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Step 1: Choose the Make/Model that is Right for You
This is one of the most important decisions you will face in this process.
The aircraft should meet your personal standards of style and taste, as well
as fit into your needs and budget.
Examine
your needs:
What will you
primarily be using your aircraft for? This is one of the most important
questions you need to ask yourself. If you have a family of six and would
like to take them on vacation once a year, but you are mostly going to be
using your plane to commute sixty miles to work, you probably don't need to
own a Cessna 210 just because it will hold the whole family. In the long run
it would be much more cost effective to buy a plane more suited to your
commute and rent a plane for that big family vacation each year.
Think about
what is important to you in an airplane and make a list, arranging it from
most important to least important. This will help you determine which plane
is right for you.
Determine
your budget:
The purchase price of an aircraft is only part of the affordability. You
must also consider the cost of operating and maintaining the aircraft. Being
prepared for such a big decision will insure that you make the right one. A
worksheet for estimating hourly operating costs and engine reserves is
provided in the printable version of this checklist.
Compare
aircraft size & performance vs. operating costs
Once you have established your basic needs & budget, you can begin comparing
aircraft to see which one is right for you. A Cherokee 140 for instance has
four seats, but will realistically only carry two adults and two kids, where
as a Cherokee 180 will carry 4 adults while going a few knots faster, but it
will also cost more in maintenance, fuel & insurance. Performing a cost
comparison for each type of aircraft you are interested in will help you
narrow down the market.
To help you
compare, our website contains reviews and performance specs for each
aircraft. Once you have chosen a make/model, you should read the information
specific to that aircraft thoroughly. This will give you an idea of what you
can expect as an owner and what to look out for when buying your plane.
Do you
qualify for insurance in the plane you desire?
Your experience level as a pilot greatly determines which types of aircraft
you qualify for insurance in, as well as your yearly premiums. It is a good
idea to start making contact with an insurance company at this time. A quick
conversation with an insurance agent may save you from wasting your time
shopping for an airplane you can't get insurance in. Often times, you may
qualify for insurance after you meet a minimum requirement such as five
hours of instruction in a similar make and model. By knowing these things
ahead of time, you can be one step ahead of the game.
As you
can see there are a
lot of factors involved in choosing the right type of plane. For this reason
many aircraft buyers choose to enlist the help of a qualified aircraft
broker. This person can save you time, money and in some cases a lot of
headaches
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Aircraft Buyer's
Checklist
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Step 2: Get Pre-Qualified for Financing
Too many pilots search for the perfect aircraft, and then have it sold
out from under them while they are making their financial arrangements.
You don't want your dream aircraft to be owned by someone else!
We
recommend you get pre-qualified right now! There are many aircraft
lenders that can pre-approve you over the phone in as little as fifteen
minutes, or you can apply online. Once you have been pre-approved, you
are under no obligation to use the loan; it will just be there for you
if and when you need it.
Most
lenders require a minimum of 10% down with a 10-20 year loan. These
aircraft lenders offer a low monthly payment with outstanding repayment
terms. Some offer additional pilot incentives as well. |
Some local
banks also handle aircraft loans. Usually these lending institutions are
less experienced with aircraft loans and can often cause delays, however
this is not always the case. If you prefer to use your local bank you should
contact their lending department directly.
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Aircraft Buyer's
Checklist
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Step 3: Shop Around
Knowing how similar aircraft have been priced can be very helpful in
determining if the price of a specific aircraft seems fair. Remember,
each aircraft is different so you will have to consider all the
variables when making your comparison, keeping in mind those factors
that are most important to you.
Factors that Effect Price
Engine Time:
Engines have a limited life expectancy or TBO (Time Before Overhaul).
This number is based on when the average engine needs to be overhauled.
If you purchase a plane that has 1500 hours on an engine with a 2000 TBO,
you will have approximately 500 before you need to overhaul the engine.
You will probably want to start saving for the occasion or if you plan
on selling before that happens, you should know it may be a little
harder to sell your plane as it approaches TBO. If you purchase a plane
that has 1150 hours on an engine with a 1200 TBO, however, you should
make sure you already have enough money to perform an overhaul.
Exterior Condition:
Painting an aircraft is very time consuming and can be quite costly so
an aircraft in above average condition is worth several thousand dollars
more than one that requires paint. Corrosion is another thing to
consider. Many airplanes have it, especially if they come from humid
areas near salt water. It can often be treated, but depending on the
severity, it does reduce the value of the plane. It is always a good
idea to get a mechanics opinion on this matter.
Interior Condition:
Like painting, refurbishing the interior also requires a fair amount of
time and money. Seat covers can always help extend the life of an
interior, but a new interior adds a few to several thousand dollars
depending on the number of seats.
