month Fuel ($5.30/gal, 10gph) $64 $772 Opp. Cost Finance Charge (first month worst) $29 $350 Maintenance & Inspections $25 $300 Taxes $15 $180 Hangar (866 ft2) $7 $85 Databases and subs $5 $60 Insurance (Liability Only) $5 $58 Insurance (full coverage) $56 $667 TOTAL COSTS (liability) $150 $1,805 TOTAL COSTS (full coverage) $201 $2,414

Did I miss something? With approx 145hours a year of flight?

The only thing I haven't fully addressed is the unexpected and random blow up for $10-20K needed at any time something goes wrong. I have access to that capital if absolutely necessary, but in my mind, I intend to fund and aircraft account and send all reimbursements there, and keep it topped off as necessary.

Thoughts?

Is $85 for a hangar monthly fee realistic?! I'm paying $600 per month for my hangar!!

I cannot give you my experience regarding costs because I had bad luck... but what I can tell you is that when I did the math myself, the breakeven point for renting vs owning was around 150 to 170 hours per year.

[Ragsf15e]

I only have an F, but Id say it costs more like $220/hr for my ~90 hours/year and I own my hangar and only pay $2k for full insurance.  And I help in my annuals and oil changes to keep those costs down.  Nothing in aviation pencils out.  Don’t go in thinking it will.  However, getting reimbursed for some of the expenses would be awesome for you!

Don’t insure for less (or more) than actual hull value.  If you have an incident, they can pay the lower hull value and take the aircraft (which was worth more).  

[toto]

1 minute ago, Ragsf15e said:

Nothing in aviation pencils out.

I think most of us try to avoid writing anything down 

OP's chart is mildly terrifying, not because of the numbers but because they're all in one place.  We have to compartmentalize to keep this hobby.

[Ragsf15e]

5 minutes ago, Ragsf15e said:

I only have an F, but Id say it costs more like $220/hr for my ~90 hours/year and I own my hangar and only pay $2k for full insurance.  And I help in my annuals and oil changes to keep those costs down.  Nothing in aviation pencils out.  Don’t go in thinking it will.  However, getting reimbursed for some of the expenses would be awesome for you!

Don’t insure for less (or more) than actual hull value.  If you have an incident, they can pay the lower hull value and take the aircraft (which was worth more).  

 

Your hangar and maintenance costs seem low.  If you flew 100 hours, that’s only 2500 for mx and inspection.  At 200 hours, that’s only 5000 which is still low.

Edited February 28, 2024 by Ragsf15e

[LANCECASPER]

17 hours ago, SilentT said:

I see it as I have a few options:

• Pay bigger down payment and sweet talk lender into letting me insure plane (200-250k) for less (assuming 20% below insurance rate) and $670/mo insurance costs
• Buy plane at 1% increase in interest (8.5% with heloc, no need for hull ins) and fly it hull naked to build hours with liability coverage until hull ins makes more sense

Option one will never happen. Your lender will insist on being paid in full if the airplane is a total loss. They sell loans in a package and couldn't sell that one without adequate coverage. Also if you disclose that you fly it for business your rates will be much higher than you were quoted. If you don't disclose that you may not be covered. People who fly single engine airplanes who have to be somewhere on schedule tend to become victims of got-to-get-there-itis and fly in situations where they shouldn't. The accident records bear that out.

I would really re-think option two. The reason insurance rates are so high for new pilots and those new in-type is not some random reason. These categories of pilots bend up and total the airplane at an exponentially higher rate. That's just the hull portion of the policy. If your company has any sense they will demand that you carry enough liability to protect them. In addition to that you are exposing your survivors to your estate being sued and having no insurance company to defend those suits. What if you just lose an engine, land it in a field and walk away without a scratch? Without hull coverage, it will still cost you perhaps $50,000 to take it apart and get it out of someone else's property and hauled to a shop. Plus any damage to their property. Any guess what a field of corn is worth?    You will then be paying out of pocket to repair the airplane and then still be paying off your HELOC. Or worst case you total it and still owe $200,000 on the HELOC. Not a good situation. We all should have coverage not only for ourselves for innocent victims who fly with us or those on the ground. You would be at the very top of that list that needs coverage. 

