Buying and selling aircraft isn’t something that most people think about doing. Or think about in general for that matter. When we think of airplanes, we think of the big companies that charge hundreds of dollars for tickets and offer complimentary flight peanuts. But individuals buy airplanes all the time. After being in the aviation business for over a year, I’ve found that there’s a whole other part of the business world that deals with people who buy and sell their own airplanes for personal or small company use.
Airplanes are not just for the rich and famous or the big airline companies. Anyone with the drive and means to own their own plane can make it a reality. The process can seem daunting. After all, there’s a lot more to buying an airplane than going down and signing a lease at the dealership. A few basic steps, however, can make the process go much smoother.
The five steps listed here are some basics to buying an airplane that will help you get started on your way to being a bona fide aircraft owner.
1. Get to know the FAA – One of the most important things you’ll be dealing with as an aircraft owner is the government agency known as the Federal Aviation Administration, commonly referred to as the FAA. This agency deals with the registration and regulation of all aircraft, as well as the registration of financial interests for banks and lending companies. Located in Oklahoma City, Oklahoma, the FAA is the agency that establishes the rules that pilots and aircraft owners follow to hold with government policy. The FAA website will be the first place you want to check out before buying your aircraft. The site offers news and updates, regulations and policies, statistics, and a lot of other information that will come in helpful when buying your airplane.
2. Find an aircraft title company to get you through the rough spots – One of the best tools you can utilize when buying an aircraft is the services of an aircraft title company. These companies deal directly with the FAA and can do things that an individual would find difficult, such as tracking the progress of registration documents and being able to correspond directly with the correct FAA officials to solve problems. Specialists in the field of aviation often work for these companies and can help answer questions, walk you through the process of buying your plane, and keep you informed of any problems in your registration documents, usually at a lower cost than what an aviation attorney would charge. Many aircraft title companies also offer escrow services for help in the financial part of your transaction. A basic search of aircraft title companies in Oklahoma City will yield results on how to contact one of these companies.
3. Have a title search done on the aircraft you want to buy – It would be a wonderful world if you could have faith that the aircraft you wanted to buy was free and clear of problems. Unfortunately, it doesn’t always work out that way. A title search is always recommended before buying an airplane. This search can be done by an aviation attorney or by a specialist at an aircraft title company. It involves obtaining the full historical record of the airplane from the FAA and thoroughly perusing it to make sure that there are no open liens on the aircraft or any past problems in the ownership that would cause legal problems for you in the future. Your report should be ordered and issued to you before you buy your aircraft so that you can take the necessary steps needed to give your future purchase a clear record.
4. Decide how to finance your airplane – If you plan on paying with your new airplane with money you have just laying around, you can skip this step and call me if you need a personal assistant. If you’re like most people, buying your airplane is going to take some good credit and a willing financial institution to help you out with your purchase. There are many banks out there who work with aircraft buyers, so even if you’ve never heard about an aircraft loan before, they happen every day. Consult an attorney or a title agency to help find a lender close to you that would be willing to work with you on an airplane loan. Have your title search ready for them to look at as well as the basic information about the plane you want to buy, like purchase price and seller information. Many lenders require that extra steps be taken before they finance you, like International Registry registration or title insurance on the plane you want to buy. These things do come at an extra cost, so find out what they need and look around for quotes on these services. Though the extra requirements may be more expensive, getting your airplane securely financed will be well worth it in the end.
5. Fill out the appropriate documents – One of the less exciting parts about buying an airplane is the forms. The FAA requires that your airplane be registered with them and they require that specific documents be submitted to show the sale and the new owner. The financial institution backing you will also require that their security agreement be registered with the FAA to secure their assets in funding your purchase. Obtain these forms right away so that you’ll have them handy when you’re ready to buy the airplane. Registration documents include a Bill of Sale, which can be found at the FAA website and an Application for Registration which must be obtained and submitted in triplicate. You can get these forms from a title agency or from a local FAA Flight Standards District Office (FSDO). Standard security agreements done by your lending institution will generally be accepted by the FAA and can be reviewed by a title agency or aviation attorney prior to filing. It’s always important to fill these forms out as precisely and correctly as possible to avoid delays in their acceptance at the FAA. Once completed, the documents can be sent directly to the FAA for filing (don’t forget the required fees) or to the agency helping you. It is often beneficial to use a title agency in this case as they are alerted if there are any problems and can quickly help you get things corrected.
This standard outline can give you a good starting point for buying an airplane. While the aviation world can be a lot more complicated, a basic knowledge of what you need and where to find help can make the process a lot less stressful.