Got the cash, but prefer to finance, where?

[SilentT]

Where yall finance your planes?  Anyone got quotes lately? Looking at a 200-200k plane. 

Edited February 6 by DanSmith3

[Parker_Woodruff]

Many of my clients seem to like Buckholts State Bank, WeFlorida Financial, Red River State Bank, and First Pryority Bank.

 

I'll also note that the above banks don't seem to give me hassles as an insurance broker.  There are a few banks that are a total pain to insurance brokers and I've had to go to war with at least one of their servicing companies lately (I/we lost, but it was the principle of the matter that was worth fighting).

[Hank]

I used my local credit union.

[PilotX]

I used Banterra.

[Pinecone]

I used Dorr Aviation.

They brokered the financing and got me a very good rate.  And they even gave me a keyring engraved with my N number when the deal closed.

My contact there was Alex Howe - ahowe@dorraviation.com

[PeteMc]

I used Dorr Aviation over 30 years ago.  So if they are still around that's saying something. 

And if you talk to them.  Ask them why I didn't get an engraved keyring like @Pinecone got!!!!!  

ADDED: I went back and looked.  I worked with Bob Howe.

 

 

Edited February 6 by PeteMc

[Danb]

Same Dorr aviation and Alex as Terry mentioned 

I didn’t get a damn keyring either 

[Greg Ellis]

Same here for Dorr Aviation...I want my keyring they owe me from 17 years ago.

[Bolter]

I used Airfleet back in 2011.  Looking at their website, several of the people I worked with then, are still there, which I consider to be a good thing.  Assuming they match the terms you get from someone else, I would endorse them for the customer service.  

[acekng1]

I also used Dorr, just over a year ago.  Bob Howe was my contact and was great to work with.  I highly recommend Dorr.  I also got the keychain with my N number!

[Pinecone]

I actually worked with both Alex and Don.  I think they are interchangeable.

 

[geoffb]

I used Dorr for both Mooneys.  It's the easy button

[Hamburglar]

I used Dorr and they were extremely easy to work with. Unfortunately I haven't gotten a keychain yet but if I do that will be a bonus.

[Schllc]

What kinda rates are going around now?

I financed my first plane about 8 years ago and the rate was 5.5%, can’t even imagine what the rates are now. 

[amillet]

https://usaircraftfinance.com/

[LANCECASPER]

On 2/10/2024 at 9:10 AM, Schllc said:

What kinda rates are going around now?
I financed my first plane about 8 years ago and the rate was 5.5%, can’t even imagine what the rates are now. 

 

When I was 22 in December 1985 I bought my first airplane, a 1981 Cessna 172, and financed it through Cessna Finance @12.5% (about 3.5% over Prime)  and made double payments to get it paid off ASAP. 

Cessna Finance financed my next few airplanes, a Grumman Tiger (in 1989), a Cessna 172 RG (in 1992) and a Mooney 231 (in 1993) and as the prime rate kept coming down and my track record with them was good, my rates kept coming down. 
Mooney Financial Services (Harley Davidson Credit) financed a new Bravo in 1996 at 8%, which was under Prime Rate at the time.
Thankfully I haven't had to do that since. Aviation is expensive enough without interest.
 

 

[Pinecone]

AOPA finance calculator is showing 7.1 - 9.99%.

 

 

[geoffb]

That's lower than I would have guessed.  Was pushing to pay off mine, but now I've got CDs and treasuries paying more than the interest on the plane note.

[daytonabch04]

I refinanced mine end of last year at 6.99% through USAF Aircraft Finance.  Before my refinance I had 4.25%  

[jaylw314]

I financed with Lake Michigan Credit Union (formerly Pilot Bank of Florida) about 8 years ago at 4.0% with 15% down payment

[A64Pilot]

I was wondering why at this time if someone had the cash why they would finance as it’s real tough for investments to beat finance rates.

Back three years or so ago I financed the house at 2% and a car at 1.89% when I had the cash to buy because investments were running at least double the finance rate, and as the house is a thirty year loan it’s probable that ROI over time will be higher than 2%.

But to beat todays finance rates are tough to do. So if you have the cash, why finance now?

Is the intent to pay it off quickly?

[wombat]

<Joke mode on>

Maybe he just knows how to invest better than you and can achieve investment returns that beat current rates easily?

[BravoWhiskey]

Finance only when money is cheap and/or if you have to…

I used Banterra.  

[A64Pilot]

On 2/23/2024 at 1:46 PM, wombat said:

<Joke mode on>

Maybe he just knows how to invest better than you and can achieve investment returns that beat current rates easily?

Possible, but as an old man watching it seems that those higher returns come at a higher risk, and I’ve seen that not work so well, not uncommon actually.

Except for unusual instances it’s non sensical for investments to return in excess to loan rates. That happened during Covid with the Government loosening the money supply to the point of essentially zero percent prime, last time that happened I think was 08, both of course to stimulate the economy. The 80’s of course were well horrible, let’s hope we don’t get that kind of inflation again.

I was just wondering why is all. I can understand the not wanting to watch a whole lot of money disappear for example, that had a lot to do with me not paying cash for the car / house because because my gut feeling has always been if you can pay for something, do so, but it was hard to go against the fact that 2% interest is arguably “free” money.

I didn’t know if inflation or anything else was skewing the thinking was all. An argument can be made too I think that the current rates aren’t historically high, nor are they likely to go down much in the near term.

[SilentT]

51 minutes ago, A64Pilot said:

Possible, but as an old man watching it seems that those higher returns come at a higher risk, and I’ve seen that not work so well, not uncommon actually.

Except for unusual instances it’s non sensical for investments to return in excess to loan rates. That happened during Covid with the Government loosening the money supply to the point of essentially zero percent prime, last time that happened I think was 08, both of course to stimulate the economy. The 80’s of course were well horrible, let’s hope we don’t get that kind of inflation again.

I was just wondering why is all. I can understand the not wanting to watch a whole lot of money disappear for example, that had a lot to do with me not paying cash for the car / house because because my gut feeling has always been if you can pay for something, do so, but it was hard to go against the fact that 2% interest is arguably “free” money.

I didn’t know if inflation or anything else was skewing the thinking was all. An argument can be made too I think that the current rates aren’t historically high, nor are they likely to go down much in the near term.

Cash Flow and liquidity; ultimately that's always the answer

Think of financial swap instruments, trading fixed income for variable. 

Sometimes diverting cash or leaving cash to investment grade tax advantaged accounts, or protecting liquidity is more valuable than the 1% ish difference between investments and loan risk. Loans seem to be in the 7.25-7.5% range, investments are beating that and have been, but not always true. Generally you can expect 6% so making more (recent history), or losing not much (1%) average, is worth a small risk to some to have immediate liquidity.