Buying An Aircraft

The purchase of an aircraft represents a major commitment that should be approached carefully and cautiously, especially when buying a used aircraft. For many aircraft owners, it represents the largest single lifetime investment next to buying a home. Quite often, the purchase price of an aircraft approximates or exceeds the price of a new home.

Particularly when buying a used aircraft, it is wise to have the selected aircraft inspected by a qualified person or facility before you complete the transaction. The condition of the air- craft and the state of its maintenance records can be determined by persons familiar with the particular make and model. Pre-purchase inspections should be performed by a Federal Aviation Administration (FAA) certificated airframe and power plant mechanic (A&P) or an approved repair station. The Buying an Aircraft Checklist (Figure 2-1 at the end of this chapter) is a suggested list of items to consider when purchasing an aircraft.

Selecting the Aircraft

One of the most common mistakes in purchasing an aircraft is to make a decision too quickly. Take the time to analyze your requirements carefully and be realistic. Consider the typical flight loading, trip distance, and conditions of flight, then compare aircraft. If possible, rent the type of aircraft that interests you to determine how well it meets your requirements. Keep in mind that the biggest expense of owning an aircraft is not always the initial purchase price.

Where to Look

Once you have chosen the type of aircraft that will fit your needs, shop around and do some pricing. For retail and wholesale price information, check with an aviation trade association, bank, other financial institution, or Fixed Base Operator (FBO) for the latest aircraft bluebook values. There are several good publications available that advertise aircraft for sale. Your local FBO can be very helpful as you look for the right aircraft.

m CAUTION: Try to keep your search for an aircraft close to home. If a problem pops up after the sale, you may not find the long-distance seller as willing to help you as someone closer to home.

Factors Affecting Resale Value

Know the major factors that affect resale value. Generally speaking they are:

• Engine hours—perhaps the most common in- fluence on resale value. The closer an engine is to its recommended time between overhaul (TBO), the lower the value. There are many factors that affect engine health, and a high-time engine is not necessarily bad. Regular use helps keep seals and other engine components lubricated and in good shape.
• Installed equipment—such as avionics, air conditioning, deicing gear and interior equipment. The most valuable equipment is usually avionics, which can easily double the value of some older aircraft. The newer the technology, the higher the value of the aircraft.
• Airworthiness directives (ADs)—issued by the FAA for safety reasons. Once issued, owners are required to comply with the AD within the time period allotted. It is important to look at the AD history of an aircraft and ensure the logbooks show compliance with all applicable ADs. ADs are discussed in greater detail in chapter 9.
• Damage history—it may be difficult to locate a complete damage history for an aircraft. Any aircraft with a damage history should be closely scrutinized to ensure it has been properly repaired in accordance with the applicable Title 14 of the Code of Federal Regulations (14 CFR) parts and recommended practices.
• Paint/Interior—as is the case with homes, paint can be used to give “tired” aircraft a quick face- lift. Check new paint jobs carefully for evidence of corrosion under the surface. Interior items should be checked for proper fit and condition.

Overhauls

Be careful of the terminology used to describe engine condition. Do not confuse a top overhaul with a major overhaul, or a major overhaul with a factory remanufactured “zero-time” engine. A top overhaul involves the repair of engine components outside of the crankcase. A major overhaul involves the complete disassembly, inspection, repair, and reassembly of an engine to specified limits. If an engine has had a top or major overhaul, the logbooks must still show the total time on the engine, if known, and its prior maintenance history. A “zero-time” engine is one that has been overhauled to factory new limits by the original manufacturer and is issued a new logbook without previous operating history.

Aircraft Records

Aircraft records maintained by the FAA are on file at the Mike Monroney Aeronautical Center in Oklahoma City, Oklahoma. Copies of aircraft records are available for review in CD format or paper. For information on ordering and costs, contact the FAA Civil Aviation Registry Aircraft Registration Branch (AFS-750). Copies of aircraft records may also be requested online. Visit www.faa.gov and select the “Aircraft Registration” link. There may be other records on file at federal, state, or local agencies that are not recorded with the FAA. AFS-750 contact information is in the FAA Contact Information appendix on pages A1–A2 of this handbook.

Make sure the following documents are available and in proper order for the aircraft:

• Airworthiness Certificate
• Engine and airframe logbooks
• Aircraft equipment list
• Weight and balance data, placards
• FAA-approved Airplane Flight Manual (AFM) and/or Pilot’s Operating Handbook (POH)

m CAUTION: Missing documents, pages, or entries from aircraft logbooks may cause significant problems for the purchaser and reduce the value of the aircraft.

Aircraft Title

The Federal Aviation Act requires the FAA to maintain a recording system for aircraft bills of sale, security agreements, mortgages, and other liens. This is done at AFS-750, which also processes applications for, and issues, aircraft registration certificates. The two systems are linked together because you must prove ownership in order to be entitled to register an aircraft.

