Financing | Diamond Aircraft

FINANCING.

AirFleet Capital/Diamond Financing FAQs

If I can get a low, 15% down payment - why would I ever want to put 20% down? The rates don't seem to be all that different?

Although 15% down is the minimum required, there are 2 compelling reasons for considering a 20% down payment - in a word, flexibility. The most obvious, of course, is the financial benefit of a 20% down payment - lower rate, smaller monthly payment, easier credit terms and approvals, etc. However, the second reason, and perhaps even more compelling, is to position you for your next new Diamond purchase. By providing a higher down payment, you acquire more equity. Not only does this decrease the financial risk, but once you are ready to trade up, this additional equity can be put towards your new Diamond. Oftentimes this means, that even with a more expensive aircraft, you will not have to come up with any additional money out of pocket. This proves to be invaluable when you are ready to upgrade. It's easier to sell the benefits of the new Diamond purchase to your "Board of Directors" (or spouse) when you don't have to pay "out of pocket".

I lease my car - but I have found that it's hard to get leases in the aircraft market. Why don't you offer a lease program?

There are many valid reasons for leasing an aircraft but those reasons are limited to a business buyer (not an individual) and all relate to the tax treatment or accounting presentation. When most people think of a lease, they often use a car lease as a point of reference - little down payment, low monthly payments, turn the keys back after 30 months, etc. The reality is that most leases require a "security deposit" and/or an "Amount due at Closing" equivalent to a down payment. However, a car lease usually does offer a lower monthly payment when compared to a car loan. This is not the case with an aircraft because aircraft loans are amortized over a period of 20 years thereby offering the lowest monthly payment. Furthermore, a lease only allows a specified number of hours usage per year. If you exceed the allotted hours, you will pay much more, similar to a car mileage allowance, and if you don't use the hours you still pay for the hours because it is already built into the lease payment. Another consideration is that any damage to an aircraft will result in a "market value adjustment". This means that you will pay the cash difference between the projected "no damage" value and the estimated "damaged" market value at the end of the lease. Finally, aircraft historically hold their value very well and the lessor (lender) values the aircraft to ensure they receive a profitable sale and gain at lease end - the lessee ultimately ends up paying for this in the form of a higher monthly payment. In most cases, the loan offers a much better value and greater flexibility, which is why leases are not popular with aircraft buyers.

I have used other banks and even my local bank in the past; why should I use AirFleet Capital for my Diamond purchase?

AirFleet Capital has supported Diamond and its buyers since the DA-20C was first introduced and we have been alongside Diamond for the introduction of every new model since - we know Diamond! This long history coupled with our belief in Diamond, the company, its products and its people, gives us a unique understanding and a dedication to offer the best rates and terms for Diamond customers. To accomplish this, AirFleet uses a variety of lending sources that allows us broader financial market access to create customized financing programs specifically for customers of Diamond Aircraft. Further, we have built close relationships with the Diamond family to provide an easy, smooth and quick financing experience for you, our customer. AirFleet Capital, your Diamond dealer and the factory work seamlessly together to ensure all of the details are taken care of and get you flying as soon as possible.

Is an aircraft loan approval based on collateral?

A loan approval is based on a number of factors, including aircraft value. All Diamond aircraft have demonstrated strong historical values and therefore represent excellent collateral positions. Accordingly, the loan is secured with a lien on the aircraft. In addition to collateral values, lenders also consider a customer's cash flow, credit history and financial situation. With the application, aircraft lenders review the customers' personal financial statement, tax returns to verify income/cash flow and credit. This provides us with an overview of your financial situation and helps qualify you for your new Diamond purchase.

Why the difference in terms for Private use vs. Commercial use?

In general, terms for private use aircraft are 10% down with a 20 year term. For commercial use programs, you generally see a larger down payment and/or shorter term loan. The reason for the difference is the utilization and corresponding annual hours put on the aircraft. As the utilization of an aircraft increases, the depreciation of the aircraft due to high engine/airframe hours along with extra wear and tear is accelerated. In order to offset this effect, financing terms are set to protect both the customer and the lender by tailoring the down payment and term to the utilization. By structuring the program with a higher down payment and/or shorter term, you are less likely to be "upside" down in your loan (owing more on the aircraft than what it is worth) when you are ready to sell or trade in your aircraft.

Can I lock in my rate?

Upon approval, your rate is locked for 30 days. If you require more time, in some cases we can lock your rate for up to 90 days with a small rate lock fee due at the time of approval.

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AirFleet Capital/Diamond Financing FAQs