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Help with buying a used plane.... the actual process


GravityKnight

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Hey guys,

 

I kind of accidentally hijacked that other thread....

 

 

So I should have some money to look at planes within a week. Looking for a Kitfox 5 or later (or similar, Avid, Aerotrek etc.).

 

I guess in this thread, I was hoping I could get some advice with the actual buying process. I value the opinion of many on this forum, and a lot of you guys have a lot more experience here than me- since I have, well, never bought an airplane before.

 

I'm not overly concerned about checking out the plane mechanically, I mean I'm more confident about that part of it than the paperwork end of things.

 

How does the paperwork part of this process work? Registration, airworthiness cert, main records, annual date... etc. ? How does this part normally play out? What all am I looking for there? What gets signed at the time of the sale? 

 

 

Any help in that are would be appreciated! I would imagine it's fairly straightforward but I'd like to go into it with some confidence when I do find a plane.

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You NEED to be concerned about checking the plane mechanically. Of all the things you need to look out for, the physical condition is #1. #2 is ensuring the title is clean.

 

You'll need a mechanic to tag along and do a pre-buy inspection. They will check the physical condition, and the logbook status. The airworthiness certificate is easy for them to look at as well, but if it doesn't look right, the local FSDO can help. Registration is simple, just look here.

 

After that, put it in an LLC. It makes it easier to take in partners without having to re-register anytime there is a change, and selling the plane is as simple as selling the LLC.

 

Sales tax: some states require sales tax, others don't. Often casual sale of aircraft (not tied to a dealership) is an exclusion from aircraft sales tax.

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Interesting. My guess is that I will find something out of state. Something far enough away I'll be trying to fly out there one way, inspect, pay and fly it home (assuming it checks out). I guess when I find something, I'll then look for someone local to the plane to help inspect it? Is that a logical assumption to do all that at once? 

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Just because you buy something out of state, it doesn't mean you avoid the sales tax. It's actually called "sales and use tax". The use tax applies to every transaction that is not a service, but sales tax is leveraged against it, which is why you don't pay the tax twice.

 

Any time I see a plane listing that says "IN ANNUAL" or "JUST ANNUALED", I start asking questions. If you were going to sell it, why did you have it annualed? To me, it seems like they found something wrong and are hiding it. The other red flag is lookbooks with large gaps in history. If it's pretty distant in the past, it doesn't mean much, but if it's a large gap that is a few years old, I will start asking questions.

 

As for prebuy inspections, do it with someone you trust, or a big name shop. Prebuys are a few hundred dollars as it is essentially an inspection without servicing the airplane, but, it might save you a fortune in hidden damage.

 

It is up to you how far you take it.

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AOPA has some info available to the public on the nuts and bolts.

http://www.aopa.org/Pilot-Resources/Aircraft-Ownership/Tips-on-Buying-Used-Aircraft#reg

You'll need an 8050-1 and 8050-2 which you can get from the FSDO or some aircraft dealers have them.

Rather than rehash all the details, check out the URL. Some is not necessary, some is. It will tell you.

If the airplane is not new, you may want to do a title search.

There are AOPA and other webinars on this subject.

You'll want some insurance before you fly it, at least liability.

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AOPA has some info available to the public on the nuts and bolts.

http://www.aopa.org/Pilot-Resources/Aircraft-Ownership/Tips-on-Buying-Used-Aircraft#reg

You'll need an 8050-1 and 8050-2 which you can get from the FSDO or some aircraft dealers have them.

Rather than rehash all the details, check out the URL. Some is not necessary, some is. It will tell you.

If the airplane is not new, you may want to do a title search.

There are AOPA and other webinars on this subject.

You'll want some insurance before you fly it, at least liability.

Even if the airplane is new, do a title search. It is for your protection. I bought a new 2006 CTSW in 2007. When I sold it 18 months later The buyer did a title search which showed a lien against it from the distributor that I got the airplane from. It was no problem getting a letter to release the lien, but it was there and I didn't catch it.

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Even if the airplane is new, do a title search. It is for your protection. I bought a new 2006 CTSW in 2007. When I sold it 18 months later The buyer did a title search which showed a lien against it from the distributor that I got the airplane from. It was no problem getting a letter to release the lien, but it was there and I didn't catch it.

Thanks for the correction, Tom, I hadn't thought of that. As I recall, a title search is under $100.
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AOPA has some info available to the public on the nuts and bolts.

http://www.aopa.org/Pilot-Resources/Aircraft-Ownership/Tips-on-Buying-Used-Aircraft#reg

You'll need an 8050-1 and 8050-2 which you can get from the FSDO or some aircraft dealers have them.

Rather than rehash all the details, check out the URL. Some is not necessary, some is. It will tell you.

If the airplane is not new, you may want to do a title search.

There are AOPA and other webinars on this subject.

You'll want some insurance before you fly it, at least liability.

 

Thanks for the resources, I have been reading though this. Most seems like common sense. This one thing confused me a little:

 

The Aircraft Registration Application, AC Form 8050-1, is not available for download. You must use an original Aircraft Registration Application, AC Form 8050-1. FAA will not accept photocopies or computer-generated copies of this form. Aircraft Registration Applications may be obtained from the Aircraft Registration Branch or your local FAA Flight Standards District Office (FSDO). If you use a P.O. Box as a mailing address, you must also provide your street or physical location on the application.

 

 

So this has nothing to do with the seller correct? When I have bought an airplane, and gotten it home.. I then need to go to my local FSDO and get this form there. It says 'an' original registration application. I guess I'm confused why this can't be downloaded. Is this like a title for a vehicle in a sense?

 

thanks

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Hello Gravity Knight,

 

I can tell you what I did...

 

Before you buy;

1. Get loan approval from finance company of your choice

2. Get insurance quotes (very important to do this before hand)

3. Check your state government law on Tax on leisure purchase

4. Pre-purchase inspection (super important, not everyone are like Roger, Tom, and Eric)

 

When you make your decision; (5~8 happens simultaneously)

5. Purchase Agreement need to be created and agreed by both parties and signed.

http://www.aopa.org/Pilot-Resources/Aircraft-Ownership/Sample-Purchase-Sales-Agreement

6. Send earnest money to the seller via your finance company.

7. FAA bill of sales need to be filled out by the current owner and forward it to your finance company

8. Current owner need to re-register the aircraft with your name through FAA

9. Go get your airplane with the rest of the money (make sure insurance kicks in)

10. Fill out sales tax form, then state will send registration form

http://www.colorado.gov/cs/Satellite/Revenue/REVX/1251567995893

11. ELT registration need to be updated

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If you are uncomfortable going it alone there are aircraft brokers out there who specialize in finding what you are looking for. They will cost some money but may save you more later.

 

AOPA offers an excellent title and escrow service. I would not be giving money directly to the seller.

 

Pre-buy needs to be done by someone familiar with make and model.

 

No damage history may or may not be the truth. Same with claims of no corrosion.

 

Pictures are nice but  seeing the plane in person will give you a whole new perspective.

 

It has been 11 years since I bought my last used airplane so my advice may not be accurate. 

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Please explain. I may be in the market for a used plane next year.

You said "my advice may not be accurate", and I said it is. That's all I meant, just take your own advice and you will do fine :).

 

Also, remember one more thing. What may be interpreted as malice, might just be ignorance. What that means is if you find a spar crack a day after you buy a plane, the person you bought it from might not have known either. Be stern, but don't be an ass.

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