Ad­ver­tis­ing fea­ture

Buy­ing an air­craft − or a share in an air­craft − can be a daunt­ing prospect, and it pays to do your home­work

Pilot - - CONTENTS - www.closeas­set­fi­nance.co.uk/close-broth­er­savi­a­tion-and-marine

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:

Buy­ing an air­craft of your own opens up a world of choice as to how and where you fly

Air­craft new and old: CZAW Sportcruis­er and (fore­ground) 1960s Jodel D150

He­li­copters have huge ‘land any­where’ ap­peal

The Europa is a pop­u­lar and ef­fi­cient home­built

An­other home­built, this time with par­tic­u­lar ap­peal to those in­ter­ested in aer­o­bat­ics, the Acrosport 2

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