Finance: Flying internationally

Many owners are surprised to learn that financing agreements can limit their operations. Each lender has different requirements. At a high level, they’re all going to want to ensure that appropriate insurance coverage is in place. And where you’re going to fly is important. Canada, the Bahamas, and the Caribbean generally are not an issue, and Mexico usually is OK. Some of the other South American countries can be more challenging, however.

It’s important to make sure that you’re covered for war and terrorism. Remember, this isn’t just about your lender—it’s your airplane, and you want it to be covered. If there’s political unrest at your destination and your aircraft is damaged in a riot that is not covered by your insurance policy, you’ll be responsible for any balance owed your lender.

Check your insurance policy carefully. A short flight from Florida to the Cayman Islands might take you over Cuba. If your policy excludes Cuba, an inexpensive rider will provide protection should an unplanned landing become necessary. Every pilot should plan on the worst-case scenario, and whether finance or insurance requirements are the driving factor, the smart move is to protect your asset.

Should you discover that your loan documents prohibit operations in certain countries, the challenge usually will be obtaining adequate insurance coverage. Most lenders will be reasonable if there’s sufficient insurance. For a few volatile locations, though, insurance can be hard to get—or it might be available at a prohibitive price.

If you’re shopping for aircraft financing now and plan to operate your new aircraft outside the United States, mention this up front to your lending institution or AOPA Aviation Finance. A need to operate in certain countries might affect your choice of lender.

In general, however, most lenders are going to be able to get comfortable with your planned international operations, as long as there is sufficient insurance in place. Remember that they’re looking out for your best interests here. At the end of the day, your interest and theirs are usually aligned, preserving the value of your airplane.