The COPA Guide
To Buying an Aircraft
37th Edition
– August 2011
Copyright Canadian Owners
and
Pilots Association 2011
The Canadian Owners & Pilots Association
71 Bank
Street –
7th Floor, Ottawa, Ontario K1P 5N2 Canada
Contents
Part I
An Airplane of Your Own? Scope of
this Guide
Used Certified Aircraft New Certified Aircraft Owner Maintenance Aircraft
Ex-Military Types
& The Limited
Category
US Light
Sport Aircraft Amateur builts
Ultralights
Aircraft Kits & Plans Foreign Aircraft Pressurized
Turbine?
Which Type is Right for You?
Who Can Own a Canadian Aircraft? Finding an
Aircraft
Contacting a Seller
Out
of Ten?
Inspecting the Aircraft Fly Before You Buy How much is it worth?
Flying Junk
How much will it
cost to own? Aircraft
partnerships
Making an offer to purchase Giving the Seller a Deposit
Title search and liens
Some Details about Foreign
Aircraft Keeping It Foreign Registered? Taking Delivery
Escrow
Completing the
Sale
Taxes
Aircraft type training
Insurance
Aircraft Financing
Aircraft Brokers & Dealers
Useful Resources
Aircraft Type Clubs
Aircraft Purchase Checklist
Part II
Articles on Buying an Aircraft:
Buying Your First
Aircraft? Be Patient! By Darin and Lisa Graham
The First Year
of Aircraft Ownership by Darin and Lisa Graham
Affordable Flying - Partnerships and
Engine
Overhauls
Affordable
Flying – Partnerships
Affordable Flying - Getting Along in Partnerships Affordable Flying – Appreciating Depreciation Affordable
Flying – When
Buying a Used Aircraft
Aircraft Prices
in 2007 – Where Are They Going? By Adam Hunt (written
in June 2007) Understanding Aviation Insurance by Herb
Cunningham
What You Need to Know About
Aircraft Brokers and Dealers by Garth Wallace
Part III
Forms:
Partnership Agreement Sample #1
Partnership Agreement Sample #2
Offer to Purchase
Aircraft Bill of Sale
Receipt for Aircraft
Purchase
The COPA Guide to Buying an Aircraft
Part I
An Airplane of Your
Own?
Most pilots learn to fly on rented
aircraft. After earning their pilot’s
licence they
continue to rent airplanes, often
from the same school at which they learned to fly. For many pilots
the
shortcomings
of renting quickly become
apparent – you can’t take the
plane away without
paying a minimum
charge per
day,
even
if it is just parked at
destination. Other
shortcomings of renting include a very limited number of types available to rent,
that
the
plane may not
be available when you want and
even that
some rental aircraft may be a bit worn out and not very lovingly cared
for.
At some point most pilots start dreaming of the advantages
of owning their own aircraft. Just
think, a myriad of
different types that
you could possibly own, fly whenever you want –
the aircraft will
be always available. Owning can be a lot cheaper
than
renting, especially if you fly a lot,
also the more flying time you acquire the safer
pilot you will be. And you can maintain
it and
equip it the way that you want to.
It would be yours!
Of course there are disadvantages,
too – when it breaks you would have to fix it or pay to
have it fixed.
Owning may be more
expensive than renting,
especially if you don’t fly very much. You have to consider things that the renter-pilot
doesn’t, like where to store the plane, who to
get to maintain it and
so on.
For most pilots the choice
is easy – owning beats
renting for them. It
is true that
most pilots
who once own an airplane don’t
happily go back to renting again!
This COPA Guide
is designed to help you
understand
what is involved in buying
your own
airplane – to take the
mystery out of the process. Any pilot
can own an airplane
– the greatest
barrier
should be the cost, not learning how to buy an airplane!
Scope of this Guide
This guide is the newest version
of a long-standing and
very popular COPA Guide. The original
book was entitled The COPA Guide to Buying
a Used Aircraft in Canada and
dealt exclusively with
buying used, certified
aircraft in Canada.
This version has
been
expanded and discusses
buying new and used aircraft,
certified, amateur-built,
owner-maintenance category,
ultralights,
warbirds, kits and foreign
aircraft. There are lots of categories to choose from!
Suggestions for
improvements to this COPA
Guide are welcome!
COPA updates and rewrites
its COPA Guides on a regular
basis to keep them up to
date and relevant. Send your
suggestions for
improvements to benefits@copanational.org.
NOTE
This guide contains information of a general
nature only.
It should not be
considered a definitive document.
