Question: I have a 177RG which is free and I am looking to finance up to $ 80K with my plane as collateral …. do you all offer this service?
Answer: Equity financing of an aircraft can be difficult. Lenders will need to fully understand how the funds are to be used. If the funds need to be put back into the plane for upgrades, upgrades, etc., we have plenty of options. It would be treated like any other purchase or refinance. If the funds are to be used to invest elsewhere or to increase cash flow, lending options are much more limited. Generally, one would expect a lower advance and higher rates for this type of financing.
Question: I want to switch from my Cirrus SR22 to a turboprop this year. I’m curious if you work with lenders who offer interest only loans?
Answer: Yes, depending on your particular situation we have lenders capable of structuring interest only loans. The term of interest only generally does not exceed three years.
Question: I am a healthy 60 year old retired student pilot aspiring to purchase a used Cessna 182 for recreational travel after successfully completing my private pilot check flight. My intention at this point is to pay cash / no finance, but this decision is not based on considerations other than personal aversion to debt. My planned budget for the purchase is $ 100-175,000 including all incidental expenses associated with the purchase (inspections, taxes, fees, etc.). I am not familiar with the various considerations involved in choosing / buying a plane and I’m curious about the services AOPA can offer to help new pilots buy their first plane.
Are there any advantages to financing? Is there a “playbook” on purchasing an aircraft that AOPA provides to its members? Is there a financial benefit to be expected, ie, is the current used GA aircraft market likely to turn into a “buyer’s market?” Is it generally more profitable to acquire a low-tech platform and update the avionics or research an aircraft with a glass panel already installed? Other considerations not mentioned?
Answer: The biggest benefit of financing is for people with cash flow who want to preserve their cash flow. Right now, in particular, we see people saving their capital either to invest in the market or for a margin of safety if things start to get tight, in terms of cash flow, down the road. In terms of a “playbook”, we have a great resource page on our website for members trying to navigate the buying and financing process: https://finance.aopa.org/aviation-finance/first- time-buyers
At this point, it seems unlikely that the GA used aircraft market will slow down. Inventory levels for vouchers 182 were limited before the COVID-19 outbreak. What we’ve seen since the COVID-19 outbreak is very few new announcements of planes for sale, making it just as difficult to find deals. Could that change along the way? Maybe, but at the rate things are going, it probably won’t be for a long time. In terms of acquiring a low-tech platform and updating the avionics versus finding an aircraft with a glass panel already installed, it’s almost always (economically) better to buy one. aircraft that someone else has upgraded on. They put the money but don’t get it back. We always recommend that members be pre-approved so that when you find the aircraft you like, you won’t lose out to a cash buyer.
Question: I am 58 years old and I am a student pilot. I set my goals to get my PPL, then my instrument qualification, followed by my MEL. I live in southwest Florida and my mission is to fly over the Bahamas, but also to do a lot of cross country. I have a son in Colorado. My thought process is that when the time comes to do my multi-engine training, I will buy my own plane to train. I’m looking for something like a 1979 Piper Seneca II. Could this be something I should consider?
Answer: I really think it’s a good idea to buy an airplane to do your flight training – take advantage of the “4 Cs”. Consistency, comfort, control and most importantly the cost are all big pluses.
Consistency – It’s much easier when you fly the same aircraft and don’t have to learn the subtle nuances of one avionics setup over another
Comfort – When it’s your plane, you have the convenience of doing it the way you want it and knowing it’s clean, safe, and organized the way you want it.
Control – One of the challenges of flight training can be the availability and scheduling of aircraft. If this is your own plane, the only problem you need to fix is when it’s under maintenance.
Cost – This is one of the most obvious, but flight schools make money by “grossing up” the cost of renting an aircraft (as well as a flight instructor). By using your own aircraft, your hourly usage rate should be much lower.