A Dealer or Broker Can Guide You Through the Process
Frequent travelers and national or international businesses often choose private aviation options over commercial airline flights. The crème de la crème of private aviation is, of course, owning your own jet.
Making this type of purchase requires intimate knowledge of the sales process, which is not so unlike purchasing a house, albeit a very expensive one, with a few extra steps you must follow. So, while it’s fairly easy to find aircraft for sale listed online, it’s less easy to buy one. They aren’t used cars, after all.
To simplify the process and handle the tough stuff, an aircraft broker or dealer works on your behalf. Before you begin the purchase process, complete some research and background work so the dealer or broker you hire can help you right away. Here are a few considerations as you prepare to buy a private jet.
Considerations for Buying a Private Jet
You need to know your budget for the purchase price, plus the amount of money you can allot for maintaining and flying your jet. Annual cost of ownership varies by jet, and they come in fixed and varied costs.
Understanding your finances will allow you to determine the size of jet you can afford. Generally, the larger the jet, the more expensive it will be to purchase and operate.
Larger jets also tend to offer more on-board amenities, such as private staterooms, larger lavatories, well-equipped galleys, and infotainment systems. However, small aircraft provide what you need in-flight, just on a smaller scale. Dig deep when considering what you really need on your jet.
If you’re buying a pre-owned aircraft, you’ll need to look at the number of pressurization cycles a plane has gone through. This determines the jet’s remaining useful life. The more pressurization cycles, the shorter the jet’s life. If you choose to buy new, this is not a meaningful consideration.
Buying a Used Jet sale.
When you choose to buy a pre-owned aircraft, you’ll want to work with a reputable aircraft dealer or broker to complete the process and find aircraft for sale
Here’s how it works:
- Entering into the Contract
After you’ve chosen your used business jet, your dealer or broker will compose an offer letter and send it to the seller’s agent, who will decline or accept your offer. If accepted, your dealer or broker will then draft a purchase agreement, which is sent to escrow with your down payment.
- Securing Financing
If you need financing for your business jet, you’ll need to secure it after you’ve agreed to purchase the jet. Your finance company will need a copy of your signed purchase agreement and information about why you are qualified to take out a loan.
- Get Aircraft Insurance
Before you can close on your aircraft loan, you’re required to show that you have an insurance policy for it. You will need insurance for your jet regardless of how you finance it. Multiple insurance policies are required:
- Hangar insurance
- International liability insurance
- In-flight insurance
- Public liability insurance
- Passenger liability insurance
- Combined Single Limit (CSL)
- Aircraft hull insurance
- Crew coverage
- Pay Sales Tax
Contact your tax attorney or CPA about paying sales tax. You’ll need to pay taxes on your purchase.
- Aircraft Inspections
If you’re buying a used jet, completing a pre-purchase inspection is a must. The seller should pay for the airworthiness-limiting items from the inspection, while the rest are paid by either party.When the inspection is complete, you’ll receive an aircraft condition report called a discrepancy list, outlining any issues your inspector found with your aircraft. If any issues are discovered during the inspection, you can choose to cancel the transaction or request repairs prior to purchase.
If you are flying in Reduced Vertical Separation Minimum airspace (RVSM), you must ensure your aircraft and crew meets the standards, per the regulations.You’ll need to request the RVSM documents from an RVSM agent, gather requested information, and return the documentation to the agent.
- Closing and Escrow
Behind-the-scenes steps of the aircraft buying process include title searches, preparing documents for signatures, authorizing insurance binding, and processing the loan. As a buyer, you won’t necessarily be actively involved in these, aside from providing documentation as requested and signing necessary paperwork.
With closing complete, the seller will transfer a series of documents to you, the new owner, including warranties and maintenance trackers, plus engine, APU, labor, and airframe/parts programs. You’ll need to create new accounts for navigation databases, charts, weather, Wi-Fi, and any other tech programs in your aircraft.
Is it Easy to Buy a Private Jet?
The process of purchasing any aircraft can be complex, which is why private aviation professionals are here to help you navigate through. They certainly help to make the process easier and go more smoothly, much like a real estate agent helps you when you buy a house.
If you’re ready to purchase a private jet, then you now know what your next steps should be. Happy flying!