Aircraft Buying and Selling: A Guide to Buying and Selling Aircraft

Aircraft Buying and Selling: A Guide to Buying and Selling Aircraft
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The decision to purchase an aircraft is no easy one, whether it’s for personal use or business. With countless approaches and factors to consider, the undertaking can be daunting.

Why buys an aircraft?

With the knowledge that many of the aircraft available to the average consumer are outdated and over-engineered, it’s tempting to simply searching on google aircraft for sale used and consider purchasing a used aircraft. These aircraft come with the hassle of dealing with paperwork and navigating the intricacies of selling an aircraft. It’s not as appealing for all, however.

Let’s face it. The present value of aircraft is significantly higher than what they are worth.

The real question is whether it is better to buy new or used.

New

The advantage of buying a brand-new aircraft is that you know for sure you are getting the latest model with best quality materials and operating system. Also, the seller is selling the aircraft at what is likely to be the peak value.

Considerations before buying an aircraft

Deciding the type of aircraft to buy is a major decision point. Do you have the budget? Do you have a place to take it? Will it fit in your company’s hangar?

If you don’t have a dedicated hangar, how do you go about getting a plane? Are there any regional flight schools that offer CFI training?

Do you have a place to store the plane? A large hangar is not a requirement, but as it becomes harder to travel long distances due to traffic congestion, having a building to keep the plane in is a luxury not to be missed.

See the Embraer Phenom 300, a light jet that can be flown with a student pilot, for instance, in its hangar or have it taken to a dedicated airport that has a concrete area to keep it is always a bonus.

Cost

When purchasing a new aircraft, a number of variables are associated with it, including its price, its quality, and the transportation costs associated with it.

Cost often plays a significant factor in the decision-making process when choosing a business aircraft. Aircraft dealers charge a myriad of fees and charges.

If you buy an aircraft on your own, you are responsible for the bulk of those costs. Even in the best-case scenario, if you buy an aircraft from a respected dealer, you will still have to pay for expensive and often unnecessary add-ons and upgrades.

Logistics

Logistics are an important factor to consider when purchasing an aircraft. If you plan to live-fly, the costs of travel and accommodations will be high.

Size

In addition to all of the other considerations, size and price are always a factor. The less the carrier’s entire fleet is the more the individual is paying. This is also a factor for private or charter customers. This is especially true if a buyer’s requirements will include hiring additional aircraft, more aircraft storage and so on.

Aircraft operating at many of the main aircraft operating airports can be surprisingly expensive. The most expensive aircraft in the world, the Airbus A380, is about $2,600 per hour in air charter services and $235,000 for a 787-10 in air travel at standard charter rates. The Air India 787 was sold for $90 million and the Boeing 777-200LR for $100 million.

Speed

There are many good reasons why buying is usually quicker than selling. Firstly, it is quite straightforward to list the aircraft for sale. A seller does not need to pay for a broker to process the sale and the buyer simply has to pay for the aircraft – shipping, government fees and taxes are all dealt with by the buyer. This process can be completed in just days, or even hours.

Because of this, sellers generally enjoy greater bargaining power. Potential buyers can either purchase a brand-new aircraft or a pre-owned aircraft. Post-purchase, it can be a lengthy process to sell. Existing owners may either wait for the aircraft to be sold on their behalf, or try to list it themselves.

Aircraft types

There are hundreds of models and manufacturers in this marketplace.

Documents required to buy an aircraft

The buyer will need a number of documents and in some cases legal representation to put an aircraft deal through.

The purchase agreement

The purchase agreement should be the key document that is provided to the seller by the buyer’s bank. Once you have a signed purchase agreement, you can move on to the Financing Agreement.

The Financing Agreement

In this agreement, you agree to provide a loan to the seller in the amount of the aircraft purchased. This is the amount the seller will need to put down to the buyer to purchase the aircraft.

The Payment Agreement

In this agreement, the buyer agrees to make the money payment once the aircraft is purchased. The buyer will also pay the seller a percentage of the purchase price.

The process of buying and selling an aircraft

The latter half of this month, prices will drop dramatically, which will make this a great time to buy an aircraft. Additionally, prices could fluctuate throughout the year.

Most aircraft transactions take place at the last minute. Sales fall into two categories: Fixed Rate Sales and Multiple Sale Sales.

Fixed Rate Sales

Fixed rate sales are the most common type of sale that aircrafts are sold in. These sales occur at a fixed rate and only occur in the last minute before closing, when it’s almost too late.

For example, at a fixed rate sale, the aircraft’s sale price is set at the last minute. The purchaser receives a full security deposit and is committed to making their purchase.

The decision to purchase an aircraft is no easy one, whether it’s for personal use or business. With countless approaches and factors to consider, the undertaking can be daunting.

Ask questions before beginning the search for an aircraft for sale used. Know what your budget is and what type of maintenance you will need to perform on your new purchase should you decide to sell later on.

 

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