5 Common Mistakes to Avoid in Aircraft Financing

A smooth aircraft acquisition is all about preparation and avoiding common pitfalls. Here are five of the most common mistakes we see buyers make in the financing process.

Mistake #1: Shopping for a Plane Before a Loan

Falling in love with an aircraft before you know what you can afford is a recipe for disappointment. You risk wasting time on planes outside your budget or losing out on your dream plane because you can't get financing approved quickly enough.

Mistake #2: Skipping the Pre-Qualification Step

A pre-qualification is your golden ticket. It proves to sellers that you are a serious, credible buyer. Making an offer without one puts you at a significant disadvantage compared to other buyers who have their financing lined up.

Mistake #3: Skimping on the Pre-Buy Inspection

Trying to save a few thousand dollars on a pre-buy can cost you hundreds of thousands in the long run. A thorough pre-buy by a qualified mechanic who knows the specific aircraft type is the single best investment you can make to protect yourself from costly, hidden defects.

Mistake #4: Not Budgeting for All Ownership Costs

The monthly loan payment is just the beginning. You must budget for the "real" costs of ownership: insurance, hangar/tie-down, fuel, maintenance, and reserves for future engine or propeller overhauls. Underestimating these costs is a common cause of financial strain for new owners.

Mistake #5: Not Using an Aviation-Specific Team

Your local bank, family attorney, or car insurance agent likely does not understand the complexities of aviation. You need a team of specialists: an aircraft finance broker, an aviation attorney, and an aviation insurance broker. Their expertise is invaluable in navigating the unique challenges of an aircraft transaction.