Buying or renting an airplane: What’s best for you?

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Ask a Lender
October 8, 2017 | Updated October 9, 2017


Key Points

Advantages of buying vs. renting an airplane

  • Buying: Plane always available
  • Buying: Tax breaks available if plane used for business purposes
  • Renting: May be less expensive than buying
  • Renting: Many plane types to choose from

Deciding whether to purchase or rent an airplane can be a difficult decision. Maintaining an airplane can be expensive, but rental fees can also add up. When does it make sense to rent and when should you buy your own plane?

Buying a Plane

The most obvious advantage of buying your own plane is the freedom such a purchase affords. Maintaining and operating an airplane can be expensive, however.

If the plane is used for business purposes, you can save money by taking advantage of tax benefits. You may be able to write off the plane’s depreciation each year. You also may be able to purchase a business-related plane with pretax dollars. If use of your plane is considered a hobby, however, it isn’t eligible for the same tax breaks. The IRS’ list of nine factors can help you determine whether use of your plane constitutes a hobby or a business.

Airplane Rentals

Renting can be a viable (and often cheaper) alternative to purchasing a plane, but the downside is that you’re giving up a certain amount of flexibility. You’ll have to work around a schedule, competing with other pilots who want to rent the limited fleet of airplanes available. On the other hand, you’ll have a number of planes to choose from rather than being stuck with the one you own. If you want to go on a solo flight, you can opt for a two-seater, or if you want to take the family on a vacation, you can rent a four-seater.

Making the Decision

Now that you have a rundown of the differences between buying and renting an airplane, how do you choose which option to pick? Here are some factors to consider:

  • Scheduling. If you’re still learning to fly, it’s standard practice to use your flight school’s airplanes. The school will charge a rental fee, and you must also pay for gas and the flight instructor’s time. Buying an airplane as a student pilot makes it easier to schedule flight trainings, as you’d otherwise have to compete with other students to rent the school’s planes when they’re available. Owning a plane can be expensive, however — hangar and tie down fees, fuel and other expenses add up.
  • Frequency. As a general rule, it may make sense to purchase an airplane if you’ll be flying it 100 hours or more per year. Less than 100 hours, and it may be more economical to rent. If you’re only going to fly your plane a couple days a month, renting almost certainly makes more sense.
  • Flying clubs. Joining a flying club can be a relatively economical way of renting an airplane. These clubs typically charge reasonable rental rates to members. The Aircraft Owners and Pilots Association (AOPA) has a tool on its website for finding flying clubs throughout the country.
  • Co-ownership. Co-owning an airplane with one or more other people is a way to share costs and make airplane ownership more affordable. Be sure to draft an agreement in advance that stipulates how you will split the costs. Be sure to also discuss the schedule for flying the plane.
  • Depreciation. If you finance an airplane purchase, and make a relatively small down payment, you run the risk of your loan going underwater, meaning your plane is worth less than what you still owe the bank. That means if you need to sell the plane for any reason, what you’ll get for it won’t cover what you still owe. You’ll have to pay the bank the difference out-of-pocket. Aim for a down payment of 20 percent or more.

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