Adam Answers 2020 Year in Review

While we can all admit that 2020 was a unique year, we’re still very thankful to be here and to have had the pleasure to answer your questions. Here are some of our favorite “Adam Answers” from the year.

Question: I own a 177RG that’s free & clear and seeking to finance up to $80K w my plane as you all offer this service?

Answer: Equity financing of an aircraft can be challenging. Lenders will need a good understanding of how the funds are to be used. If the funds are to be put back into the aircraft for upgrades, improvements, etc. we have plenty of options. This would be treated like any other purchase or refinance. If the funds are to be used to invest elsewhere or to increase cash flow, the lending options are much more limited. Generally, we would expect a lower advance and increased rates for this type of financing.

Question: I’m looking to upgrade from my Cirrus SR22 to a turboprop this year.  I’m curious if you work with any lenders that offer interest-only loans?

Answer: Yes, depending on your specific situation, we have lenders that are able to structure interest-only loans. The interest-only term typically does not exceed three years.

Question:  I am a healthy 60-year-old, retired student pilot with aspirations to purchase a used Cessna 182 for recreational travel after successfully passing my private pilot check ride. My intention at this point is to pay cash /not finance, but that decision is not based on considerations other than a personal aversion to debt. My expected budget for the purchase is $100-$175K, including any ancillary expenses associated with the purchase (inspections, taxes, fees, etc.) I am ignorant of the various considerations involved in choosing/buying an airplane and am curious about any services AOPA may offer to assist new pilots in purchasing their first airplane.

Are there benefits to financing? Is there a “playbook” on buying an airplane that AOPA provides for its members? Is there a financial advantage to waiting, i.e., is the current market in used GA aircraft likely to soften into a “buyers market?” Is it typically more cost-effective to acquire a low tech platform and update avionics or look for a plane with glass panel already installed? Other considerations not mentioned?

Answer: The biggest benefit to financing is for folks with cash flow that want to preserve liquidity. Right now, especially, we are seeing people preserve capital either for investing in the market or for a safety margin if things start to get tight, cash flow-wise, down the road. In terms of a “playbook”, we have a great resource page on our website for members trying to navigate the purchasing and financing process:

At this point, it seems unlikely for the used GA aircraft market to soften. Inventory levels of good 182s were limited prior to the COVID-19 outbreak. What we’ve seen since the COVID-19 outbreak is very few new listings of aircraft for sale, making it just as hard to find deals. Could it change down the road?  Possibly, but at the rate, things are going it won’t likely be for a while longer. In terms of acquiring a low-tech platform and updating the avionics vs. looking for an airplane with a glass panel already installed, you are almost always better off (economically) buying an airplane someone else has done upgrades on. They put the money in but won’t get it back out. We always recommend that members get pre-approved so that when you find the airplane you like you’re not going to lose out to a cash buyer.

Question: I am 58 and am a student pilot. I have set my goals to get my PPL, then my Instrument rating, followed by my MEL. I live in Southwest Florida and my mission is to fly around the Bahamas, but also do a lot of cross country flying. I have a son in Colorado. My thought process is that when the time comes to do my multi-engine training I would purchase my own plane to be trained in. I am looking for something like a 1979 Piper Seneca II. Would that be something I should consider?

Answer: I definitely think it’s a good idea to purchase an aircraft for doing your flight training – leverage the “4 Cs”. Consistency, Comfort, Control, and most importantly Cost are all big advantages.

Consistency – It’s a lot easier when you are flying the same plane and not having to learn subtle nuances of one avionics setup versus another

Comfort – When it’s your plane you have comfort by making it the way you want and knowing it’s clean, safe, and organized the way you want it.

Control – One of the challenges in flight training can be aircraft availability and scheduling. If it’s your own plane the only issue you need to coordinate is when it’s in for maintenance.

Cost – This is one of the most obvious, but flight schools make money by “grossing up” the rental cost of a plane (as well as a flight instructor). By using your own aircraft, your hourly usage rate should be much less.

Adam Meredith

Adam Meredith

President of AOPA Aviation Finance Company
Adam Meredith, the longtime president of AOPA Aviation Finance Co., died after a long battle with cancer in December 2023. He is remembered for his passion for helping fellow pilots, leading a team devoted to putting flight training and aircraft ownership within everyone’s reach.
Topics: AOPA Aviation Finance Co, AOPA Products and Services, Ownership

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