Use of this
guide does not make COPA
responsible
for
legal action taken against
you. Individual
circumstances involving aircraft, and aircraft
sales and the law vary greatly.
Ensure that you read and
understand the current CARs before buying
and
flying! For information
that applies to your individual
circumstances consult an aviation lawyer.
Note on Links: Blue links in this COPA
Guide will lead you
to external webpages and places
within the Guide itself. Green links will take to you pages in the “Members
Only”
section of the COPA website.
Your membership number and last name “all in capital
letters” are required
for access to these pages.
Used
Certified Aircraft
Certified
aircraft have a standard Certificate
of Airworthiness (C of
A) and therefore meet all the applicable certification requirements.
Most pilots learn to fly on certified aircraft,
so those are most familiar to them... Importing and exporting
certified aircraft is a fairly simple venture in
Canada.
Certified aircraft
include popular light airplanes such as
the
Cessna 150, 152, 172, Piper
Cub and Cherokee, Beechcraft Bonanza, Mooneys, Maules and other
well known brands.
This category also includes certified gliders,
helicopters,
balloons, airships and even
some certified gyroplanes.
These are factory-produced
aircraft and they must have their maintenance release signed by an
AME after maintenance work is completed.
Certified airplanes
have very predictable handling characteristics – they are
stable and generally non-demanding to fly compared
to some ultralights and home builts.
New
Certified Aircraft
If you
have decided to buy a factory new certified aircraft congratulations! This
is definitely an easy way to go! You won’t
have to worry about liens
and title searches, pre- purchase inspections and other factors
that are important
when buying a used aircraft.
Your new aircraft
will come with a warrantee that will cover any defects
for the first year or more. Also, new airplanes are not usually “high-maintenance”, unlike some
older aircraft.
Your new aircraft
will likely be well equipped with state-of-the-art avionics and the latest in safety and comfort features.
What
more could you ask
for?
The downside in buying
a new
aircraft is that they are expensive!
Not only is the purchase price higher
than a used aircraft,
but the insurance premiums
will be proportionally high as
well. This can
make operating a new
aircraft a
lot more expensive than operating an
older
model of the same type.
The other factor that you will have to
consider is depreciation.
New aircraft lose
their value, just like new cars
do. For example, a 1999 Cessna
172R lost 28% of its value since new,
between 1999
and 2004 or an average of almost 6% per year.
Diamond Katanas lost
56% of their value between 1995 and 2004 or
about 6% per year! For more information on depreciation
see
the article at the end
of this book entitled Appreciating Depreciation.
Owner
Maintenance Aircraft
O-M aircraft is a new category in Canada and
it is unique in the world
right
now. No other country allows O-M aircraft! The O-M category is for
older certified aircraft including many “orphaned aircraft” that are no longer supported
by
their manufacturers.
This category allows an owner, who
is a pilot, to sign the maintenance release and
to use non-certified
parts on the aircraft. The
main aim is to keep
older planes flying and
some wonderful things are being done in this category.
O-M aircraft
operate with a Special Certificate
of Airworthiness – Owner
Maintenance as their
flight
authority.
Currently O-M
aircraft
are not permitted in US
airspace and cannot
be returned
to its previous category – a definite consideration if you are thinking of
buying an aircraft in this
category. This situation does
not look like it will change in the near future.
If this
category interests you
please refer to The COPA Guide to the Owner Maintenance Category, a book that offers complete
information on putting aircraft in this category, maintaining them and flying them.
The
balance of
this guide will just provide
information about buying O-M aircraft.
Ex-Military
Types & The Limited Category
Who hasn’t thought about streaking across
the countryside in their own T-33
or splashing down in a lake somewhere in a float-equipped
UTVA-66? Military aircraft have a romance all their own that
lures
many
aviators.
Under the new
CAR rules introduced
by
exemption in
March
2002 many ex- military aircraft can
now be owned and flown for
recreational purposes.
The
rules are pretty straightforward
and
basically if you
can show Transport Canada that you can maintain it then you can own it and
fly
it. These aircraft
operate under a Special
Certificate of Airworthiness – Limited.
Currently the rules are contained
in an exemption to
CAR STD 507 Appendix F. COPA has a new
book that is a useful introduction to these aircraft called the COPA Guide to the Limited Class thatexplains the category and how it works.