“Clear title” is a term commonly used by aircraft title search companies to indicate there are no liens (e.g., chattel mortgage, security agreement, tax lien, artisan lien) in the FAA aircraft records. Title searches for the aviation public are not performed by AFS-750; however, the aircraft records contain all of the ownership and security documents that have been filed with the FAA.

AFS-750 records acceptable security instruments. In addition, some states authorize artisan liens (mechanic liens). These also need to be recorded. Be sure to check your state’s statutes regarding liens.

m CAUTION: Federal liens against an owner (drug, repossession, etc.) may not show up on your title search.

State law determines lien and security interests. Although there is no federal requirement to file lien or security instruments with the FAA, the parties to these transactions can file their qualifying documents with AFS-750.

You may search the aircraft records, or have this done by an attorney or aircraft title search company.

m CAUTION: FAA registration cannot be used in any civil proceeding to establish proof of ownership.

There is no substitute for examining the aircraft’s records to secure an ownership history and to determine if there are any outstanding liens or mortgages. This procedure should help avoid a delay in registering an aircraft.

Filing Ownership and Lien Documents

Filing ownership and lien documents constitutes formal notice to the world of the ownership and security interests recorded. A person who engages in a financial transaction involving a U.S. registered aircraft who does not have a title search performed is taking a risk. Under the law, that person will be charged with knowing what is on file with the FAA, even if he or she does not actually know. A simple title search will show the federally recorded owner- ship and lien status of any aircraft registered in the United States.

When a Lien Is Recorded

When a security agreement or lien document is recorded, the FAA sends an Aeronautical Center (AC) Form 8050-41, Conveyance Recordation Notice, to the secured party. This notice describes the affected aircraft (and other eligible collateral such as engines, propellers and air carrier spare parts locations). It also identifies the recorded document by its date, the parties, the FAA recording number, and date of recordation. This recordation notice is sent as a confirmation that the lien has been recorded and added to the aircraft record.

Releasing a Recorded Lien

The FAA Form 8050-41 may be used as a release if the secured party signs below the release statement and returns the form to the AFS-750. The FAA may also accept as a release a document that describes the affected collateral, specifically identifies the lien, and contains a statement releasing all lienholder rights and interest in the described collateral from the terms of the identified lien. The release document must be signed in ink by the secured party and show the signer’s title, as appropriate.

A new AC Form 8050-41 may be requested by con- tacting AFS-750. You will need to describe the aircraft and the lien document sufficiently to identify the specific document needing release. AFS-750 contact information is in the FAA Contact Information appendix on pages A1–A2 of this handbook.

Aircraft Documents

There are numerous documents that should be reviewed and transferred when you purchase an aircraft.

Bill of Sale or Conditional Sales Contract

The bill of sale or conditional sales contract is your proof of purchase of the aircraft and will be recorded with the FAA to protect your ownership interest.

Airworthiness Certificate

The aircraft should have either FAA Form 8100-2, Standard Airworthiness Certificate, or FAA Form 8130-7, Special Airworthiness Certificate.

Maintenance Records

The previous owner of the aircraft should provide the aircraft’s maintenance records containing the following information:

• The total time in service of the airframe, each engine, and each propeller;
• The current status of life-limited parts of each airframe, engine, propeller, rotor, and appliance;
• The time since last overhaul of all items installed on the aircraft that are required to be overhauled on a specified time basis;
• The identification of the current inspection status of the aircraft, including the time since the last inspection required by the inspection program under which the aircraft and its appliances are maintained;
• The current status of applicable ADs, including for each the method of compliance, the AD number, revision date, and if the AD involves recurring action, the time and date when the next action is required; and
• A copy of current major alterations to each airframe, engine, propeller, rotor, and appliance.

Manuals

Manufacturers produce owner’s manuals, main- tenance manuals, service letters and bulletins, and other technical data pertaining to their aircraft. These may be available from the previous owner, but are not required to be transferred to a purchaser. If the service manuals are not available from the previous owner, you can usually obtain them from the aircraft manufacturer.

Airworthiness

Two conditions must be met for a standard category aircraft to be considered airworthy:

• The aircraft conforms to its type design (type certificate). Conformity to type design is attained when the required and proper components are installed that are consistent with the drawings, specifications, and other data that are part of the type certificate. Conformity includes applicable Supplemental Type Certificate(s) (STC) and field-approval alterations.
• The aircraft is in condition for safe operation, referring to the condition of the aircraft with relation to wear and deterioration.

Maintenance

14 CFR part 91, section 91.403, places primary responsibility upon the owner for maintaining the aircraft in an airworthy condition. This includes compliance with applicable ADs. The owner is responsible for ensuring that maintenance personnel make appropriate entries in the aircraft maintenance records, indicating that the aircraft has been approved for return to service. In addition, the owner is responsible for having maintenance performed that may be required between scheduled inspections. Inoperative instruments or equipment that can be deferred under 14 CFR part 91, section 91.213(d)(2), will be placarded and maintenance recorded in accordance with 14 CFR part 43, section 43.9.