I wouldn't let reimbursement factor into your decision even 1%. What if next week they decide you don't need to travel or they have downsized and eliminated your position. If you are in a position to purchase, hangar, maintain, upgrade and insure an airplane without any reimbursement then get your Private license and work on your IFR rating while considering it.

[toto]

21 minutes ago, SilentT said:

Renting planes isn't reasonable when flying 3 hours each way, and parking M-F with mins.

It might be reasonable for a few months while you rack up RG time.  I'm not sure what your total RG hours is, but it wouldn't take long to hit a 50-hour threshold that would give you an insurance break.  I've seen older Arrows that rent for the same or less per hour as newer 172s with pretty panels.

[toto]

Also - You mentioned Avemco, which ime is *much* more expensive than other carriers.  People love Avemco, they're a direct insurer, and they seem to have excellent service, but you might check with a broker to see what's out there.  @Parker_Woodruff is our resident expert.

[SilentT]

27 minutes ago, redbaron1982 said:

Is $85 for a hangar monthly fee realistic?! I'm paying $600 per month for my hangar!!

I cannot give you my experience regarding costs because I had bad luck... but what I can tell you is that when I did the math myself, the breakeven point for renting vs owning was around 150 to 170 hours per year.

I told ya low cost of living; these are hanger rates at local airport

[SilentT]

14 minutes ago, LANCECASPER said:

Option one will never happen. Your lender will insist on being paid in full if the airplane is a total loss. They sell loans in a package and couldn't sell that one without adequate coverage.

This was my thinking. The lender wants 20% down a full coverage. My thought was if on a 225k plane I put 90 down and insured for 180, the lender would still be whole, with a 25% underwater margin. 

[toto]

Just now, SilentT said:

I told ya low cost of living; these are hanger rates at local airport

I still can't quite process the word "available" next to the word "hangar" .. are these doll hangars or something?

If 1-30 are teeny tiny hangars, you should get the width measurements.  Small T-Hangars can be a little bit uncomfortable with a 36' Mooney wingspan.

[LANCECASPER]

Just now, SilentT said:

This was my thinking. The lender wants 20% down a full coverage. My thought was if on a 225k plane I put 90 down and insured for 180, the lender would still be whole, with a 25% underwater margin. 

They will want the amount financed guaranteed by coverage.

Whatever you do though don't borrow money on a HELOC to put down - that would mean you are borrowing the down payment and really don't have any equity in the airplane. You would, in effect, be borrowing 100%. They will want to see some skin in the game.

[SilentT]

6 minutes ago, LANCECASPER said:

They will want the amount financed guaranteed by coverage.

Whatever you do though don't borrow money on a HELOC to put down - that would mean you are borrowing the down payment and really don't have any equity in the airplane. You would, in effect, be borrowing 100%. They will want to see some skin in the game.

Sorry if I made that misconception. I have what ever i need in cash to put down. I can put 100 down today if i need to. My point was originally, the lender will want insurance to cover their finance amount + 20% margin. This was just one way to get the lender covered with margin, while having upper limits on coverage. The heloc was just a way to finance the airplane, without the hull requirement.

Edited February 28, 2024 by SilentT

[Vance Harral]

31 minutes ago, toto said:

You mentioned Avemco, which ime is *much* more expensive than other carriers

Historically Avemco is a lot more expensive than other carries when you have a lot of experience, but a lot less expensive when you don't.  Over the 20 years of our partnership, we have periodically cycled in new, low-time pilots with little/no complex time and/or no instrument rating.  In almost every case, we switched to Avemco for a year or two, then back to a traditional broker after the new guy gained more experience.

[SilentT]

38 minutes ago, LANCECASPER said:

 

I would really re-think option two. The reason insurance rates are so high for new pilots and those new in-type is not some random reason. These categories of pilots bend up and total the airplane at an exponentially higher rate. That's just the hull portion of the policy. If your company has any sense they will demand that you carry enough liability to protect them. In addition to that you are exposing your survivors to your estate being sued and having no insurance company to defend those suits.

