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Buying your first aircraft is an exciting and joyful adventure but can diminished if the acquisition process does not go accordingly. It can be quite daunting for a first-time buyer wanting to acquire an aircraft whether it is for business, pleasure or both. Before you get too excited about holding your new aircraft keys in your hand, let us address some of the most frequently asked questions and concerns when buying a new or pre-owned aircraft.
How can I be sure that I have picked the right aircraft?
Make sure the aircraft you are considering buying is suitable for your needs and requirements. In order to establish whether the aircraft to purchase is suitable, answer yourself the following questions:
What is the typical mission of travel? Where would I be travelling to and from?
How many passengers would normally be travelling with me? If you have small children, bear in mind that they will not be small for very long and consider that the cabin might not suffice in a few years.
Would I primarily utilise a grass, gravel or tarmac runway (or a combination of all three)? Many aircraft are equipped to land on all of them, though there are exceptions.
What are the sizes and altitudes of the airports that I would frequent – the length of the runways and fuel availability? Many airports only provide JET A-1 or Avgas, but most have both.
What is the capital available for this investment?
What is the budget available for annual operational expenses? How much will each aircraft option cost me annually?
How often will I be using this aircraft? Consider that the aircraft you have in mind could be utilised for charter, flight training etc. when not in your use, providing you with additional income to help maintain the aircraft. It might end up “washing its own face!”
How do I know whether the aircraft I am buying is value for money?
Is the aircraft worth the asking price? To determine this, there are some very important factors that could affect the actual value of the aircraft as well as your resale value in the future.
Total time on the aircraft’s airframe and engine hours do influence the value of the aircraft. Having low airframe and engine hours is in some cases not a good thing, especially if the aircraft hasn’t been flown regularly. Engines might not have reached their TBO time (Time Between Overhaul), but due to infrequent use seals and other engine components may have not been lubricated properly. It is important to have a record of consistent use, paired with a good maintenance history. Don’t be afraid of considering high time engine and airframe aircraft. They are in constant flying condition and frequently maintained.
Depending on the installation of additional equipment, avionics, air conditioning etc, the value of the aircraft could be considered to be of higher value. Be prepared to pay a little more for these additions.
If the aircraft has damage history, it could affect the value of the aircraft that you are seeking to buy. Aircraft with damage history could see a decrease in value, depending on the type of accident, the damage on the aircraft and which major components were affected. Repairs to the aircraft should have been done properly and in accordance with the regulations and recommended practices.
Be aware of aircraft that have recently been resprayed. Make sure the exterior paint is not superficially covering possible signs of corrosion under the surface. Recently refurbished interiors should be closely examined to determine the condition of the interior and should fit properly as designed.
Should I buy through a broker?
It is strongly advised that you buy aircraft through a well-established, experienced aircraft broker. Any broker worth their salt will help to lead you through the process from aircraft selection, pre-purchase inspection, documentation and after-sales service. They have knowledge of the current market conditions, experience in past sales, expertise in dealing with issues along with a network of other brokers that can help smoothen-out your aircraft purchase. Establish whether the broker requires a flat fee or a percentage of the sales price to retain their services in advance. This should eliminate unexpected commission fees that you did not equate for.
What is an Offer to Purchase and when do I sign it?
The Offer to Purchase is a document that is designed to protect both the buyer and the seller. It stipulates the expectations of both parties. It is a legal, binding document and once signed it is not easily amendable. Before signing the Offer to Purchase, read the document carefully to ensure that all the terms and conditions regarding the purchase of the aircraft are clearly encapsulated in the document. It is extremely important that reference is made to the aircraft registration, serial number, make, model, total time, equipment list, logbooks, aircraft documents and damage history. Be aware that in most cases the aircraft can still be actively marketed even after the offer has been accepted, unless duly stipulated in the Offer to Purchase that the aircraft is to be removed from the market for a certain period of time.
Should I conduct a test flight?
