A Guide To Buying Your Own Private Jet
Buying your own private jet isn’t a transaction you run into every day nor is it a small investment of your hard-earned money. You’ll need to consider all factors and angles before making any final decisions lest you get stuck with a multi-million-dollar aircraft that is bleeding your bank account dry from the needed upkeep. Here’s everything you need to know before buying your own private jet.
Determine Your Budget
Cost is perhaps the biggest issue when buying something this expensive. In addition to the cost of the aircraft, you’ll need to factor in cost for ongoing maintenance, replacement parts, pilot and crew wages, insurance, fuel, parking and ground fees, landing fees, and any interior or exterior upgrades. Unfortunately, as with owning and operating a car, everything that you do with your jet will likely cost you money. Even getting your management contract in place may yield legal fees.
Weigh the Pros and Cons of Buying vs Leasing
Buying a private jet means that you pay cash outright or get financing from a bank that can purchase the aircraft for you. Someone from a private jet charter in New Jersey can give you good leads and recommendations on banks and lenders that can lend you money for your prospective aircraft.
Leasing, on the other hand, is divided into two groups – wet and dry. A wet lease provides both the aircraft, staff, upkeep, and insurance. Meanwhile, a dry lease only provides the aircraft and nothing else. Talk with your aviation lawyer or any aviation specialist to determine if financing or leasing is better for your circumstances.
Find a Broker or Dealer
You will need a transaction adviser to help guide you through the process of buying a private jet. A transaction adviser can draft an offer or letter of intent, either long-form or short-form. The adviser will also review the proposed transaction structure and determine any tax implications of said transaction.
Figure Out the Paperwork
You will also want to get in touch with a specialist aviation lawyer that can conduct due diligence concerning the title and any outstanding liens on the private jet. Your lawyer or buyer can also negotiate the finance term sheet on your behalf.
Lastly, you’ll have to sit down and figure out a mutually agreed-upon aircraft purchase agreement, which basically details who pays for what. Once the aircraft purchase agreement is signed, you can inspect your prospective jet.
Find a Reputable Management Company
A management company, as the name implies, handles the bulk of aircraft operations. Having a reputable and efficient management company will make getting your jet airborne easier and put up service requests for repair or maintenance. Look for a management company that works with skilled mechanics with experience with the type and model jet you have.
Carry Out Inspections
You and your team, including shareholders and lawyers, will review the private jet’s logbook, which details the back-to-birth records. These records indicate, in great detail, every installation and procedure done to the jet since it rolled off the manufacturing floor.
If you are financing the purchase of a jet, your lender may also ask that a third-party appraisal be done. In some cases, the jet is both appraised and inspected a second time pre-purchase. A test and relocation flight may also be done during this transaction phase.
Register the Jet to Reflect New Ownership
You’ll now have to register your aircraft and declare the ownership structure. You may need the help of a specialist dealing with a private jet charter in New Jersey or an operator. You will then have a registration number reserved for your jet and have certificates, including a certificate of airworthiness, exported. During this phase, the buyer and his/her team also iron out the plans for upkeep.
Now that you have gained a deeper insight into what it really costs and the logistics involved in purchasing and keeping a private jet, you can make a more informed decision about whether or not such a purchase makes financial and practical sense. You can also consult a private jet charter company to determine which option best works for you.