I have a ton of respect for you Lan, and I mean no disrespect, but did you read my liability coverage part? I have a multi million dollar policy that doesn't exclude aviation. In no way am I flying without liability coverages. Under no circumstances! Its non-negotiable for me. Yes flying naked with hull does put me at risk of having a loss without coverage. Gear up landings are running about $50-70k from what I hear these days as an example. I do really appreciate your input though, perhaps shopping around for other insurance is a good way to go.

[LANCECASPER]

22 minutes ago, SilentT said:

Sorry if I made that misconception. I have what ever i need in cash to put down. I can put 100 down today if i need to. My point was originally, the lender will want insurance to cover their finance amount + 20% margin. This was just one way to get the lender covered with margin, while having upper limits on coverage. The heloc was just a way to finance the airplane, without the hull requirement.

For a lot of reasons most of us have had to work our way up to what we are flying today. Insurance is one of those reasons. It might be wise to get your license and then buy what you can pay for now, a $100,000 plane, that will be much less to insure, and build some time and experience. If it works out that they reimburse you take that money, put it way and in a couple years see if you still like flying.

I'm not sure what the statistics are today but when I started flying I heard that for every 10 people that started taking lessons one got their license. I think that was optimistic. Get your license and make sure this is something you want to do first.

 

[LANCECASPER]

1 minute ago, SilentT said:

I have a ton of respect for you Lan, and I mean no disrespect, but did you read my liability coverage part? I have a multi million dollar policy that doesn't exclude aviation. In no way am I flying without liability coverages. Under no circumstances! Its non-negotiable for me. Yes flying naked with hull does put me at risk of having a loss without coverage. Gear up landings are running about $50-70k from what I hear these days as an example. I do really appreciate your input though, perhaps shopping around for other insurance is a good way to go.

If that policy covers general aviation that you personally are flying it will be the first umbrella policy I've ever seen that covers that. Why wouldn't we all just do that?

People see the word aviation in the policy and don't read far enough to see that the underwriter means commercial airlines, not self-flown general aviation.

[SilentT]

4 minutes ago, LANCECASPER said:

If that policy covers general aviation that you personally are flying it will be the first umbrella policy I've ever seen that covers that. Why wouldn't we all just do that?

People see the word aviation in the policy and don't read far enough to see that the underwriter means commercial airlines, not self-flown general aviation.

Yep I'm awaiting clarification from Insurance broker, aviation and general aviation are just "not excluded". 
 

[SilentT]

10 minutes ago, LANCECASPER said:

For a lot of reasons most of us have had to work our way up to what we are flying today. Insurance is one of those reasons. It might be wise to get your license and then buy what you can pay for now, a $100,000 plane, that will be much less to insure, and build some time and experience. If it works out that they reimburse you take that money, put it way and in a couple years see if you still like flying.

I'm not sure what the statistics are today but when I started flying I heard that for every 10 people that started taking lessons one got their license. I think that was optimistic. Get your license and make sure this is something you want to do first.

 

Heard that, and that is a fair way to go. I really do appreciate the perspective. My checkride is next month, you know dpe availability and all that. Theres nothing I think about more than flying. When I'm not face down in work, I'm looking up thinking about flying.

 

[LANCECASPER]

3 minutes ago, SilentT said:

Yep I'm awaiting clarification from Insurance broker, aviation and general aviation are just "not excluded". 
 

check with @Parker_Woodruff on whether the umbrella policy covers you, since he's a Mooney pilot, an insurance broker and used to be on the underwriting side.

[SilentT]

1 hour ago, Ragsf15e said:

 

Your hangar and maintenance costs seem low.  If you flew 100 hours, that’s only 2500 for mx and inspection.  At 200 hours, that’s only 5000 which is still low.

I showed the hanger cost part. 

What am I missing on maintenance/inspections, how much should be in this bucket?

[SilentT]

3 minutes ago, LANCECASPER said:

check with @Parker_Woodruff on whether the umbrella policy covers you, since he's a Mooney pilot, an insurance broker and used to be on the underwriting side.

We've been chatting, thanks for everything lance

[Ragsf15e]

1 minute ago, SilentT said:

I showed the hanger cost part. 

What am I missing on maintenance/inspections, how much should be in this bucket?

