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 Post subject: Re: A Big Reason Cirrus Sells Lots of Planes to Repeat Custo
PostPosted: 14 Mar 2016, 18:45 
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Joined: 09/02/09
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Location: Oklahoma City - PWA/Calistoga KSTS
Aircraft: UMF3, UBF 2, P180 II
Username Protected wrote:
A guy at my field just bought a brand new Cirrus, with as far as I can tell, every option available. He said it was around $800K, and he's looking for a 1/2 partner. His last Cirrus was no slouch, but 11 years old.

If I had $800K in cash to put down on an airplane, I would certainly reach for performance over age. But the new stuff sure is fun to look at.


three words, bonus depreciation recapture

learn those, and these purchases can be rationalized


Maybe. But that isn't why I bought the airplane in the first place. And, if I bought another one that wouldn't be the reason either.

Having said that depreciation certainly does lower the current cost of ownership for a business airplane which mine is. But all Bonus depreciation does, or Section 179 for that matter, is speed up the MACRS deduction the first time you use it. If you purchase another new plane 3 years later the depreciation you've claimed on the first one will be recaptured and unless you bought a much more expensive airplane, you'll either break even (if you use Bonus and Section 179 the first time and do so the second time as well) or have some recapture to pay.

At the end of the day you get to pay the deferral. Maybe you get time value of money out of it. But as Don says the chickens come home to roost. Of course this is true with any business asset and only stupid business people do things solely for tax reasons, or without understanding the consequences of the elections they make.

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 Post subject: Re: A Big Reason Cirrus Sells Lots of Planes to Repeat Custo
PostPosted: 14 Mar 2016, 19:46 
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Username Protected wrote:
...this is true with any business asset and only stupid business people do things solely for tax reasons, or without understanding the consequences of the elections they make.

A business guy saying they bought something for a tax write-off, is like a wife saying

Look how much money I saved, Hunny! :doh:


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 Post subject: Re: A Big Reason Cirrus Sells Lots of Planes to Repeat Custo
PostPosted: 14 Mar 2016, 22:25 
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Username Protected wrote:

Nope. Depreciation recapture is taxed as ordinary income.


Thanks. Sounds like I've been misinformed.


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 Post subject: Re: A Big Reason Cirrus Sells Lots of Planes to Repeat Custo
PostPosted: 15 Mar 2016, 19:57 
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I don't mean this to sound snarky, though I'm afraid it will......

If I'd spent $800k on a new Cirrus, I think I'd be aggravated to be AOG with a mechanical, no matter how helpful they were about it.


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 Post subject: Re: A Big Reason Cirrus Sells Lots of Planes to Repeat Custo
PostPosted: 15 Mar 2016, 20:27 
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I agree I'd be frustrated with problems on a brand new airplane, although they're common on almost all piston planes. Part of the 70 year old tractor technology we're still using, I guess.

But Tony's plane has several hundred hours, I believe.


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 Post subject: Re: A Big Reason Cirrus Sells Lots of Planes to Repeat Custo
PostPosted: 15 Mar 2016, 20:55 
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Username Protected wrote:
I agree I'd be frustrated with problems on a brand new airplane, although they're common on almost all piston planes. Part of the 70 year old tractor technology we're still using, I guess.

But Tony's plane has several hundred hours, I believe.

I'd say the opposite. It's the newer tech that's responsible for most failures. Look at the columbias when they first came in the scene - they weren't having problems with their tractor engines, it was the stupid electronic hvac that gave them fits.


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 Post subject: Re: A Big Reason Cirrus Sells Lots of Planes to Repeat Custo
PostPosted: 15 Mar 2016, 22:42 
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Anyone who thinks that you won't have any problems after 450 hours of piston aircraft operation isn't being realistic. Nothing's perfect. The issue is how do you get taken care of when issues arise. My point is simply that Cirrus gives world class service.

And I didn't pay $800k for my airplane...


