AOPA Pilot Magazine - June 2018 - 108

NEWS & NOTES

AOPA MEMBER PRODUCTS

AOPA FINANCE |

After the fact
Can you get a loan
after a cash purchase?

YOU ARE ON VACATION and happen to see
exactly the aircraft you were searching for.
The owner is looking for a buyer. He thinks
he has a prospect but no commitment yet,
so he makes this offer: Buy it now (close
within two to three days) and it's yours.
The prebuy inspection indicates
the aircraft is a great value, and a deal is
struck. You transfer the money. Now it is
time to find a lender who will reimburse
the already completed deal.
In general, you should be able to find
financing after the fact. However, make
sure you still close through an escrow
company. Most lenders will allow a reimbursement transaction only if the airplane
originally went through an escrow company. Most lenders would prefer that the

BY ADAM MEREDITH

AOPA Aviation
Finance

seller of the aircraft had background verification, which would happen if closing
through escrow. Also, by going through
escrow and having a title search, you can
verify there are no unresolved clouds or
liens on the title.
When buyers seek financing after the
fact, they believe that if they don't buy
the aircraft immediately, they are going to
lose it. I understand that concern, and it is
legitimate. A better thing to do would be
to get preapproved, before you start looking. You'll feel better knowing the financing
will be there.
Moving too fast can lead to problems
later. A proper title search may reveal that
the aircraft had severe damage 10 years ago.

Or you may hear from the lender that you
paid too much for the aircraft. In that case,
the lender won't be able to loan as much
money as you have paid.
Considering aircraft ownership? AOPA
Aviation Finance will make your purchase
experience as smooth as possible. For information about aircraft financing, please visit
the website (www.aopafinance.com) or call
1-800-62-PLANE (75263).
ADAM MEREDITH is president of AOPA

Aviation Finance.

TRAPS OF THE SPEEDY DEAL
1 You may pay too much.
There may not be time for a

2 good damage history review.
3

The seller may have had
problems in the past.

AOPA INSURANCE |

Premium
adjustments

What goes down must go up
B Y J I M P I N EG A R
FOR THE PAST SEVERAL YEARS, aircraft

owners buying insurance have benefitted from a steady drop in what they
paid for insurance. It's been nearly 15
years of lowering premiums, primarily
because insurance companies and their
reinsurers needed a place to invest their
resources.
Unfortunately, those days now
appear to be over. In the fourth quarter of 2017, it's almost as if a switch was
thrown and premiums started to rise.
We are seeing premiums increase
on many different makes and models
of aircraft. Models such as tailwheels,
higher-horsepower airplanes, and
retractable-gear aircraft were the first
108 | AOPA PILOT June 2018

to see increases. Now carriers are communicating that other increases are likely
to occur. Some increases are marginal,
while others may be substantial. The
reason? Every insurance carrier, across
all lines-home, auto, life, and aircraft-
uses reinsurers, and they have sustained
sizable losses in the past several years. It
could be the two major hurricanes that
caused extensive damage, or any combination of natural disasters that have
caused losses-losses not only to aircraft but to homes, cars, and everything
else that is insured. In the noncommercial aircraft insurance market, for the
past few years, most companies have
paid $1.06 for every dollar of premium
received. That alone causes a difficult
financial model.
Now, more than ever, you need to
use an insurance broker to find the
best deal available in the marketplace.
Brokers have access to markets and coverages that you can't get to on your own.

At AOPA, we shop the market on your
behalf, finding the coverage you need to
fit your budget.
www.aopainsurance.com
JIM PINEGAR is vice president of finance and

administration for AOPA Insurance.

AOPA AND CALIFORNIA AERONAUTICAL
University have renewed their supporting sponsor agreement, which will
continue the work of reaching a new
generation of pilots. CAU will sponsor
AOPA's annual High School Symposium
in Louisville, Kentucky, November 5 and
6. CAU prepares students for careers
in aviation.
www.calaero.com
http://www.aopafinance.com http://www.aopainsurance.com http://www.calaero.com
AOPA Pilot Magazine - June 2018

Table of Contents for the Digital Edition of AOPA Pilot Magazine - June 2018
