Buying an aircraft − or a share in an aircraft − can be a daunting prospect, and it pays to do your homework
Aircraft buying guide
Scan through the classifieds of Pilot and you’ll be presented with dozens of new and used aircraft for sale, from tourers to classics, factory-made or homebuilt. If you’re a new pilot, with a freshly acquired PPL in hand and looking to buy your first aircraft, this might seem a daunting prospect. While others may know exactly what they’re looking for, either from joyful past experiences with a friend or relative’s aircraft, or their own training perhaps, it is always prudent to do your homework before parting with your cash.
Buying your own aircraft or putting together a syndicate to buy an aircraft enables you to experience a much wider range of aircraft types. Clubs have to train on their aeroplanes to get the maximum use out of them, and trainers, while fine in their way, limit your skills and can become a little dull. If you want to fly aerobatics, tailwheel or−especially−vintage, the likelihood of finding something suitable on the fleet of a club near you is small.
Some pilots aspire to instrument flying and perhaps longer trips over water, for which a complex single or twin might be the ideal aircraft−but again, not the kind of thing available from all clubs. Pilot has spoken with some of the experts to provide
Financing the deal
How about a new, factory built aircraft? Uk-based merchant bank, Close Brothers, has been financing the general and business aviation industry in Britain for over four decades after first opening their doors in 1976 as Air and General Finance Limited. Andy Blundell, Director of Close Brothers Aviation and Marine told Pilot that “we can finance a wide range of aircraft, including light piston aircraft, turboprops, helicopters, executive corporate jets and air ambulances. We also finance vintage aircraft and are a strong supporter of historic aviation in the UK.”
Close Brothers Aviation and Marine will finance brand new aircraft direct from the manufacturer, or pre-owned aircraft that are being sold from dealers, brokers or via private sale. Andy explains the process. “The finance facilities are structured by way of a loan with security by way of a mortgage over the aircraft. The mortgage will be registered at the CAA or another national aviation authority, and arranging the financing for the purchase of private aircraft is usually a straightforward process. Typically, it will proceed like this;
1 The borrower provides information about themselves and their prospective aircraft to the lender.
2 The lender performs an appraisal of the aircraft’s value and undertakes its own internal credit analysis. The lender would normally expect the borrower to undertake their own pre-purchase survey of the aircraft.
3 The lender and borrower agree terms on the structure of the transaction.
4 The lender performs a title search based on the aircraft’s registration number, in order to confirm that no liens or title defects are present. The lender then prepares the documentation for the transaction, which includes dealing with the vendor, insurers, maintenance organisations and (where applicable) lawyers.
5 At closing, the loan documentation is executed and then funds are transferred.
Andy goes on to say that, “The sheer variety of aircraft available is another factor to consider and a reason why it’s important that each opportunity is assessed individually. We have helped customers purchase thousands of aircraft, ranging from small flying club aircraft to mid-sized corporate jets, historic warbird aircraft, two-seat private helicopters to large corporate and air ambulance helicopters.”
Facilities are usually structured over five to seven years, with final ‘balloon’ payments usually an option, depending on customer requirements and the specific aircraft being financed. Finally Andy adds that “All aircraft must be comprehensively insured, with the lender’s interest in the aircraft noted on the policy.”
you with a guide to buying an aircraft, new, used or kit built, so whether you’re buying your first aircraft, third or even fourth, we can help you to avoid some of the common pitfalls and buy with good, sensible consideration.
The general aviation marketplace suffered during the credit crunch, sales of new light aircraft dropping off. It was a slightly different story with used aircraft sales, and Andy Twemlow from AT Aviation reports that the closing stages of the recession saw “artificially low pricing on a wide range of aircraft giving rise to some crazy deals. Good quality PA-28-140 Cherokees and Cessna 150s selling for under £8k; good Warriors and 172s changing hands at less than £20k−and if you purchased then, you have probably made a better investment than the stock market could return.
“All sectors of the used market are now growing well and today we have an interesting supply and demand problem.”
