Nothing tops having private use of your own aircraft. Private jets enable the busiest VIP’s to trade money for time savings. If a company or individual is regularly flying around the globe on a charted aircraft then it may make economical sense to purchase a jet outright (or on finance) rather than hiring the plane when needed. Buying a private jet would seem like an easy task but there are multiple steps you should take before signing on the dotted line. A few words of advice, hire an expert, brokers make sure the the millions of things that can go wrong, don’t go wrong.
Below are the 7 Steps to Buying Your Aircraft:
Step 1, Know your budget:
Like with any purchase, know what you are willing to spend. Primarily, 350 to 400 hours of flight time per year advocates the purchase of a private aircraft. Buying a brand new aircraft will cost you significantly more than purchasing a second-hand one. If cost is to some extent important in your buying decision then you will want to ensure you are getting the best value for your purchase.
There are multiple category of aircraft; props, light, medium, heavy and jumbo. Depending on your travel destinations there will be an aircraft that best fits our flying needs.
These are the Average Cost per Category:
Turbo props: $1.5 Million to $3 Million
Light Jets: $3 Million to $8 Million
Medium Jets: $9 Million to $16 Million
Heavy Jets: $17 Million to $45 Million
Jumbo Jets: $46 Million to $80 Million
Financing is also available if you choose not to use all your own cash. The average standard loan terms are 3-5 years, with loan amortization’s of 15-20 years on newer aircrafts and 10-12 for older models.
For example, a 2010 King Air C90 worth $2.7 Million would likely get 80%- 85% financing, with 15-20 years amortization and rates of 6.5% over 5 years or 5.5% over 3 years.
The purchase price is just the beginning; ownership requires constant management to stay up to date with FAA regulations, maintenance, insurance, fueling and pilots. For $100,000 to $200,00 per year a Management Company can eliminate these headaches.
Step 3, Find your Jet:
Before starting the search process, I recommend chartering so as to get a feel of the type of aircraft you would prefer. Usually, a consultant or management company helps with your jet search process. Either way, the management company will be responsible for keeping you happy in the long run, so it is in it’s interest to ensure that your search puts you in the right aircraft.
Step 4, Take it for a test drive:
Like taking a car for a test drive, it makes sense to take a pre-sale spin in your aircraft. For qualified buyers, with money in escrow, manufactures will provide demo hops around the airport area.
Step 5, Get an Inspection:
Before you say, “I want this Jet!”, make sure it’s in flying condition and worth the asking price. For either a new or a used aircraft you still need to pay for inspection. A good inspection can and do uncover safety-of-flight issues, especially in older and not so will maintained aircrafts. Identifying big-ticket maintenance discrepancies before signing on the dotted line can save millions in surprise expenses down the road. To limit your costs you can pay an hourly rate for an engine program. These programs cover the very expensive mid-life inspections and overhauls that are required years down the road.
Step 6, Get a Lawyer:
There are lots of tax planning and Federal Aviation Administration (FAA) compliance issues to account for. You’ll need legal advisors versed in aviation tax law, insurance and rules of the sky.
Step 7, Hire a Management Team:
Once you have your own plane, the trick is getting it in the air and keeping it there. If you’re not part of a big company with a flight team, you’ll likely need a consultant to manage your aircraft. An aircraft Management Company does a lot: select the crew and pilots; oversee plane maintenance; do your accounting (fuel, insurance, parts, crew pay, etc..); coordinate your flights; and storage (usually a shared hanger and at a local airport). Management companies can even help charter the plane when you’re not using it so there’s a little more return on your investment.
Lastly, now that you have your own luxurious means of transportation, you want to make it your. There are multiple companies that will make your aircraft specific to you personal or business needs.
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-Purchase or Charter of Private Aircraft's, Yachts & Exotic Cars
-Financing of Private Aircrafts & Yachts
-Purchase of Luxury Homes and/or Villas
-Luxury Vacation Experiences
-Purchase of Collector items
-VIP/ Red Carpet Events
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