How much does a private jet cost to buy?
Let’s face it. Flying commercially, even if you’re flying first class, sucks. If only we could all be Tony Stark, flying whenever we want – sipping brandy while we watch the clouds roll by.
But wait, what if we could all be Tony Stark? The cost of private jets has been more affordable, and there are options you can choose to lower the overall price. So, let’s go over how.
The Price of Flight
A jet will cost you anywhere from $350,000.00 to $90 million. If that price scares you, don’t worry, you could always go with a fractional share or membership option and fly like Tony without breaking the bank too badly. We have an excellent aircraft valuation tool on our website to help you determine what aircraft values genuinely are in this quickly changing market environment.
Due to the large upfront price, it’s easy to think that a private jet is out of your reach. That’s where you’re wrong. Even considering the high, yearly maintenance and fuel prices, the cost to buy a private jet can be affordable if you do your homework and if you shop responsibly.
Building up to the Purchase
When considering which jet to buy, consider chartering flights from a company specializing in the jets you’re considering. The more you can try out what you need, the better off you’ll eventually be in the future.
Usually, a flight on a chartered plane costs between $1,000 and $10,000 per hour. Chartering flights and trying out different jets can save you a lot of money in the long run.
That’s a win in our book.
Taking the Plunge
When you’re buying a personal jet, how you decide to pay is everything. So, what payment methods are right for your budget? Well, it’s rare for someone to be able to pay outright for a private jet, so most borrow from a bank or financial institution.
Taking out a Loan
Like buying a house, you borrow money from the bank to pay for the jet in full. Then, you owe the bank the amount that you weren’t able to put down initially.
Personal loans for this amount of money can get a bit tricky to qualify for, so you’ll need to find the right lender. This buying method is only for a select few. Luckily, if you’re reading this, you’re probably one of them.
Make sure that your credit history is stellar, and your accounting is in order. When you approach a lender, they will need to know that your financial record is spotless before entrusting your collateralized loan in this amount.
Many high net worth individuals will use a home equity line of credit or a credit facility that uses a stock portfolio for collateral. It comes down to your relationships, the type of aircraft you are buying, and the credit worthiness of the borrower. Some institutions will not loan on aircraft older than 15 years, and some will only lend on planes under $3 million. Finding a lender is not always easy, so an alternative is a Finance Broker.
Found a Plane, Get an Appraisal Done
Now that you know how you want to pay, it’s time to find your aircraft and get your appraisal done. An assessment will be an essential and mandated part of the lending process. Most banks will require an appraiser to value the aircraft. Picking the right appraiser is just as critical to picking out the right plane.
We offer USPAP Compliant appraisals as part of our valuation services, so if you’re looking to buy a plane second hand, then reach out.
In many cases, leasing can be a viable option for ownership. You won’t have to worry about the future residual value or finding a buyer. If you’re only looking to have the private jet experience without tying up millions of dollars, consider leasing.
Leasing a plane is a lot like leasing a Ferarri, Bugatti, or Lamborghini. You get to “own” the jet without having to worry about long term maintenance or depreciation. Typically, a jet’s lease will last anywhere between a few months to a few years. Additionally, you’ll have several options when it comes to leasing your jet.
- The Wet Lease: Wet leases are usually all-in-one packages. The lease itself pays for a crew to operate your plane for you. This leasing option is more expensive, but the cost of your flight crew bundles into the overall price, so you’ll never have to worry about paying them.
- The Dry Lease: Dry leases require the lessor to provide their flight crew. If getting the lowest total price by picking what you pay for is your goal, this option is for you.
Your Next Options: Private Jet Memberships and Fractional Ownership
If buying, or even leasing, is too expensive, try out a private jet club membership or a fractional ownership agreement.
With a jet club membership, you’ll be paying for access to just one seat on luxury jets, but that’s still leagues beyond a regular first-class flight. Even better, jet clubs are affordable if you’re not rich, but you fly frequently. Prices range from $2,000 to $30,000 a year, but that can quickly pay for itself over a short time.
Next up, fractional ownership. Fractional ownership works like a timeshare. You pay for 50 to 800 hours of flight time, depending on how much you need for the year. These plans are great if you want to save a sizeable chunk of money while still having the entire jet to yourself.
So, How Much Does a Private Jet Cost to Buy?
It’s easy to see that the price of a personal jet can fluctuate wildly, depending on your situation. So, before taking the plunge, ask yourself, “should I buy a private jet?” Think long and hard about how frequently you’ll need a jet. Maybe joining a club or entering a fractional ownership agreement is the responsible decision.
Keep your options open and reach out to us if you’re wondering, “how much does a private jet cost to buy?” and you need help. We’re the experts, after all. Contact Jason Zilberbrand, ASA for all of your appraisal needs. [email protected]