How to Buy and Aircraft 101

As published in Issue 3 Business Air Magazine.

You want to buy an aircraft. How prepared are you?  Being prepared is essential for getting the best value and a hassle free transaction.  Not being prepared makes you a shopper, not a buyer.  Shoppers do not get the best deal.

Have you selected a specific model and year range?  This sounds very basic, however telling potential sellers you are looking at other competing models might indicate you are not as far in the process and be just kicking tires.  Sellers are very reluctant to give prices to tire kickers.

Have you discussed with your aviation tax experts?   Do you know your tax timing and the legal structure that you want to place the aircraft in?

Have you retained an aviation transaction attorney?  They are critical in starting the Letter of Intent process.  A good LOI alleviates many purchase agreement misunderstandings. 

Do you understand the market dynamics?  The market has tightened up for high quality aircraft.  Time kills deals and in this case time can be the difference between securing the best aircraft and being a day late and a dollar short.

Do you have a list of required equipment and the associated costs to add them?  In the beginning stages, ball park high estimates are fine. Do you have an approximate idea of downtime to do these required equipment additions?

Do you know the availability of the shops to do a pre purchase inspection?  What do school slots look like for your new make and model?

Do you have a plan for getting all of the necessary approvals for the new aircraft?  

Are you planning on financing?  Talking to lenders early will give you a better idea of what you can expect for terms and pricing.  Some lenders do not finance old aircraft. 

These are just a few of the critical items that need to be considered.  Hiring a buyer’s agent is a good place to start to narrow down the choices and get the best value in the market place.