Buying an aircraft
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Buying an aircraft
Can some one with the correct experience please give me in detail the procedures to buy an aircraft. From the prepurchase to the final delivery
Thanks
Thanks
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It is more involved than I would like to post on an open forum. As I earn my living advising people exactly what you want to know. It would be like flying for free, if you understand.
There are many pitfalls that an unwary prospective aircraft buyer can fall into. Especially used aircraft. New aircraft as well have unique issues that must be addressed.
However, a little more information would be helpful.
C-P
There are many pitfalls that an unwary prospective aircraft buyer can fall into. Especially used aircraft. New aircraft as well have unique issues that must be addressed.
However, a little more information would be helpful.
C-P
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The transaction process has nothing secret and should be known and understood from the beginning. A good seller should be able to inform its customer for free. Here is a sample of a standard process:
Once you have identified the right machine (model, price, specs, JAR-OPS or not etc.) you'll need to initiate the process with a letter of intent (sometimes called purchase offer). This letter is often provided by the seller and is not a binding document. It's basically including your price offer and the outlines of the transaction, most of which are as follow:
- Deposit: To show the seller you are serious about the deal you will most of the time need to place a deposit into an escrow account (open in a bank as a neutral party according to specific terms and conditions). This deposit will basically "buy" the exclusivity on the aircraft for a limited period (1-2 months) during which you'll be able to process the next steps. At the end of the period, if the deal hasn't been finalized some or all the deposit should be transfered to the seller (you have to pay for the exclusivity period).
-Purchase agreement: This is the formal document that will rule the deal. It needs to be carefully prepared and reviewd by both parties. Negotiating this agreement is often a pain when it involves people with little knowledge of the industry. Looking for an experienced aviation lawyer could be a valuable option.
-Pre buy inspection: In this very important stage you will have the aircraft inspected by yourself or a neutral third party who will issue a report on the aircraft condition. Depending on the status of the aircraft you will sometimes negotiate the price or even reject it if you find major differences from the initial description. In case of a justified rejection the deposit should be entrirely refunded.
Once both the purchase agreement and inspection are accepted the escrow agent will transfer the deposit to the seller and the buyer should pay the remaining. The transaction wil also involve technical and administrative issues which are case by case and can't be described easyly.
I think it's the right time to buy as the market is very low. Some recent low production machines will probably keep long lasting values and will probably not last long on the market, while older models will remain for a while and never recover value. Good luck
Once you have identified the right machine (model, price, specs, JAR-OPS or not etc.) you'll need to initiate the process with a letter of intent (sometimes called purchase offer). This letter is often provided by the seller and is not a binding document. It's basically including your price offer and the outlines of the transaction, most of which are as follow:
- Deposit: To show the seller you are serious about the deal you will most of the time need to place a deposit into an escrow account (open in a bank as a neutral party according to specific terms and conditions). This deposit will basically "buy" the exclusivity on the aircraft for a limited period (1-2 months) during which you'll be able to process the next steps. At the end of the period, if the deal hasn't been finalized some or all the deposit should be transfered to the seller (you have to pay for the exclusivity period).
-Purchase agreement: This is the formal document that will rule the deal. It needs to be carefully prepared and reviewd by both parties. Negotiating this agreement is often a pain when it involves people with little knowledge of the industry. Looking for an experienced aviation lawyer could be a valuable option.
-Pre buy inspection: In this very important stage you will have the aircraft inspected by yourself or a neutral third party who will issue a report on the aircraft condition. Depending on the status of the aircraft you will sometimes negotiate the price or even reject it if you find major differences from the initial description. In case of a justified rejection the deposit should be entrirely refunded.
Once both the purchase agreement and inspection are accepted the escrow agent will transfer the deposit to the seller and the buyer should pay the remaining. The transaction wil also involve technical and administrative issues which are case by case and can't be described easyly.
I think it's the right time to buy as the market is very low. Some recent low production machines will probably keep long lasting values and will probably not last long on the market, while older models will remain for a while and never recover value. Good luck
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I think it's the right time to buy as the market is very low. Some recent low production machines will probably keep long lasting values and will probably not last long on the market, while older models will remain for a while and never recover value. Good luck
Pace
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PACE you are absolutely right. Financing is a problem but that's also one of the reason why prices are low... When financing will become more accessible prices of the most demanded machines will quickly go up while older and numerous ones won't.
Buyers have basically two options:
Buyers have basically two options:
- They go for a recent model which will keep value and be marketable in few years (buying 30% below market value could even be an investment, aircrafts are marketable worldwide on the contrary of properties...)
- They decide to go for an older model at a very low price (1998 Lear 60s are available at $5m, 1999 C604s at $15m etc...) but they will increase chances of not being able to resell in the future as there will still remain a lot of similar machines on the market
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He wants to buy a Challenger 600, but has no idea what this aircraft can do, as posted here
And no one wants to share with him how many people it can carry...
And no one wants to share with him how many people it can carry...