Under these rules, all ex-military and
other non-type certified
aircraft in this
category are divided into different groups with regard to their maintenance requirements:
Group 1 consists
of gliders, balloons, piston-powered
rotorcraft, basic
training and communication
aeroplanes,
light transports, and
equivalent aircraft
types
(total horsepower
below 1000 BHP). Aircraft in this category are maintained by an
appropriately qualified
AME.
Group 2 consists
of turbine-powered
rotorcraft; World War II era aircraft,
including fighters,
medium bombers and transports; basic jet
trainers; advanced
piston- powered trainers;
Korean War
era aircraft, including first generation jet fighters;
and equivalent aircraft types. Aircraft
in this category are maintained by an
AME with an appropriate Restricted
Certifying Authority (RCA) or
by
an appropriately qualified Approved Maintenance Organization
(AMO).
Group 3 consists
of all aircraft
not included in Groups
1 or 2. This includes jet fighters
and other similar types.
Aircraft
in this category are maintained
by
an appropriately qualified Approved Maintenance Organization (AMO).
It is worth
noting that many “ex-military aircraft” don’t come
under the rules
for the Special Certificate of Airworthiness –
Limited.
Aircraft such as the Harvard,
Tiger
Moth and Chipmunk all have Type Certificates and
are
eligible for standard Certificates of Airworthiness because they are
certified aircraft.
Check out the paperwork
requirements carefully while you are researching the aircraft you
are
interested
in.
Amateur Builts
Buying a used amateur built
aircraft is often a good
way
to get a lot of performance for a reasonable price. It is
also a great way to
find an affordable helicopter
or gyroplane. Many people buy used amateur-built
aircraft because
they
want an interesting
aircraft
that they can maintain themselves, but who
don’t have the time
available
to build one of their own from
plans or from a kit.
Amateur built
aircraft are
subject to pre-cover and pre-first
flight
inspections from
an MD-RA Inspector before they get
their flight
authority for the first
time, so there is quality control
in their construction. They fly under
a Special Certificate
of Airworthiness
– Amateur
Built. Even if you buy a used
amateur built
aircraft the owner is permitted to do all the work on the aircraft and
also sign the maintenance release for the work completed.
There is a huge variety of aircraft that
fit into this category – airplanes,
helicopters, gliders,
balloons, airships
and gyroplanes to name some possibilities.
Non-certified
amateur built
fixed-wing and
rotary-wing aircraft will no longer be limited by weight
or by
passenger
occupancy. Read article April 2009 Weight off shoulders of Amateur Builders.
Specific reference to
aircraft weight
or occupancy limits
and in the case of lighter than air aircraft, buoyancy or cubic capacity limits
were simply removed from the existing exemption
Section 549.01
of the CARs and Chapter 549
of the Airworthiness
Manual. Although this
new amendment is not available
on TC’s website as of the writing of this article. The referenced
document
can be found at: http://www.tc.gc.ca/civilaviation/regserv/affairs/exemptions/docs/en/1298.htm
Appendix C that came into effect
in 2002.
Once completed and
flying,
amateur built aircraft comply with
the
same flying rules that govern
certified aircraft.
COPA has a guide that gives
lots of information on amateur-built aircraft The COPA Guide to Amateur Builts. Reading this
book is a must if you
are considering buying an amateur-built.
Ultralights
Until 2005 ultralights had
been the fastest growing segment
of aviation
in Canada, since
2005 certified aircraft held
that
honour. New ultralights added to the Canadian Civil fleet still account
for a large proportion
of the aircraft
registered each year.
For some people, ultralights
are
the only affordable form of flying available.
Other pilots could afford a bigger
and more expensive
aircraft
but enjoy the simplicity of open
cockpit “low-and-slow flight”
that is the hallmark of ultralight
flying. That
said there are some very fast and
cross-country capable ultralights being flown in Canada.
There is
no doubt that ultralights are
great fun to fly and are relatively inexpensive
to own and maintain.
CAR 602.29 and
the Transport Canada Ultralight Transition Strategy currently govern ultralights.
Once incorporated, these
rules will all become part
of the CARs and will be found
in the CAR 603 and 605 series. The only permitted
uses for ultralights are
private recreational
flying and commercial
flight instruction, rental
and towing hang
gliders. Other
commercial
uses such as crop spraying, aerial
photography, towing
gliders, carrying freight
or passengers
for
hire are not permitted.
The Canadian
ultralight category is
quite different from
that
found in the USA, although
the US is finally catching up to Canada with its
Light Sport Aircraft
Category. It is also quite different from the European FAI “Microlight” category.
Canadian
ultralights come in two flavours – Basic Ultralights
(BULA) and
Advanced Ultralights
(AULA).
