If this is your first visit, be sure to check out the FAQ by clicking the link above. You may have to register before you can post: click the register link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. |
|
|
|
Thread Tools | Display Modes |
#1
|
|||
|
|||
Glider Financing
Called AOPA last Thursday - and nope, none of their financing partners can do gliders at present. They claim that if more people start requesting it, they may be able to make it happen; but not immediately.
Sad, really - and IMHO one more reason the sport isn't growing here. A person looking for a hobby can finance a boat, an RV, a snowmobile, a motorcycle, or an airplane on MUCH friendlier terms than a glider. So that limits the pool of private owners to fanatics like me or older folks who've had time to build up a lot of home equity or other large financial resources. And this doesn't just impact buyers. It also makes it harder for every one out there that has a sailplane and hopes to sell it someday. --Noel |
#2
|
|||
|
|||
Glider Financing
In the UK it is normal for gliders to be shared between syndicates of 2 or 3 members. A syndicate of less prosperous members might buy an older glider for 8,000 dollars, and for a third of that a syndicate member can have as much fun flying as a prosperous pilot who invests 400,000 dollars in the latest supership. So pilots invest whatever they can afford. I have not heard any private owners talk about taking finance on a glider.
|
#3
|
|||
|
|||
Glider Financing
On Monday, June 10, 2013 3:35:27 AM UTC-4, waremark wrote:
In the UK ... I have not heard any private owners talk about taking finance on a glider. I believe that that is true for many cases in the USA, but the younger cohort that is in line to buy used gliders from the baby boomers, is not so affluent. The baby boomers are hoping that the new buyers will finance their purchases, otherwise there will be a shortage of buyers and a radical drop in prices. The good news is that folks will probably be able to buy a well maintained 1:40 glider for $10,000 10 years from now. Wearable avionics should drop in price as well. |
#4
|
|||
|
|||
Glider Financing
With financing you'd still have to be a fanatic to make mortgage sized payments on a low utility fringe toy.
On Sunday, June 9, 2013 6:08:27 PM UTC-4, noel.wade wrote: Called AOPA last Thursday - and nope, none of their financing partners can do gliders at present. They claim that if more people start requesting it, they may be able to make it happen; but not immediately. Sad, really - and IMHO one more reason the sport isn't growing here. A person looking for a hobby can finance a boat, an RV, a snowmobile, a motorcycle, or an airplane on MUCH friendlier terms than a glider. So that limits the pool of private owners to fanatics like me or older folks who've had time to build up a lot of home equity or other large financial resources. And this doesn't just impact buyers. It also makes it harder for every one out there that has a sailplane and hopes to sell it someday. --Noel |
#5
|
|||
|
|||
Glider Financing
I owned *TWO* LS-6s in separate partnerships. In both cases it worked out
well. Just be sure you know and respect the person you join up with and have a complete understanding of expectations. Those partnerships got me 650 hours in a ship I could not afford by myself at the time. Dan wrote in message ... With financing you'd still have to be a fanatic to make mortgage sized payments on a low utility fringe toy. On Sunday, June 9, 2013 6:08:27 PM UTC-4, noel.wade wrote: Called AOPA last Thursday - and nope, none of their financing partners can do gliders at present. They claim that if more people start requesting it, they may be able to make it happen; but not immediately. Sad, really - and IMHO one more reason the sport isn't growing here. A person looking for a hobby can finance a boat, an RV, a snowmobile, a motorcycle, or an airplane on MUCH friendlier terms than a glider. So that limits the pool of private owners to fanatics like me or older folks who've had time to build up a lot of home equity or other large financial resources. And this doesn't just impact buyers. It also makes it harder for every one out there that has a sailplane and hopes to sell it someday. --Noel |
#6
|
|||
|
|||
Glider Financing
The best way to borrow money to finance a glider is to take out a home equity loan or refinance your mortgage -- a good idea anyway as unbelievably low interest rates can't last forever.