Well for example, on another thread we went through the annual inspection cost for a simple C model- no maintenance, just inspection.  The results were 2500-3500. But that was for a C.  Let’s say you find a place that can do a k252 for $3000 (which I find optimistic).  That includes zero actual maintenance.  I spent $5k on my annual this year and had almost no issues and helped.  Then add in 3xoil changes and probably some routine maintenance.  Someone who has a K should chime in, but I expect your maintenance/inspection budget should be ~$5-7k per year for around 100 hours.  That might average out but stuff adds up fast.

[KSMooniac]

There is a lot of wisdom on this thread.  I applaud the dream scenario you're pursuing here...I would love to fly myself on work trips regularly.  I'll echo Lance's thoughts on the insurance question.  First and foremost, fully run-to-ground your existing umbrella policy and make sure it would cover your proposed activities.  You might even want something in writing, in fact, if you (and your employer) are counting on it should something go sideways in the future.  I too would be shocked if you're covered.  (and if you are, please let us know who wrote the policy!)

Secondly, I would not get too wrapped up with your hull insurance costs in Year One.  It will suck.  Badly.  The market sucks now for GA insurance, as Parker will explain.  Assuming you proceed with getting your dream 252, just know you'll be paying a bunch in the first year.  Get transition training from an expert Mooney instructor first and foremost.  Fly trips, perhaps one or two with an instructor.  Get the instrument rating as soon as you can too.  Year Two of insurance will be dramatically better.  You can buy a starter plane to build time, get the IR, etc, and sell it later and save a few grand on insurance, but the transaction and ownership costs of doing so will likely far exceed the insurance savings in the near term.  And you'll still have a higher rate without Mooney time to help...  For reference, way back in 1995-96 when I did my Mooney transition training, our college flying club required 125 hrs TT, and 10 hrs of dual.  We also had a caveat to have a mini-checkride with a "senior Mooney CFI" in the club to make sure the training was good since we had several young/low-experience CFI's building time.  That policy served the club very well... until it got reduced to 5 hrs and no mini-checkride.  Someone totaled the plane in a balked landing/go-around attempt at night after a very long day of travel and activity.  Lack of judgment and skill trying to get home...

I would not go without hull insurance or under-insure a good airplane as the risks are too high, even with your plane parked on a ramp on one of your trips.  A freak hail storm got me away from home a few years ago because I assumed the FBO was attended 24 hours (big city metro airport) and could move me inside.  Nope!  Someone can run into your plane with a ground vehicle or another plane, as happened to a member here several years ago.  Excrement happens.  Don't put your house or all your savings at risk for things out of your control.

Back to Lance's input... rates are high for new pilots for a reason.  And he's right about flying for business on a schedule adds to the risk from an insurance POV.  Putting a new pilot in a complex and capable plane AND flying for business....that has got to be peak risk.  Just know that going in, and with all of the analysis you've presented to date, I would assume you're conservative and cautious generally, and that goes a long way to keeping you alive.  There are a LOT of incremental steps to take before you're able to do what you want, safely.  Flying on a schedule to meet a customer adds a ton of pressure, as does wanting to get home to your family.  Doing that after several days of work, perhaps going at night, maybe with some weather... risk adds up quickly.  Any Mooney is capable of changing time zones and passing through multiple weather systems easily, and you'll want to have the skill, experience, and attitude to do that safely.  Will your employer and family be flexible with YOUR schedule if something is too risky?  

You have a lot to consider, as you know.  I hope it works out as you intend, because a 252 would fit perfectly (so would a J, for that matter!) and could wind up being a forever plane as you wish.

[LANCECASPER]

First year you are catching up on deferred maintenance. Anything less than $10,000 would be a pleasant surprise the first year of ownership. 

If K model Mooneys were sold new today they would be at least $800,000, probably more. So if it was new it would be maintaining a nearly million dollar piece of equipment. Add to the equation that the last K was made 26 years ago (Encore) and the oldest 252 was made almost 40 years ago. Now you're maintaining a roughly 30+ year old piece of equipment whose replacement parts are very expensive and sometimes hard to find. It can be challenging. If the mission means that dispatch reliability is the highest priority, getting an airplane that's still in production might make the most sense (Cessna 182, Cirrus, etc)