Buying an Airplane: The Nuts and Bolts
Buying an airplane is something most pilots dream about. But whether you’re a first time buyer or an old hand at aircraft ownership, a successful purchase requires a clear understanding of the mission, careful consideration of the capabilities and limitations of both pilot and aircraft, and a realistic view of the cost of aircraft ownership. With careful attention to detail, buying an airplane will become a rewarding experience that gives you a new found sense of freedom and pride.
To help the prospective aircraft buyer, we’ve collected a few frequently asked questions:
Before you decide what kind of plane to buy, you may want to consider what kind of ownership situation is best for you. Here are some common arrangements:
Sole Ownership: This offers the greatest amount of flexibility because you make all the decisions, and the plane is available whenever you need it. This method works out especially well if you have a business use for your plane, thanks to favorable tax laws.
Partnership: This is a great option, but you need to choose your partners carefully. Premier can direct you to a knowledgeable attorney to help you devise a good agreement. In many cases, we can help you find potential partners in your area.
Leaseback: Leasing your airplane back to an FBO or flight school not only defers some of the cost of ownership, it can also turn your airplane into a profit center. The drawback is that strangers will be flying your airplane. Premier will be happy to work with you to set the right expectations and look for leaseback opportunities in your area. To learn more about types of aircraft ownership.
Mission: The “right” airplane depends on your most frequent mission. Some pilots use their aircraft to facilitate business travel, so speed is important. Others use theirs for recreation and fun – the fabled “$100 hamburger runs” – so low operating cost is a goal. Others travel to a vacation home loaded with kids, baggage and the family pet, so useful load is critical. Where will you most often go? Who and what do you normally take with you on a trip? How important is speed? Do you need to fly in weather? Your logbook is a great place to start. Once you have a good grasp of your typical mission, it will be easier to choose the right airplane.
Cost: For most pilots, the cost of aircraft ownership is a critical consideration. While the purchase price of an aircraft is significant, in the long run other costs can end up being more important. That’s why knowing your total cost of ownership is so important. For example, older light twins can often be purchased for less than a newer single, but the higher cost of training, insurance, fuel and maintenance can quickly eat up any savings in purchase price.
Capability: It’s extremely important to match your skills and experience with an aircraft that suits your capabilities. Talk with an insurer early on to see what pilot experience requirements or additional training they will require before writing you a policy. The most important aspect of safety is the pilot, but the planes do make a difference. Ease of use, dependability, safety features and crashworthiness vary from model to model. You should familiarize yourself with the published safety records of the models you are comparing. For example, Diamond Aircraft enjoys the best safety record in the industry, and Diamond and Mooney offer cabin protection superior to all other brands. Diamond is the only manufacturer with a 26G cabin—a level of protection far in excess of FAA requirements. Your Premier sale representative can help you compare the safety advantages of the aircraft you are considering.
Desirability: this is a final consideration. Owning an airplane is often the fulfillment of a dream. You want to buy an airplane that you are proud to own. Don't get so caught up in all the numbers that you buy a plane that doesn’t make you smile. To learn more about what kind of aircraft is right for you.
Financing is available in terms up to 20 years or more for new airplanes, at interest rates similar to that of home mortgages. Used aircraft are often limited to shorter-term loans. Some buyers who do not plan to use their airplane for business will often use home equity loans in order to get tax advantages. Your Premier representative will discuss the process with you and help you find the right financing sources. To learn more about financing your aircraft.
Pay close attention to tax incentives, which vary from year to year. In recent years, they have been considerable. With legitimate business use, federal tax incentives make purchasing any airplane more affordable; often a brand new airplane is just as affordable as a used model. Take the opportunity to discuss your own situation with your Premier representative and with an experienced aviation tax professional. We can refer you to an aviation tax specialist if your personal attorney or accountant does not have specific knowledge in this area. To learn more about tax implications of aircraft ownership.
Simply put, we wouldn’t sell an airplane we wouldn’t own ourselves. Our goal is not to sell you an airplane; it’s to provide you with our best professional advice on your aircraft purchase. We offer only the finest new and late-model used airplanes, and if we do not have the right plane for you in our inventory, we will use our worldwide network of other dealers to find it for you. We know that if we help you make a good decision now, we will have made a friend for life. To learn more about why to buy an aircraft from Premier, please contact us.