Saturday, May 1, 2004
Secrets For Buying Undervalued Aircraft
Whether you equate it to the search for the Holy Grail or a textbook example of caveat emptor, with a little perseverance and luck, you can still find a great deal on the airplane of your dreams—if you know where to look
Whether the stories are real or just urban legends, sooner or later, every hangar-talk session turns to a tale of someone finding that cherry-red Bonanza sitting in a barn in the middle of nowhere and the farmer selling it for $5,000. While stories like this are much more fiction than fact, a question remains: How can you find that undervalued gem that will ensure your place in aircraft buyer’s lore? Unfortunately, it’s not as easy as it used to be. " />
She shared the story of a guy who sold a Boeing Stearman to a pilot who turned out to be a drug dealer. The original owner was able to buy back the Stearman at auction for a lot less than he originally sold it for.
Sheehan said that the various government branches hold these auctions at many locations around the country. Listings of dates, locations and items to be auctioned can be found on their Website at www.treas.gov/auctions/customs.
While you’re waiting for an auction, Thomas suggests that you contact a reputable broker/dealer. His company has a waiting list of prospective buyers who are all looking for a certain price on a certain airplane.
“If someone is on that list, we call them first before we advertise it,” he says. “You can get first shot at a great deal, if you’re patient.”
Of course, in the meantime, you have to routinely scan the Yellow Pages and other publications. Now and then, you can uncover some gems in all those endless lines of copy. And some of those “deals” often pop up on aircraft based in another country.
“There are deals outside of the U.S., for sure,” says Marion Hope, president of Hope Aviation Insurance. “Just remember, from an insurance standpoint, that you never want to take delivery of any aircraft in a foreign country.”
Why? “There are a lot of reasons, but the biggest is that it might not have a valid U.S. Airworthiness Certificate and it’s not N-numbered,” he adds. “Both can cause an owner huge problems when it comes to insurance. If you really want a foreign airplane, just have it delivered over here and make sure that all the paperwork is in order before you sign anything.”
Having the airplane on U.S. soil isn’t only important for insurance, but also for getting financing. “U.S. banks will only loan you money on an airplane that is physically located in the U.S.,” adds Jim Blais, V.P. of the Aircraft Division for Eaglemark, part of Harley-Davidson Financial Services. “The aircraft also must be registered with the FAA before any loan can be processed.”
Page 3 of 4