Avionics: Radios
play a major role in determining the value of the aircraft, adding more
than $20,000.00 in some cases. Aircraft Blue Book has a formula for
calculating this value. Vref also has a system for considering avionics
upgrades. A qualified aircraft broker can help you put these figures
into perspective.
Options/Modifications:
Many airplanes have after market modifications that enhance the beauty
or performance of the plane. It is important that these mods all have
the proper FAA paperwork and log book endorsements. Some mods increase
the value of the plane, while others improve the marketability.
Location: Don't
forget to consider the aircraft's location when determining value. You
should figure in the cost involved in getting to the aircraft as well as
what it will take to bring it home. |
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Aircraft Buyer's
Checklist
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Step 4: Research Your Aircraft
Gather all information related to your aircraft including, a complete
list of specifications, photos, maintenance history, damage history,
etc. Knowing the history of an aircraft is essential. All maintenance
should be complete and well documented. Airplanes with missing records
or major damage may still be good, but they are usually worth less
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When buying
a plane, the owner/seller should be willing to provide you with all the
information you request. You can also do a little research on your own
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Aircraft Buyer's
Checklist
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Step 5: Put a Deposit Down on the Aircraft
After you have reviewed all available information about the plane and
you feel fairly comfortable that this is the plane for you, it is time
to put down a deposit to remove the aircraft from the market. This will
secure the aircraft while you make arrangements for a pre-purchase
inspection.
Why
put down a deposit?
This tells the seller that you are serious about the plane. You are
saying that yes, I have the money to buy the plane and if it is
everything that it is represented to be, I will buy it. This gives you
first rights to the plane, meaning that the plane will not be sold out
from under you. A purchase agreement should be signed by both parties,
outlining the terms of the sale. Before sending your deposit money, you
should trust the seller, make sure you understand and agree to the terms
of the sale, and be sure your deposit is refundable. It is common for
the seller to retain a small portion of the deposit, if there were
expenses involved, but this should be clearly outlined beforehand |
Escrow
Services
If you find a plane you like, but you are not comfortable sending a deposit
to the seller, you can enlist the services of an Escrow Company. For a fee,
an escrow service will hold the money and the aircraft documents until both
parties give authorization for release. Then the money & documents are
disbursed to the appropriate parties.
Most
Escrow companies that charge for their services are insured by the FDIC.
This is not always the case, however; so it is a good idea to verify this
before you send your money to a third party
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Aircraft Buyer's
Checklist
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Step
6: Pre-Purchase Inspection
The pre-purchase inspection is the financial responsibility of the buyer
and money well spent. If there is anything wrong with the aircraft you
want to know about it before you become the one responsible to fix it. A
mechanic of your choice will be hired to be your "technical guru". He or
she will be your eyes and your advisor at this point. To minimize the
expense, we recommend you find a mechanic near the aircraft to perform
the inspection. We can help you locate a respectable mechanic or give
you a list of names in the local area for you to review.
In order
to assist the mechanic in thoroughly examining your aircraft, we will
supply the list of aircraft specifications along with a pre-purchase
inspection checklist required by many of the financing institutions.
Your mechanic will verify the spec list plus inspect the aircraft, its
engine, avionics, equipment and documentation. Afterwards, you will talk
to your mechanic on the phone about the condition of your aircraft, both
mechanical and cosmetic. It is your responsibility to make sure you
fully understand the results of the inspection. If something doesn't
make sense to you, ask questions or get a second opinion. As long as the
aircraft is found to be in the same condition as advertised, the sale
will proceed.
If
something undesirable does comes up in the inspection, it doesn't
necessarily mean the sale can't happen. It just means both sides need to
come to an agreement on a solution. The seller may opt to fix the
problem or renegotiate the price, either way; a solution is often
possible that will make both sides happy |
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Aircraft Buyer's
Checklist
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Step 7: Verify the aircraft has a clean title
If there is an old lien on the aircraft, you cannot get financing, and
worse yet that person could have a claim to your airplane. Finding this
out ahead of time could save you time and the expense of costly
attorneys' fees.
Ordering a title search
There are companies in
Oklahoma
with access to FAA records that can perform a title search for you. It
will list any liens against the aircraft or site that there are none.
Any old liens must be released by filing the correct release of lien
paperwork with the FAA, signed by the original lien holder.
All
aircraft sold by The Plane Exchange come with a clean title
Before we sell a plane, a title search must be performed. Any releases
or disclaimers needed to clear up old liens and encumbrances will be
arranged by us. You will have a clean title and a fresh start.
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