John Cochrane |
#7
|
|||
|
|||
Glider Financing
On Monday, June 10, 2013 11:30:49 AM UTC-4, wrote:
The best way to borrow money to finance a glider is to take out a home equity loan or refinance your mortgage -- a good idea anyway as unbelievably low interest rates can't last forever. John Cochrane Yes, but the spouse would have to co-sign I believe, putting their equity at some risk (minimal I know). That conversation would be interesting (and quite loud), to put it mildly, in my household. |
#8
|
|||
|
|||
Glider Financing
On Jun 10, 8:30*am, wrote:
The best way to borrow money to finance a glider is to take out a home equity loan or refinance your mortgage -- a good idea anyway as unbelievably low interest rates can't last forever. John Cochrane John - This is true; but again you're limiting your potential buyers to homeowners who ALSO happen to have a good amount of equity. That right there is tough enough, in the wake of the financial crisis/ housing-market implosion (even if you bought near the bottom, as I did). Furthermore, home loans are tougher now. Equity is typically capped at 80% of property value, and then your mortgage amount is deducted from that. Example time: ----- $30,000 glider at 80% financing means you need to get a loan of about $27000 ($24k + a few for fees, taxes, and escrow). Let's also say you bought a $300,000 house for 10% down (5% - 15% is fairly common these days, given that its hard for people to save $60,000+ for their first home). Since your home-equity is capped at 80% of $300,000 (i.e. $240,000) you need your mortgage balance to be $213,000 in order to have enough useable equity. On a 30-year 3.75% fixed-interest mortgage, you have to be in month 117 to have paid off that much. That's _9.75 YEARS_ ----- So, before someone can get a loan to buy their first $30,000 glider (LS-4, DG-300, ASW-19/20, etc) they have to buy a home and make payments for ~10 years. Again, I state: That's ridiculous, in terms of the portion of the US population that you've excluded. I don't want to sound harsh, but perhaps those of you in your 50's and 60's in this sport need to look around at the economics of the times (OK, everyone but John Chochrane; since that's his day-job)... With wage-growth (or lack thereof) and home-prices being pumped back up to higher levels, this is not a reasonable path to glider ownership for _most_ people in their 20's or 30's. You're cutting out a huge portion of the demographic - many of whom are having fewer kids and waiting longer to get married (and thus _could_ participate actively in the sport even at that age, if they could obtain decent financing to spread the acquisition costs out). YES, you can do syndicates or partnerships. But imagine what the Boat, ATV, Motorcycle, or RV markets would look like if that was the main path to ownership for those items? Or heck, even the propeller- airplane market? I've been continuing to raise this publicly because I was half- expecting someone to stand up and tell me I'm dumb and this subject has already been resolved, and I was just unaware of the resolution. I mean, if this situation existed in the powered-airplane world, the AOPA and EAA (and airplane manufacturers) would've resolved with gusto. It just seems like an obvious situation/problem that the glider community would be interested in improving (especially for everyone who owns a glider and wants to be able to sell it someday). --Noel |
#9
|
|||
|
|||
Glider Financing
--Noel Noel: No disagreement, actually. A glider is durable and fairly easy to sell, so we should be able to borrow to finance them at reasonably low rates. (For those who don't have home equity or other resources.) I presume it's just so small a market that nobody other than Lea County Bank has developed the expertise. Maybe you should start a pilot's credit union, or similar business supplying glider loans? There are also a lot of wealthy glider pilots who understand a glider is good collateral and might want to earn more than the pitiful returns offered by bond markets these days. The glider-backed security, latest wall street fad... Seriously now. John Cochrane |
#10
|
|||
|
|||
Glider Financing
On Jun 11, 7:41*am, wrote:
--Noel Noel: No disagreement, actually. A glider is durable and fairly easy to sell, so we should be able to borrow to finance them at reasonably low rates.. (For those who don't have home equity or other resources.) I presume it's just so small a market that nobody other than Lea County Bank has developed the expertise. I know I'm verging on beating a dead horse here; but what I find fascinating (and frustrating) is that the "expertise" is _no_ different than most other aircraft loans... So there should be _several_ companies that have the necessary expertise (its not like Escrow or Title Searches or FAA Forms are different when its a glider)! Its just weird... --Noel |
|
Thread Tools | |
Display Modes | |
|
|
Similar Threads | ||||
Thread | Thread Starter | Forum | Replies | Last Post |
Aircraft Financing | [email protected] | Products | 1 | April 5th 09 08:04 PM |
Aircraft Financing | [email protected] | Owning | 36 | September 4th 05 06:07 PM |
financing | jeff ray | Home Built | 0 | November 5th 03 01:00 AM |
financing | Todd | Owning | 7 | October 19th 03 07:16 AM |
Financing | VM | Owning | 4 | August 4th 03 03:48 AM |