aviation loans and insurance - what do we need to know?

[AndyMac]

Hey all! I bet there is a lot of experience here that would be really useful to a new pilot. Would you mind answering a few questions for me on aviation loans? I apologize upfront that this isn't more organized.

• I've seen loan terms as long as 20 years - any idea what kind of loan amount a lender would want to see to offer a loan that long? Are there rules of thumb for figuring this stuff out?
• I saw one guy say he had an interest-only loan on his plane. Is this common? Thinking about a 2-4 year purchase of a C150 for time building, for example.
• any tricks for keeping insurance down? How many hours is enough hours to keep from having to pay through the nose? Do some endorsements or qualifications help more than others? (e.g. should I join a club or rent until I have a minimum X hours to say 300x on insurance etc?)

Thanks a lot - what a fantastic forum!

 

[Tampico Trauma]

Most conventional aircraft financing is 15 years.

The bank I most commonly recommend to my clients is Red River State Bank (airloan.com)

My last two with them are 5 year loans amortized to 15 years. Every 5 I either need to refinance or pay off. It’s a pretty common practice.

Insurance - BWIFly.com

The team at Bill White is awesome. They represent all the big players and a bunch of small players too. I am a 500hr PPL and pay $1200.yr for my Maule and that includes full off-airport coverage

It really doesn’t go down much until you get to 500+ hrs and instrument rated.

If you do seek quotes from either of these guys, please let them know that N9NA sent you.


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[Tampico Trauma]

Also, don’t ever consider an interest-only loan. Those are reserved for much more expensive purchases.

Also. Don’t buy a C150, or even any C currently. It is a sellers market. If you need some purchase assistance, feel forward to reach out to me at brad@pacificflyers.net


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[flyingron]

Nice thing about used aircraft is they don't depreciate like crazy. Get a conventional loan as short term as you can manage. I did ten years on the Navion originally but I paid it off early because MBNA was ****ing me and my mechanic off after the engine failure.

 

[Salty]

My favorite trick for saving on insurance on a new to you type aircraft is to find someone with that type of aircraft and do some safety piloting for them. You pay for half their gas and get to log the hours as PIC for insurance purposes.

 

[AndyMac]

Thanks everyone - very good info, and I'm really greatful for it. I will be thinking through the above!

My favorite trick for saving on insurance on a new to you type aircraft is to find someone with that type of aircraft and do some safety piloting for them. You pay for half their gas and get to log the hours as PIC for insurance purposes.

Does this work for your IFR minimum hours too?

 

[AndyMac]

Also, don’t ever consider an interest-only loan. Those are reserved for much more expensive purchases.

Also. Don’t buy a C150, or even any C currently. It is a sellers market.

Yeah - the C150 was just an example. If I do buy a plane, I'll look high and low for an amphibian. I am particularly attracted to the Lakes (Buc's and Renegades - not the bodies of water, though probably them too lol).

 

[Salty]

Thanks everyone - very good info, and I'm really greatful for it. I will be thinking through the above!



Does this work for your IFR minimum hours too?

I'm not sure what you mean. You can't log simulated IMC unless you are the one under the hood. If you're the safety pilot, then you can't be under the hood. If you can convince the owner into letting you fly under the hood, while he's safety pilot, then sure.

 

[AndyMac]

I'm not sure what you mean. You can't log simulated IMC unless you are the one under the hood. If you're the safety pilot, then you can't be under the hood. If you can convince the owner into letting you fly under the hood, while he's safety pilot, then sure.

No - I mean, and I could be completely wrong here, but don't you need 100hr PIC VFR before you can get your IFR rating?

 

[Salty]

No - I mean, and I could be completely wrong here, but don't you need 100hr PIC VFR before you can get your IFR rating?

I don't recall that requirement, but if it exists, then yes, it is PIC time.