Paying In advance
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Paying In advance
I am going to do my PPL this summer and wondering are there any problems with paying in advance? Cause I want to save as much money as possible.
Thanks
David
Thanks
David
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There are a host of people on the forum who wil advise you to be very very careful parting with money up front. There have been just too many instances of schools shutting down at short notice taking students money with them.
But you need to start asking is where are the best and most effective schools in your area, and this forum is a good place to start
But you need to start asking is where are the best and most effective schools in your area, and this forum is a good place to start
Hovering AND talking
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Yes, be very very careful! I did as everyone advised me NOT to, and paid up front.
However, I paid at the start of a full-time PPL course so my money was only in their bank for a maximum of 8 weeks. So, what were the chances of the company going bust in 8 weeks? That's what I had to assess.
Firstly, they were/are a Limited Company so I obtained their Statutory Reports from Companies House and a full Dun & Bradstreet credit report. As an accountant I have easy access to these but they are obtainable over the internet for a fee.
Healthy finances, long standing operator of known repute, max exposure 8 weeks! I reckoned it was OK (and it was!) and I would do it again but only with this company.
However, I am not sure about an Aero Club. Is the above information freely available? Would they show you their accounts? How are they funded? Limited share capital by guarantee? Or just Members' subs? Do they offer any security on monies paid in advance? How long do you anticipate your PPL to take i.e. how long will they be holding your money?
These are just a few things you need to consider as well as the saving made versus interest lost!
Cheers
Whirls
However, I paid at the start of a full-time PPL course so my money was only in their bank for a maximum of 8 weeks. So, what were the chances of the company going bust in 8 weeks? That's what I had to assess.
Firstly, they were/are a Limited Company so I obtained their Statutory Reports from Companies House and a full Dun & Bradstreet credit report. As an accountant I have easy access to these but they are obtainable over the internet for a fee.
Healthy finances, long standing operator of known repute, max exposure 8 weeks! I reckoned it was OK (and it was!) and I would do it again but only with this company.
However, I am not sure about an Aero Club. Is the above information freely available? Would they show you their accounts? How are they funded? Limited share capital by guarantee? Or just Members' subs? Do they offer any security on monies paid in advance? How long do you anticipate your PPL to take i.e. how long will they be holding your money?
These are just a few things you need to consider as well as the saving made versus interest lost!
Cheers
Whirls
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Another question you might ask, is how long they have had the discount prepaid scheme for?
If it's only rencently introduced, it's likely it was introduced to help solve a cash flow problem, and is indicitive of impending problems.
If it's being going for a number of years, then that might not be the case.
My advice would be to be very careful. Why would they want your money in advance? It must be to help solve their cash flow.
dp
If it's only rencently introduced, it's likely it was introduced to help solve a cash flow problem, and is indicitive of impending problems.
If it's being going for a number of years, then that might not be the case.
My advice would be to be very careful. Why would they want your money in advance? It must be to help solve their cash flow.
dp
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I learnt at Old Buckenham and they run a scheme where you can put £1k into your account and they give 10% discount,some students did it that way,I paid as I went,usually settling up at the end of the weekend once they got to know me.
I would be very wary of paying up front for the whole course, maybe I am wrong because it works for some,but once youv'e lost your dosh it's a bit too late to be sorry!
As already mentioned, if it's a well established school that has been running the scheme for a while,it could be OK.
Lister
I would be very wary of paying up front for the whole course, maybe I am wrong because it works for some,but once youv'e lost your dosh it's a bit too late to be sorry!
As already mentioned, if it's a well established school that has been running the scheme for a while,it could be OK.
Lister
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Originally Posted by Lister Noble
I learnt at Old Buckenham and they run a scheme where you can put £1k into your account and they give 10% discount
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Agree with all of the above; unless the school is very reputable or an off-shoot of a well known organisation (West Midlands Police or British Airways flying club) I certainly wouldn't hand over wads of my hard-earned in advance. There are simply too many instances of clubs having folded without any warning.
Of course, with the schools that run intensive courses overseas, they will expect payment in advance, but even then I'd pay with a credit card just to get the protection that that gives.:
Of course, with the schools that run intensive courses overseas, they will expect payment in advance, but even then I'd pay with a credit card just to get the protection that that gives.:
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Given current interest rates, any school that gives a 10% discount in return for up front payment is highly suspect.
The only charitable explanation for this size of discount is that they expect the average student to spend around 2-3 years using up their prepayment
The only charitable explanation for this size of discount is that they expect the average student to spend around 2-3 years using up their prepayment
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Thanks for the advice. I plan to start in july but i can't finish till im 17 in november so itll be that maximum time ill be doing it for is a year thats if I pass all my exams. I think it would be saving me about £500 but not really sure. From what I've gathered they have been running the pre pay for quite a while.
Thanks
David
Thanks
David
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Notwithstanding the issues noted above what if you pay in advance and then decide you hate flying and want whats left of your money back? Yes I am sure they will say you can get a refund less any sort of admin fee etc but how long will it take and how many frustrated phone calls will you have to make or turn up on the doorstep only to be told that so and so isn't here and to come back later.
Also what if you decide that the school doesn't suit you? Or you move house and the school isn't well located for you? Or you could have a run in with an instructor, ask for another one from the CFI and be told to go jump. Just remember that by paying in advance the school will have a hold over you and they know it.