Insist on a test flight! A test flight should ideally be conducted for at least one hour in order to get a proper “feel” of the aircraft. If you are unable to conduct the test flight yourself, it is best to recruit the assistance of a pilot of a similar aircraft or a professional test pilot. During the test flight, ensure that you or the test pilot check all equipment and systems carefully to determine whether they are fully functional. The costs of the test flight are usually at the expense of the prospective purchaser. Best advice is fly before you buy!
Is it necessary to have the aircraft undergo a pre-purchase inspection?
In a perfect world we would expect the seller to disclose all known defects on the aircraft, but unfortunately it is unwise to purchase an aircraft on good faith alone. By appointing a certified, well established maintenance organisation to perform the pre-purchase inspection, you will enable the verification of the status of the aircraft, overall condition, and history of the aircraft. Conducting a pre-purchase inspection could possibly uncover defects preventing surprises and unforeseen maintenance issues later. This is a critical step that enables you to make an informed decision on whether the aircraft you are wanting to acquire is the right option for you. Maintenance Facilities can be found in the AvPay Directory.
Do I buy cash or finance?
Seek advice from your financial advisor prior to deciding whether to purchase the aircraft cash, obtaining finance, or both. Depending on circumstances such as in which country you live, interest rates, affordability and exchange rates have a vast influence on determining what the best option is for you. It is wise to ensure that the funds you require either as deposit, down payment, or complete purchase price is available or accessible before you sign the Offer to Purchase, in order not to slow the purchasing process down.
Do I really have to have insurance?
By law it is required that all aircraft owners must have Public Liability Insurance. This type of insurance covers damages to external properties or people but does not include any coverage for damage to the aircraft itself or any passengers onboard. It is very important to make sure that your aircraft is properly insured. You can opt for Passenger Liability Insurance that will cover passengers should any harm come to them. Combined Single Limit Insurance covers public liability and passenger liability. In the event of physical damage to the aircraft itself whilst on the ground, Aircraft Hull Insurance will cover that damage, depending on whether the aircraft is insured under the non-motion or motion hull policies. It is advisable to obtain as many quotes from as many insurance brokers as possible. By comparing the different policies and rates, you will be able to determine which option is best suited for you and your circumstances. Two companies we recommend contacting for aircraft insurance are ARC Aviation and PilotInsure.
Are upgrades worth it?
Depending on the make and model of aircraft you ultimately end up buying, having certain upgrades could add value to your aircraft. Be conscious not to over-spend on your aircraft. This could inhibit your resale proficiency later. Aircraft upgrade options are available for the flight deck, engines, interior and exterior or all the afore mentioned. Older model aircraft might require a few additional avionics installing to catch up to modern technology (such as ADS-B). The same may apply to engines where the elder are less fuel efficient that later models. Various engine upgrade options are available for different models. Interior and exterior changes can be made to suit your preference.
Which maintenance organisation should I use?
Do proper research! You should select a reputable, certified maintenance organisation to look after your very expensive asset. Ask around in your flying circles for recommendations. Do not assume that the nearest AMO (Approved Maintenance Organisation) is the best. If you need to relocate your aircraft to a different airport in order to obtain the best maintenance service, do not hesitate to do so. Most AMOs offer return-to-destination services. Ensure that the AMO you choose has a good safety record with an approved SMS (Safety Management System) in place. Enquire and confirm whether they offer a maintenance planning service. Maintenance Organisations can be found in the AvPay Directory.
Is the overall upkeep of an aircraft expensive?
Yes, it is. You need to ensure that you calculate and allow for anything from 10% to 45% of every hour of that your aircraft is in the air, totalling your yearly operational expenditure, depending on the size of the aircraft that you have purchased.
Disclaimer: this article was written by an author that has over 20 years of experience in the aviation industry. This article does not reflect the opinion of AvPay in any form whatsoever. The information contained in this publicised matter are believed to be dependable.
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