With the market the way it is right now, we've seen a huge uptick in the number of people looking to get financing on airplanes that have 9,000, 10,000, even 13,000 hours on their airframes. Normally buyers don’t even look at these airplanes, but because that's what's available, that’s what they’re settling on.
Our advice? If you are planning to finance the purchase, don't think this is going to be no big deal. It's going to be a big deal. Once you get past 10,000 hours, there are some lenders who will start to get weak in the knees. We've known of lenders who become hesitant even earlier than that. So your financing options are going to become increasingly limited as you approach that 10,000-hour threshold.
This same hesitancy does not apply to turbine aircraft—turboprops or jets. Because of the rigor those pressurized aircraft go through during their annual inspections, and the scheduled maintenance that goes into keeping them airworthy, lenders are going to be comfortable, potentially, doing deals on these types of airplanes with over 10,000 airframe hours.
If you insist on pursuing financing on an airframe with high time on it, plan on structuring the deal differently. Expect a larger down payment. Expect the amortization to be much shorter than average. Expect a loan term that's a lot shorter than normal. You’ll probably have a five-year balloon or shorter. Finally, don’t plan to achieve full amortization.
The bottom line is that aircraft ownership is not to be mythologized. Recognize that how the airplane will be used takes priority over the particular make and model with which you might become enamored. Flipping those priorities could lead you to make a mistake, a mistake you might have a hard time getting out of, if at all.
Great advice. Great rates. From helpful and responsive reps you can trust. Three good reasons to turn to AOPA Aviation Finance when you are buying or refinancing an airplane. If you need a dependable source of financing with people who are on your side, just call 800.62.PLANE (800.627.5263), or click here to request a quote.
