When budgeting for your aircraft purchase, it's crucial to look beyond the down payment. A variety of closing costs are associated with the transaction, and these out-of-pocket expenses can add up. Planning for them ahead of time ensures a smooth final phase of your acquisition.
Common Closing Costs to Expect
While every deal is unique, here are the typical closing costs you should budget for:
- Escrow Fees: The fee paid to the neutral third-party escrow agent for handling the transaction securely. This is one of the most important costs.
- Title Search and FAA Registration: Fees paid to the escrow agent or a title company to ensure the aircraft has a clean title and to file the new registration and lien with the FAA.
- Aircraft Appraisal Fee: The lender will require an independent appraisal to verify the aircraft's value, and the borrower typically pays for this service.
- Lender's Fees: Some lenders may charge an administrative or documentation fee to process the loan.
- First Year of Insurance: You must have your first year of aircraft insurance fully paid and bound before the lender will fund the loan.
No Surprises at Closing
We provide our clients with a clear estimate of all closing costs early in the process, so you can budget with confidence and avoid any last-minute surprises.
Get a Transparent QuoteHow Much to Budget for Closing Costs
The total amount of closing costs can vary significantly based on the value and complexity of the aircraft. For a single-engine piston aircraft, it might be a few thousand dollars. For a multi-million dollar jet, the costs can be substantial. It's a wise practice to budget an additional 1-3% of the purchase price to cover these miscellaneous expenses, not including the pre-buy inspection which is a separate, major cost.