Basic Ultralights
are
the original ultralights. They were
first developed in the mid-
1970s, not by shrinking conventional airplanes, but
by
putting a motor on an
Easy Riser biplane hang glider.
Today in
Canada, the rules have evolved
over
time and basic ultralights
may currently have one or two
seats,
weigh up to 1200 lbs take-off weight
and have a stall speed
of 39 knots (45 mph) or less.
Basic ultralights are not permitted to carry passengers, although they may be flown with two pilots on board
or with a student and instructor. Helmets
are
required when flying basic ultralights. There are no specific maintenance requirements for
basic ultralights, but protecting your investment
and yourself
means taking good
care of your
basic ultralight. Basic ultralights
are
all
registered
in the series
starting with C-I.
Advanced ultralight airplanes
(AULAs) started as a new category here in
Canada in 1991. They are single or two
seat airplanes that comply with the Light
Aircraft Manufacturer’s Association
of Canada (LAMAC) publication called Design Standards for Advanced Ultralight Aeroplanes DS10141.
Note at the time of publishing LAMAC
President
retired, the Association is
in
restructuring and LAMAC website is unavailable until further notice.
AULAs must
be purchased as
a kit or complete aircraft.
For
quality control reasons they cannot
be built from plans.
Changes were made to the category in June 2001 and,
as a result, AULAs can now weigh
up to 770 lbs for single
seaters and 1232
lbs for two seaters. Under
the revisions to the category,
powered parachutes
and
hang glider-
based
trike ultralight
designs
may
now qualify as AULAs.
AULA aircraft
types
are
added to the TC Listing of Models Eligible
to be Registered as Advanced Ultra-Light Aeroplanes (AULA) when the manufacturer signs a Declaration of Compliance (D
of C) for the type, a
copy of the
Manufacturer Specified Maintenance Program and
TC will review and may accept it for the list. The manufacturer
of an
advanced
ultra-light aeroplane is also responsible
for
the "after market" support
for
the continuing "fit for flight"
condition of their aeroplanes.
Individual
AULAs get their
status from a Statement of Conformity (S of C) that the manufacturer
issues when the plane is
built.
This S of C indicates that
the
plane conforms to
the standard for the type. The
S of C allows the AULA to be
registered with Transport
Canada as
an advanced ultralight.
AULAs cannot be modified without the
written
authority of the manufacturer and
they must
be maintained in accordance with the
manufacturer’s instructions. If an
AULA is modified without permission from the
manufacturer or not maintained as
required then its Certificate
of Registration will
be cancelled.
These aircraft may be re-registered in
the
basic ultralight category, if they qualify to
do so, and will lose their passenger carrying status.
Note that an AULA that
has a gross take-off weight between
1200 and
1232 lbs cannot revert to the BULA category currently and will be grounded
if it fails to continue to meet the AULA requirements,
unless it can fit into the Limited Class. Maintenance records
are required are for all
AULAs.
Used AULAs
must have a Fit for Flight
Form (FFFF)
completed by the previous
owner or else they cannot be re-registered in the name of
the new owner
as an AULA. See the
Ultra-light
Transition Strategy for more details on this requirement.
AULAs can carry a passenger, if the
pilot is qualified to carry a passenger. This currently requires at least a
Pilot Permit - Ultralight
Aeroplanes with the Passenger
Carrying Rating. Helmets
are
not required
to be worn in AULAs,
but may be a good idea depending on
the design.
Starting at
their
inception in 1991, AULAs were registered in the C-F or
C-G
series, but since January 1997 they have been
registered in the C-I series,
like
all other ultralights.
There are still quite a number
around that have C-F or C-G
registrations.
COPA has a guide to
ultralights
that
provides lots more information
on this category or
aircraft. Have a look
at the COPA Guide to Ultralights for the complete story.
Aircraft
Kits & Plans
There are currently over 700
different types
of aircraft that can
be built from kits
or plans! That means
that there is probably something there that will suit just about any potential
airplane owner.
In Canada, kit or
plans built aircraft
have to meet the
requirements for
either the amateur built
or ultralight categories. Have a look at the preceding paragraphs
for information on the limits of those
categories.
The main advantage of
buying a kit or plans and
building
your
own aircraft is
that
you
will get exactly what you want and you will
know everything about how
it is constructed. After
all, you will have pulled
all
the rivets, laid up all the fibreglass or clamped all the glue-joints yourself! Building your own
aircraft can also
save
you a lot of money – you get a lot more performance at a lower cost by providing your own
labour.
