Have you ever had the dream of owning an aircraft? Does the thought elicit fantasy-like imagery of you soaring above the clouds as you jettison off to some Carribean island?
If it’s always been your dream to own a plane, it might be more financially viable then you thought. There are not only several ways you can potentially afford the aircraft of your dreams, but also some creative ways to get in the air quickly.
Today, you don’t have to be a billionaire to own an aircraft, especially if you’re looking into a smaller airplane to fly for recreation, or take a loved one on the journey of a lifetime.
So where do you start? It’s essential to follow a process when buying an aircraft regardless of its size. We created this simple guide for beginners so anyone who wants to own a plane can.
Keep reading to learn how to buy an airplane.
1. Know What You Want and Why You Want it
The first thing you need to do is figure out what you need and want in an aircraft. If you’re looking for a cropduster, you’ll need something vastly different than if you’re looking to take groups on luxury flights. In all seriousness, this is a much more difficult decision for beginner pilots. It’s hard to know what you need from a plane, things like its size, number of seats, how far it will fly, to stuff like nearby maintenance centers, insurance costs, and how much it will cost to operate. There is a perfect reason as to why so many models exist as many factors determine the ideal aircraft for you!
I always suggest a first-time buyer go to a fly-in, or an airshow and look at aircraft, get in them, kick the tires and ask questions. You might love how one plane looks, and you didn’t realize it’s just too small for you. Likewise, seeing them all in person close to each other will help you identify traits not so apparent at first.
2. Set Your Budget and Add 10%
Once you know the type of plane you want, you can start looking to determine the approximate price of that type of aircraft. Being able to stretch your budget is where some creativity and due diligence will pay off. There are aircraft for every budget. So who will finance it?
Did you know AOPA FInance sources aircraft loans? They do, and they work with a fantastic group of lenders from small regional banks to credit unions. They make the process simple, and you might even be able to borrow to include refurbishment or some updated avionics. After all, now that you are buying an aircraft you at some point decide to customize it or utilize newer avionics equipment. Your lender will help!
3. Kick Tires, Search, Search and Search
When a market is hot, finding aircraft is not easy. You will often find out that the plane you had your eye on was also the dream machine of 40 other buyers and someone beat you to it. I tend to see this occurring more and more in specific piston markets. So what’s the trick to finding a great aircraft? For one, I like to use Facebook Groups, Owner Forums, and maintenance facilities. However, I have news for you; if you are only interested in a private sale, you may be missing out on an opportunity to develop a relationship with a local dealer who will not only support your aircraft beyond the purchase but be there when its time to upgrade. HINT, some dealers, if you are friendly, might even give you the heads up about an aircraft someone else is thinking about letting go. So don’t limit yourself to a marketplace or classified listing. Get active in the community, and make friends in those forums.
4. Get a Verified Value Report the “CarFax” of Aviation
Once you’ve found a plane or planes within your budget that looks promising, you’ll want to get a VREF Verified Report. The Verified Report is the “CarFax” of aviation, and it provides all that you need to know to decide about which aircraft to focus your buying efforts.
Our report includes Value history, market demand, serial number specific Retail Value, Damage History, and much more. These, along with the rest of the report, will give you everything you need to decide if you want to keep pursuing that plane. It can also help you in the negotiating process.
Once you know what you want to pay, you can determine what you should pay by using VREF. So whats next? Its time to make the offer, which most of the time a buyer will send a written offer. However, let’s not jump ahead too far. I always suggest you find an aviation attorney to assist before buying so that he or she can set up a proper entity to own the aircraft, which will also protect you and your estate if there were ever liability. You will also want to talk to your accountant so that you understand what the tax ramifications are and where to establish your closing venue. Once these components to the purchase are complete, you can make your offer, provide proof of funds or your deposit to the seller and have your lender make the arrangements for your loan. Keep in mind, most if not all of the banks will require an Appraisal of the aircraft before they will send you a commitment or approval letter. The reason being, the bank needs to know what the asset is worth at that moment in time.
6. Research Insurance BEFORE you commit
Once you know which plane you’re going to buy, you’ll want to look into insurance. Make sure you have a broker or agency you can work with and don’t leave this to the last minute as you might be wishing you hadn’t if those premiums come in substantially higher than your budget was forecasting. Insurance brokers are so crucial to a successful aircraft purchase that I can not emphasize enough you need to build a relationship with someone. There will also come a day that you will need solid advice on how to deal with a claim, so get a reputable agency to set up your binders.
7. Buy Your Aircraft!
At this point, the only thing that’s left to do is to finalize the purchase!
Phew, that wasn’t so bad, was it? Now that you are an aircraft owner, the world is at your fingertips. So pack a bag, grab a friend or family member, and explore!
How to Buy an Airplane: Are You Ready?
Now you know how to buy an airplane. As you can see, it’s a relatively simple process that’s extremely rewarding.
If you need a loan to make this purchase, check out our post on the aircraft loan process. There, you’ll learn everything you need to know about getting the money you need now to make your dreams come true.