Pre-Purchase Inspection

Before buying an aircraft, you should have a mechanic you trust give the aircraft a thorough inspection and provide you with a written report of its condition. While a pre-purchase inspection need not be an annual inspection, it should include at least a differential compression check on each cylinder of the engine and any other inspections necessary to determine the condition of the aircraft. In addition to a mechanical inspection, the aircraft logbooks and other records should be carefully reviewed for such things as FAA Form 337, Report of Major Repair or Alteration, AD compliance, the status of service bulletins and letters, and aircraft/component serial numbers.

Light-Sport Aircraft

Light-sport aircraft is a growing sector of the general aviation community, specific to the United States. Several resources are available if you have questions about acquiring a light-sport aircraft. You can contact the FAA Light Sport Aviation Branch (AFS-610), your local FAA Flight Standards District Office (FSDO), or the Experimental Aircraft Association (EAA) for assistance. Chapter 6 discusses light-sport aircraft in greater detail. AFS-610 contact information is in the FAA Contact Information appendix on pages A1–A2 of this handbook.

Amateur-Built Aircraft

There are several unique considerations when purchasing an amateur-built aircraft. The prospective buyer is advised to have someone familiar with the type of aircraft check the aircraft of interest for workmanship, general construction integrity, and compliance with the applicable 14 CFR parts. You can contact your local FAA Manufacturing Inspection District Office (MIDO) or FSDO to speak with an FAA aviation safety inspector (ASI) who can explain the requirements for experimental certification.

Things to consider when buying an amateur-built aircraft:

• Examine the Special Airworthiness Certificate and its operating limitations. This certificate is used for all aircraft that fall under experimental status and states for what purpose it was issued. The operating limitations specify any operating restrictions that may apply to the aircraft.
• Check the aircraft maintenance records of the airframe, engine, propeller, and accessories. Under 14 CFR part 91, sections 91.305 and 91.319(b), all initial flight operations of experimental aircraft may be limited to an assigned flight test area. This is called Phase I. The aircraft is flown in this designated area until it is shown to be controllable throughout its normal range of speeds and all maneuvers to be executed, and that it has not displayed any hazardous operating characteristics or design features. The required flight time may vary for each type of aircraft and is covered in the operating limitations.
• After the flight time requirements are met, the owner/operator endorses the aircraft logbook with a statement certifying that the prescribed flight hours are completed and the aircraft complies with 14 CFR part 91, section 91.319(b). Phase I records are retained for the life of the aircraft.
• In Phase II, the FAA may prescribe Operating Limitations for an unlimited duration, as appropriate.
• Before taking delivery of the aircraft, make a final pre-purchase inspection. Ensure that the Special Airworthiness Certificate, Operating Limitations, Aircraft Data Plate, Weight and Balance data, Aircraft Maintenance Records, and any other required documents are with the aircraft. If the Special Airworthiness Certificate, Operating Limitations, and Aircraft Data Plate are surrendered to the FAA by the original builder, you may not be able to recertificate the aircraft because you are not the builder.
• Amateur-built aircraft require a condition inspection within the previous 12 calendar months. This inspection requirement and those who are eligible to work on the aircraft are addressed in the Operating Limitations of that particular aircraft.

Military Surplus Aircraft

Certain surplus military aircraft are not eligible for FAA certification in the STANDARD, RESTRICTED, or LIMITED classifications. The FAA, in cooperation with the Department of Defense (DOD), normally performs preliminary “screening” inspections on surplus military aircraft to determine the civil certification potential of the aircraft. For aircraft eligible for potential certification, you must “show” the FAA that your aircraft conforms to the FAA-approved type design (type certificate), and that the aircraft is in a condition for safe operation (airworthy). This means you are required to provide the technical data necessary to support this showing.

For example, certain military surplus aircraft may be eligible for certification in the RESTRICTED category and modified for special purpose operations. Military-derived RESTRICTED category aircraft may be manufactured in the United States or in a foreign country, but military surplus aircraft must be surplus of the U.S. Armed Forces. The FAA bases its certification on the operation and maintenance of the air- craft including review of the service life of the aircraft and any modifications.

When an aircraft has been modified by the military, you must either return the aircraft to the originally approved civil configuration, or obtain FAA design approval for the military modification. This is accomplished through the STC process. The STC process is also necessary for modifications to the aircraft for a special purpose operation (e.g., crop dusting). Once the FAA determines that the military surplus aircraft conforms to the FAA- approved type design, as noted in FAA Order 8130.2 (as revised), Airworthiness Certification of Aircraft and Related Products, and military records, you may apply for an airworthiness certificate.

Since no civil aircraft may be flown unless certifica- ted, you should discuss this with an ASI at your local FSDO, who can advise you of eligible aircraft and certification procedures. An additional source for advice on amateur-built and surplus military aircraft is the EAA.

Figure 2-1. Buying an Aircraft Checklist. This checklist is intended to provide a suggested list of items to consider when purchasing an aircraft. It is not an all-inclusive list, and if you have any questions, you should consult with an experienced aviation professional prior to purchasing an aircraft.