Brian Kane of Heli Air and British European Aviation Limited agrees that when the credit crunch caught up with general aviation around 2011, the dip in sales of new aircraft meant that there’s been a lack of low-hours aircraft on the market available to buy over the last couple of years. This trend has continued following the fall of in the value of Sterling against the US dollar, and Brian states “Most popular light helicopters and aeroplanes− Robinson, Piper and Cessna aircraft−come from the USA and most are purchased for pleasure rather than business usage,” and that “buyers, in the main, are still saying that they will wait for currency recovery.”
David Morris of Just Plane Trading very much concurs that buyers are being more cautious with the uncertainty of Brexit but, that said, “certain planes through time have always moved, most notably the trusty Cessnas and Pipers which have, to this day, always traded well.” This
means that it’s perhaps even more important to make the right choices now and invest in an aircraft that will hold its value in years to come.
As a general guide, we have outlined some of the key considerations using the advice given by our experts.
Plan your usage. What will you use the aircraft for, and where would you like to go? This is something that Brian Kane insists upon, often sitting with prospective buyers for hours to help them decide what they want the aircraft for. David Morris also advises customers not to run before they can walk. “We resist selling complex, difficult to fly machines to low-time pilots. Regularly we have sold a 172 to a pilot convinced they needed a high performance machine, and they thank us for it.”
Set a budget for both the purchase of the aircraft and the running costs thereafter. Plan where you will keep the aircraft and the costs associated with that. David adds that “there is no cheap way of defying gravity and whilst the asset values of an aircraft don’t go down like a car, the cost of keeping the machine in the air can bring surprises.”
Do your research. Are there any common problems that your choice of aircraft can suffer from? Many of the second-hand aircraft on the market will have high hours. They may be overdue for a re-cover, sorting out hidden corrosion, wear and fatigue, and/or engine overhaul, yet still pass their annual inspection and fly well. The price usually reflects this.
Identify brokers, agents or individuals who have your chosen aircraft advertised for sale and then talk to them about the aircraft. Where has the aircraft been kept? Have you seen it in use by other pilots? Andy Twemlow suggests trying to gain an understanding of the general condition of the aircraft before wasting your time journeying around the UK and, sometimes, Europe.
Andy also advises that having knowledge of the ownership and service history of a particular aircraft helps buyers enormously in making that decision to purchase. Like all good brokers they vet their sellers to check on the background of any aircraft that they list for sale to gain an understanding of how the plane was used, stored and maintained, thereby giving it an accurate appraisal. Brian Kane agrees and Heli Air will check for all documentation along with the maintenance status to see what’s been done, and what’s due.
Once you have made your decision, have a look at some examples. All of our experts advise that a pre-purchase inspection is one of the single most important actions to undertake, and while AT Aviation can provide inspections at any of their engineering centres, finding an independent engineer to accompany you is a must. Andy goes on to say that as well as a physical inspection, AT will complete a records search to check the aircraft’s AD/SB status, and also a title search to ensure there is no outstanding loan or finance on the aircraft. You can check the online National Aircraft Register, the G-INFO database, to ensure that the aircraft is what it claims to be, and you could even contact the owner to check that it’s legitimately for sale.
Obtain insurance quotations. There are many aircraft insurers out there, some of which advertise in Pilot, and others can offer you specialist insurance as a pilot, Stein Financial Insurance being an example.
Following the pre-purchase inspection, a test flight is also crucial. Andy Twemlow advises to “always try before you buy. You must be able to fit in the plane and be comfortable on longer trips.” Being able to demonstrate the capability of an aircraft from a pilot’s perspective is of paramount importance.
Beware bargain-price old aeroplanes, or at least go in with your eyes open. They may be cheap for a reason – generally huge maintenance bills. This applies particularly to complex singles and twins, where the bills can be enormous, especially when everything is old and worn. You need to be sure any complex type has been maintained correctly (and note that constant speed props have a six-year overhaul life). Remember also that there aren’t that many engine overhaul businesses that will take on a vintage engine; those that do can have an eighteen-month waiting list.
Finally, Brian Kane advises that the prospective buyer must always be careful. All too often aircraft will be offered for sale that appear to be exceptionally good value and the naïve buyer parts with a deposit which is never seen again, and neither is the aircraft. Always use a reputable broker, and ask around for feedback. For more useful external guidance, the following websites are recommended:
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