Purchasing the right aircraft, at the right price, with the right terms, and avoiding unpleasant surprises can be a daunting process. Unfortunately, because of this, some aircraft buyers do occasionally make mistakes in their buying journey. Here is our advice on watching out for the most common pitfalls and how to avoid them.
Don’t Base the Purchase Solely on Price—Some buyers believe that buying the cheapest is always the best option. Instead, buyers should purchase a well-maintained aircraft with a good pedigree (not too many owners, with a solid manufacturer’s maintenance program, and service performed at an authorized center that kept well documented aircraft records and engine logs), rather than looking for a bargain deal. If not, it could leave buyers with additional maintenance costs down the road. It is important that a buyer knows whether or not the aircraft for purchase is enrolled in a manufacturer maintenance plan, or if there is any remaining warranty that can be transferred.
Don’t Overlook Inventory from Other Regions— A buyer shouldn’t make the mistake of only considering aircraft within their home region for purchase. Many buyers are hesitant to explore foreign inventory, believing that the aircraft may be poorly maintained or managed. The reality is that there are aircraft owned or based all over the world that are managed by top operators in the industry. They go through rigorous maintenance at leading manufacturer-authorized service facilities. If an aircraft in another region seems to be a good fit, don’t be afraid to begin the conversation to find out more about the aircraft’s history.
Trust Your Broker— Aircraft buyers often believe they can get the best price by talking to several brokers at the same time. We advise buyers to select one partner and work solely with them to negotiate the best value, and to avoid seeking insight from other brokers who are not involved in the deal. Doing so could lead to other interested parties submitting competing offers, causing the price to rise and possibly derailing the deal.
Arrange Financing at the Beginning —A buyer who needs financing should make sure they have an approval in principle from a reliable lender before starting to look for an aircraft. This will inspire confidence to the seller that the buyer has the financial capital to execute the transaction, and ensure the deal closes on time.
Choose the Right Closing Venue— Many buyers forget to assess the tax risks before selecting a closing venue, which could leave the parties exposed on both sides of the transaction. Buyers should always consult their tax advisors and understand the risks before committing to a specific venue, as well as any venue-specific requirements to document the transaction.