Also what if you decide that the school doesn't suit you? Or you move house and the school isn't well located for you? Or you could have a run in with an instructor, ask for another one from the CFI and be told to go jump. Just remember that by paying in advance the school will have a hold over you and they know it.
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A training organisation at my local airfield (Blackbushe) went into liquidation a few years ago and a lot of people lost an awful lot of money. Even where a company goes into solvent liquidation it can be difficult and time consuming to recover what is owed.
Would you pay your local 2nd hand car dealer £4000+ up front, for a car you will not take delivery of until November? The security of your money is about the same with the average flying club.
If you must pay up-front, pay only some of the money and do it with a credit card.
That said, there are 101 reasons or more why you might not finish the course, or might have to postpone it. I would definitely recommend paying as you go.
HH
Would you pay your local 2nd hand car dealer £4000+ up front, for a car you will not take delivery of until November? The security of your money is about the same with the average flying club.
If you must pay up-front, pay only some of the money and do it with a credit card.
That said, there are 101 reasons or more why you might not finish the course, or might have to postpone it. I would definitely recommend paying as you go.
HH
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Originally Posted by IO540
Given current interest rates, any school that gives a 10% discount in return for up front payment is highly suspect.
The only charitable explanation for this size of discount is that they expect the average student to spend around 2-3 years using up their prepayment
The only charitable explanation for this size of discount is that they expect the average student to spend around 2-3 years using up their prepayment
£1k at £145/hr is around 7 hrs flying time with an instructor.
10% of £1k is £100 = 40 mins flying time with instructor.
Some students book 6 hrs a weekend so get another 30+mins FOC.
Hardly a rip off!
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Quite right Lister. Schools give discounts for all sorts of reasons, and probably none are disreputable. I know plenty of well run clubs run by honest people who give discounts for cash in advance. To tar them all with a 'highly suspect' brush because of one or two mess up and go out of business shows a lack of knowledge of the industry as a whole. Follow whirlygig's advice and ask around.
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Originally Posted by potkettleblack
Notwithstanding the issues noted above what if you pay in advance and then decide you hate flying and want whats left of your money back? Yes I am sure they will say you can get a refund less any sort of admin fee etc but how long will it take and how many frustrated phone calls will you have to make or turn up on the doorstep only to be told that so and so isn't here and to come back later.
Also what if you decide that the school doesn't suit you? Or you move house and the school isn't well located for you? Or you could have a run in with an instructor, ask for another one from the CFI and be told to go jump. Just remember that by paying in advance the school will have a hold over you and they know it.
Also what if you decide that the school doesn't suit you? Or you move house and the school isn't well located for you? Or you could have a run in with an instructor, ask for another one from the CFI and be told to go jump. Just remember that by paying in advance the school will have a hold over you and they know it.
Also what I havent mentioned is I have about 16hrs flying as a working passenger.
I'm not going to hate flying. Also I know the people from leicester so I'm not going to hate them david
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What we've said before.
If the school is going to pay you more interest then they would have to pay a bank to borrow the same money, then there is only one reason why they would do that:
They have tried to borrow money from a bank but failed because something or other about them was too dodgy for the bank to touch with a barge pole.
So, if you think you're better at evaluating the risks than a professional banker, then by all means go ahead - otherwise, lending several thousand pounds to a business that professional bankers have already decided is a bad risk sounds completely daft to me.
If the school is going to pay you more interest then they would have to pay a bank to borrow the same money, then there is only one reason why they would do that:
They have tried to borrow money from a bank but failed because something or other about them was too dodgy for the bank to touch with a barge pole.
So, if you think you're better at evaluating the risks than a professional banker, then by all means go ahead - otherwise, lending several thousand pounds to a business that professional bankers have already decided is a bad risk sounds completely daft to me.
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No Gertrude. I know several flying schools with unused lines of credit from banks who offer discounts for cash in advance. Flying schools will offer discounts for various reasons, not only because it's cheaper than borrowing from a bank. A well run company will be set up so it earns interest on your money until you take the flight, then the money gets moved and spent on things like fuel etc. That sounds like good business sense to me, and they are also making the customer 'sticky' because he has cash on account. You cannot slag off all flying schools just because one or two went bust owing money. There are obviously people on here with axes to grind, people should read all the posts and make their own minds up.
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Always use a credit card if you can. If a company goes under and you paid by credit card you have a MUCH better chance of getting your money back. That goes for buying a sofa just as much as for flying lessons.
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I can think of about 10 schools myself, over a 5 year period, of which about 3 went down with all student deposits. That's 30%.
Of the 3, two were the victim of major internal fraud.
30% is not a good risk for say £5000 advance payment.
Incidentally, and I speak as someone who has been in business for 27 or so years, Dun & Bradstreet or similar checks are nearly worthless. D&B are easy to fool. The best single indicator is how long somebody has been operating under the same name and with the same person(s) at the top.
Of the 3, two were the victim of major internal fraud.
30% is not a good risk for say £5000 advance payment.
Incidentally, and I speak as someone who has been in business for 27 or so years, Dun & Bradstreet or similar checks are nearly worthless. D&B are easy to fool. The best single indicator is how long somebody has been operating under the same name and with the same person(s) at the top.