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 Post subject: Re: A Big Reason Cirrus Sells Lots of Planes to Repeat Custo
PostPosted: 16 Mar 2016, 00:03 
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Tony - You're absolutely correct. Reality is that there are different types of people in the world and we value our personal time differently. People who don't see the value in what you described aren't Cirrus buyers, they're legacy aircraft buyers and that's great, but it's a differnt market and if you're a company pumping out new airplanes it's a totally irrelevant market.

My dad had a new SR22 in 2001 (only way you could get one then was new, now that I think of it). Even then, great service and experience. After getting out of college and getting a decent job, I partnered with a guy who drove new Audi S-somethings and he wanted that Audi experience - we got a new DA40 (in late 2008 for quite a discount) rather than a bonanza or used SR22, which we could have bought for a fraction of the price. Worked great (I didn't like the DA40 that much, but I had a plane under warranty with a great partner so it was all good).

In short, you're totally right but this forum has a mix of people who like new planes and people who don't understand them. I personally have landed planes on roads a couple of times, but never had friends who could ride in on horseback (within a 15 day ride) with the right parts. So... good for those folks who fly within a few hours horseback ride of their personal shop, but I work 15hr days and there's no way in heck I'm going to spend a day trouble-shooting my plane during the work week.

Cirrus has and is killing it. Thankfully no one else is serving the market well, because I'm not sure it's a big enough market to support a bunch of competitors without widespread bankruptcies and the associated pain to those owners.

*for the record: I'm an MB and Cummins guy, not an Audi guy (because I've watched too many friends have significant mx on audi's under 100k miles, and Cummins are God's gift to trucks and boats). Also, I am currently a legacy aircraft buyer, not a new plane buyer (because I don't have the coin, and there is disgusting value in legacy aircraft for the performance).


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 Post subject: Re: A Big Reason Cirrus Sells Lots of Planes to Repeat Custo
PostPosted: 16 Mar 2016, 09:55 
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Any company that wont support a $700-800k purchase is due to fail.
I would expect this on a new aircraft purchase.

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Pistons engines are for tractors.

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 Post subject: Re: A Big Reason Cirrus Sells Lots of Planes to Repeat Custo
PostPosted: 16 Mar 2016, 14:16 
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They have an AOG department?

A few questions:

1: Is this an official warranty coverage that expires after some number of years/hours?
2: Once outside of warranty, do you get this coverage?
3: Original owners only, or do re-sale owners get this treatment?

Thanks, Larry


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 Post subject: Re: A Big Reason Cirrus Sells Lots of Planes to Repeat Custo
PostPosted: 16 Mar 2016, 16:09 
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Username Protected wrote:
They have an AOG department?

A few questions:

1: Is this an official warranty coverage that expires after some number of years/hours?
2: Once outside of warranty, do you get this coverage?
3: Original owners only, or do re-sale owners get this treatment?

Thanks, Larry


They have a 24 Hr AOG department. Any Cirrus driver can use it regardless of warranty or whom owns the plane.


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 Post subject: Re: A Big Reason Cirrus Sells Lots of Planes to Repeat Custo
PostPosted: 16 Mar 2016, 16:28 
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And the closet door opens.... :D


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 Post subject: Re: A Big Reason Cirrus Sells Lots of Planes to Repeat Custo
PostPosted: 16 Mar 2016, 16:29 
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Username Protected wrote:
And the closet door opens.... :D


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 Post subject: Re: A Big Reason Cirrus Sells Lots of Planes to Repeat Custo
PostPosted: 16 Mar 2016, 16:59 
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It is good to hear they give first rate customer service but in reality they should. For that kind of money in a boutique market, service should be the best there is. That being said if I had money to burn I would buy new. I love new cars and I am sure, though I will never know, that a new airplane is pretty sweet.


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 Post subject: Re: A Big Reason Cirrus Sells Lots of Planes to Repeat Custo
PostPosted: 16 Mar 2016, 17:30 
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Joined: 02/13/10
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Aircraft: Prior C310,BE33,SR22
Does anyone know of another aircraft manufacturer selling new planes today that offers a 24-hour AOG call-center arrangement?

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