4 key mistakes to avoid when buying a business jet
Buying a business jet is no day’s work and requires thorough research and planning. This is an expensive asset that requires a team of advisors who can help with this decision. Aside from regulations and licenses, relevant authorities have set rules to ensure the jet is a necessity. If you are in the market for buying a business jet, here are some tips to avoid certain mistakes that you may make in the purchasing process.
Not having a proper advisory team
It is imperative to hire a professional aviation advisor who can help you with this big purchase. Yes, there are plenty of options available on the internet about what planes to buy and so on. However, an experienced advisor can help you with several complex details that you, as a business owner, may not have the bandwidth to deal with. Learning and truly understanding the technical and legal details of the purchase can be complicated.
One of the first steps for buying a business jet is charting an operational plan. This involves details like ownership, taxation, and so on. The plan also helps to avoid any Federal Aviation Administration civil penalties that could happen due to lack of paperwork or wrong paperwork.
Buying the wrong-sized plane
One cannot neglect factors like the size of the plane to buy, how many people it can fit, and whether it is comfortable for long flights or short journeys. It is recommended not to pick a model simply based on what other businesses have because their needs might be different from yours. So, always look at what you aim to achieve out of the private jet before approaching a particular aviation company.
Ignoring the operating costs
Even if you have the capital to pay the purchase price of the business jet, do you also have the finances to cater to its operating cost? This is a big question that needs to be addressed during shopping. Check for expenses like maintenance, repairs, management fees, pilots, operating costs, hangar costs, and insurance. If you are considering buying an older model, which may be for sale at a lower price, check if this bargain price is worth the risk of maintenance it needs after purchase.
Not hiring professionals
When it comes to managing the aircraft, you need to hire a professional team. An aircraft manager has training and knowledge of the rules and regulations that need to be followed strictly. When purchasing the plane, also start looking for the right manager to help you manage it and its operations. This is also a post-purchase cost that must be considered in the decision.
Some other tips to note are that you should make sure you have the financing secured when looking for this purchase. The loan documents can take weeks to come through, and you don’t want to be pressured into anything, so prepare for this timeline when you are shopping for jets. If you have bought a plane before, you can also do a quick health checkup of the plane and get some basics in place to understand if you want to continue with this purchase.
