Aircraft Trust Companies

What Is the Right Time to Buy a Business jet?

By January 21, 2019 January 28th, 2019 No Comments
aircraft trust companies

For the last two years, there is a revolution in jet markets. While aviation assets have largely depreciated, the U.S. economy and the availability of unprecedented tax reductions for new and used airplane purchasers have ensured price stability while improving the management of new purchases and upgrades. Those who need a business jet or turboprop find ways to make use of these tax incentives and purchase them for the next time at a 20 percent discount. Up to 2021, the U.S. market will benefit from a 100% tax depreciation.

Market Has New Products

For example, the new Gulfstream G500 and G600 jets have replaced the G450 and G550, which might lead to additional pre-owned G450 and G550 jets on the market in 2019. When the new price is higher than the predecessors, the recent pressure from the new aircraft sale of Gulfstream may not be as stabilizing as the market was.

When the condition is more favorable for sellers than it was two years ago, sellers must be realistic as to what the market will pay for their jets.

Opportunities – Older and Used Aircrafts

There are plenty of used aircrafts on the market, industry analysts and aircraft trust companies have confirmed. Though the selling process is slower, still, some buyers are interested in buying used jets if these could be upgraded within budget to meet requirements. Buying such a jet can be quite a deal if these are quite older.

Even there are plenty of jets available that are made in the 1990s and even 1980s and still can be used and have an affordable price. While the aircraft buyers should be aware that they might become the last owner of an aircraft, the purchase price can be very low–insofar as the total part can sometimes exceed the whole amount, making the aircraft feasible. Buyers who shop in this segment usually look for an annual budget rather than an acquisition price to find a balance justifying ownership.

There would appear to be a smart comparison between buying a $700k jet costing $1m / year, versus a smaller one, with a budget of $700k, of the same vintage, and an operating budget of about $300k.

Experience has shown that buyers’ queues tend to disperse if the cost of an aircraft is less than 2 to 3 times as low as the annual operating budget so that shoppers in the lower end of the market are made aware of the exit strategy.

The FAA still has registration policies for a used jet. If you can’t understand how to register your jet come to Aviation Trust. Aircraft trust companies like us help people to register an aircraft under the FAA regulations, so you can fly with peace of mind.

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