There are disadvantages to
building your own airplane. It takes
time to build an airplane – usually more than you expect. Most manufacturers
publish a “number of hours
to build”. Some of these numbers are quite fanciful, while others
are
based on actual
times that it has taken
real
builders to complete the aircraft.
Most manufacturers use
the time that it takes
an experienced builder, with all the proper tools working full time to complete
the kit. No matter
how simple the kit, most first-time builders
find that they
need to double or even triple the
estimated time
to build. Consider realistically how much
time that you will
be able to spend
on building per week.
How long will it take to
complete your
dream plane?
Aircraft kits vary greatly in
how long the manufacturer says it will take to
complete them. Some
simple ultralights can be built in
50-100
hours, while more complex projects
can take 5000 hours or more.
A builder who can work on the project fulltime could realistically put in
2000 hours in a year. If you are working at a job fulltime
and building your plane on the weekends you may find that
500 hours per year
is as
much as you can
find to build. Under those conditions
that
kit that the manufacturer
says
will take 2500 hours to build (and
will actually take you
5000 hours) will take ten years to complete! Can you hang in
there that long?
Other factors to consider are tools
and space. Do you
have heated space big enough to build
in?
If it isn’t heated then you
won’t be doing much building in the
Canadian
winter and that is when most airplane building happens! Do you have the tools you need
or can you get them? Did you
factor tools into the cost
that you
were expecting?
Perhaps the most important
factor in building an
aircraft is “spouse support”. If
your partner and
other family members
aren’t 100% supportive of your airplane building then you
will probably have a serious
problem in finding the time and
money to keep building. All factors
to consider!
There are many factors to think
about when assessing if you have the
ability to
build an aircraft. Aside
from time, space, tools
and spouse support there are skills,
ability and training. Assessing your
capabilities is a large topic. There
are
many good books that describe the challenges of
building your own aircraft and
how to deal with them. It
is recommended
that
if you are considering building your own aircraft
that you read one
of those texts.
One source of this information
is Choosing Your Homebuilt – T he One Y ou’ll Finish and Fly by former COPA Director
Ken
Armstrong.
There is no doubt that one of
the most memorable moments in
any pilot’s
flying career is the first flight in an
aircraft that
they built themselves.
Almost
all aircraft builders
say,
after
that first flight, that it
was all worth it. The COPA
Guide to Amateur- Builts has lots more
information on the considerations for
building an aircraft
in this category
Foreign
Aircraft
What if
the perfect
aircraft for you isn’t in Canada? In many cases
it is possible to import an aircraft.
The first step is to
ensure that it will qualify for a flight
authority in Canada. Certified aircraft
are
usually not a problem,
especially if they are certified in
the USA. Make sure that aircraft
is eligible for a Canadian type certificate. Other aircraft need to fit into the ultralight,
amateur built or limited
categories.
Any aircraft that
fits the Basic Ultralight definition
of two seats or less, 45 mph or less stall speed, 1200 lbs or less gross weight
and the minimum useful load calculation can be brought into
Canada and
registered as a BULA.
US Light
Sport Aircraft
If they meet
the
definition of an amateur-built (51% rule)
E-LSA (Experimental
LSA), they can
be
brought in as
an amateur-built; this
class is not weight
limited
but data must be available
to prove that the aircraft can be operated at
the
chosen weight. They
can be brought in
as
an AULA, including
restrictions to 1232 pounds and
no additional allowance for floats. They can also
be brought in as
a Limited Class,
with no weight restriction (other than
that
specified by the manufacturer – LSA are limited to 1320 pounds or 1430 on floats) but with a significant requirement to be maintained by
an AME. In the Limited Class, LSA
fall under Group A
for
determining operational and
Group 1 for maintenance conditions.
AULA are more difficult,
since this category does not exist outside Canada. If the aircraft is a listed AULA and manufacturer
is willing to issue you
a Statement of Conformity for the aircraft
then you can
register
it as
an AULA without too
much
difficulty. Without
a S of C issued by the
manufacturer you
cannot
register it as an AULA.
Importing amateur built aircraft
used to be impossible in
Canada.
Due to COPA initiatives
through CARAC, this is now
possible! Foreign amateur built aircraft
that meet the Canadian definition and
have flown 100 hours airframe time are
eligible,
subject to an inspection
when they enter Canada. The
complete rules for importing
an amateur built aircraft are located in CAR STD 507
Appendix C and there is
lots more information in
The COPA Guide to Amateur-Builts
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