Lease or Finance

Lease or Finance?
For most pilots in light-sport aviation, purchase of an ultralight or airplane is a matter of determining how to come up with the thousands of dollars it takes to do so.
Well, thanks to efforts by Float Planes and Amphibs, the equation may soon change. The company is already sending out packages to businessmen in ultralight aviation offering a lease program.
Businesses often lease their capital equipment as an efficient use of their resources. In the world of automobile sales, leasing now represents a significant percentage of all vehicles delivered. General aviation uses leases, too, though it hasn’t become as big a part of their sales, according to some experts. Will it work in ultralight aviation?
Following are sample numbers for an airplane as featured in this pilot report. Now, each lease is going to be somewhat different, but this will get you closer to the idea and you can evaluate its value to you.
Leases have some distinct advantages. Most obviously, you don’t have to write one big check up front. Americans are used to buying goods on programs involving monthly payments. Why should recreational aircraft be any different?
With a lease, you don’t have to put much money down. Conversely, a bank loan will typically require a 10 to 20% down payment. Leasing only asks a payment or two up front and even this is applied to future lease payments. Plus you’re financing 100% of the cost rather than 80 to 90%, leaving you more money for other uses.
Because you’re not affecting your credit rating the same way as a bank loan, you might be able to tackle a larger purchase or more optional equipment than you would otherwise. Most leasing programs like the one Float Planes and Amphibs offers through their affiliate, Qubic Leasing, will cover the total of your airplane purchase to include options, accessories, and even instruction.
Leasing a Quicksilver 2S On Full Lotus Floats
Murray Halperin, sales and marketing manager for Qubic Leasing, provides the following information.
A fully assembled Sport 2S with Full Lotus Floats and ultraviolet-protective paint (this is presented only as an example – contact FP&A for final pricing):

Out-the-Door Cost $27,550
Lease Term48 months
Documentation Fees$595
Monthly Payment $812.82 plus tax
Payment at End of Lease $1 Buy-Out
Total Up-Front Costs $2,220.63 plus tax

Includes first and last payment plus documents fee
Halperin adds that a lessee must buy hull and $1 million of liability coverage quoted separately by the insurance carrier. Qubic Leasing will provide the insurance application and FP&A has also arranged coverage to accompany their lease program. Insurance cost varies, Halperin advises, depending on experience and usage plus other factors. In the same vein, lease payments vary somewhat depending on your credit rating.
Leasing may not be for you. If you can write a check for the plane you want, that may be your best choice. The check amount for our example Quicksilver 2S on Lotus Floats is about $28,000 versus $39,000 for the lease. But it’s always nice to have options, and leasing and other forms of finance may be attractive alternatives.
Qubic Leasing is early in this game and you should at least investigate. Call your local dealer or the manufacturer of your aircraft and see if that business has a relationship with Qubic. If yes, fill out the credit application and see what they can do for you.