Thinking about buying a jet?
When I google the words… “buy a JET,” I get a lot of old and quite frankly useless information. I’m hoping that this post will get shared and find it’s way up in the rankings and change that at least in some small way.
When I google the words “buy a jet”…
I get a lot of old and quite frankly useless information. I’m hoping that this post will get shared, find its way up in the rankings, change that at least in some small way.
The first question most people have to answer when considering a jet is “Should I?”
The second question should be:
How do I buy a jet without getting screwed?
To address the first question in a fair manner I’d like to start off by saying you’ve probably waded through a dozen such articles about why NOT to buy a jet. Anyone can talk you out of anything because that’s easy. Negativity is a fool’s paradise because the skeptic is right more often than he is wrong and it doesn’t take much effort to be negative.
I am assuming you don’t want to be talked out of buying a jet, otherwise you wouldn’t still be reading… here is a better question to ask:
Why should I buy a jet?
It goes with out saying that you have to have money, serious money, to buy a jet. The addition of a private jet to your modes of transportation should give you a better lifestyle AND give you more time and / or give you more opportunity.
The first question I ask first time jet buyers is: Do you value time over money?
If the answer is yes, then you need a jet. The ability to work 60+ hours a week and then still enjoy the weekend is something very valuable. If we work hard but forget to play hard we work in vain. It will eventually catch up to you. If you are concerned about the cost of owning a jet?
Then give some consideration to the cost of having a heart attack or the cost of getting a divorce. I’m not saying jet ownership will prevent either of those two things… but quality time and LESS stress goes a long way!
The other thing a jet should do for you is create opportunity. This may be the opportunity to visit a client that would have otherwise been ignored or to meet like-minded people that can help you achieve your own goals. I have been around aviation and private jets for over twenty years, and I can tell you that the people I have met are exceptional!
Businesses opportunities are created with jets… a few years ago, a customer who had purchased a business turboprop called me and said,
“Well, the airplane paid for itself today!”
That was a bold statement, but when I asked how, he explained that he committed to buy a very expensive piece of heavy machinery for his company. He did so sight-unseen, as was his normal practice, but before he hung up he remembered that he had an airplane. He told the guy he would be there in a few hours to look at it, and as long as it was as represented, they had a deal.
It wasn’t. The mistake he didn’t make would have cost him more than the airplane!
If you are looking for a strategy or the information needed to justify an airplane, be it to your spouse, the board, or your CFO, just call us. We deal with the numbers and the reality of private jet ownership on a daily basis. Our greatest strength is the insider knowledge we obtain from working with and talking to folks who own and operate private jets on a daily basis.
I promised to answer the second question and here it is;
How do I buy a jet without getting taken for a ride?
It is very important to realize that in life we often do not know what we do not know. This is very true in the complicated world of private jet ownership. What you don’t know can cost you, and the numbers are bigger than you might think. Just like that airplane saved our client a smooth million, paying for his airplane in just one day, the purchase of a jet without doing your homework can cost you. I see people throw away $50k – $100k, even $250k on a regular basis.
How do I buy a jet without getting screwed?
Here are the top 15 DO’s and DON’Ts of buying a jet.
#1 – Don’t assume your “friend in the business” isn’t getting paid. He may be helping, but he may be helping you into a bad deal and himself into a huge commission.
#2 – Do approach buying an airplane like you would a used car. If you are not careful, you will get taken. Most airplanes are sold “AS-IS, WHERE-IS,” meaning you have no recourse. Buyer beware.
#3 – Don’t buy the cheapest airplane assuming it is the best deal. It isn’t.
#4 – Do make aggressive but realistic offers. A seller will typically “counter” your offer. You don’t want to offer too much and leave them in the uncomfortable position of asking you to pay more than they were willing to take.
#5 – Don’t make unrealistic offers. If you don’t know what the last three comparable airplanes sold for, you are making a blind offer. If you go too low, you will insult the owner and he will decide you are not a serious buyer.
#6 – Don’t make multiple offers fishing for a deal. It is a very small industry. You will likely develop a reputation and no one will take your offers seriously.
#7 – Do place a REFUNDABLE deposit at an aircraft title company. Your offer will be ignored without it.
#8 – DO NOT under any circumstances give a deposit directly to the seller, read my post here.
#9 – Do have a pre-purchase inspection done, including a visual inspection, bore-scope and logbook review prior to moving the airplane, as well as a pre-purchase inspection by a competent maintenance facility.
#10 – Don’t agree to use the shop the seller wants to use, or the shop that has been maintaining it. We want a different set of eyes on the airplane.
#11 – Don’t buy a jet “where-is” or with a fresh inspection. A maintenance event is just that. It is NOT a pre-purchase inspection.
#12 – Do use a well-written aircraft purchase agreement to document the purchase and outline the responsibilities of both parties.
#13 – Don’t use the seller’s contract. If they insist, have an aviation attorney review the document.
#14 – Don’t agree to close the purchase until the seller has met all of their obligations and has paid for the maintenance bill to bring the aircraft up to the contractual standard.
#15 – DO hire an expert. What we charge is less than the cost of a single bad decision.
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