With many aircraft sales happening across the months of 2017, the market is definitely changing, notes Jet Tolbert. While many of the ‘polished gems’ have been plucked from the surface, buyers can still find a great aircraft that can meet their needs…
It is true that many of the nearly-new jets and turboprops have been snapped-up from the marketplace. It is also still as difficult as ever for buyers to ascertain value in this fluctuating market.
There is no reason to be discouraged, though.
We are not yet at the point of entering a seller’s market and there is plenty of great value to be found for buyers willing to dig a little deeper into the used jets on the market.
Following are some tips on ‘bagging a beauty’ from the next layer down…
Don’t Rush Your Selection
As the calendar year draws to a close, the number of buyers entering the market tends to increase along with the number of sellers. The majority of these buyers are current owners looking to upgrade their aircraft – a dynamic that will feed additional aircraft onto the used jet markets.
Tax laws tend to favor end-of-year new aircraft acquisitions, which will likely create knock-on opportunities for buyers of used jets who are ready to snap up the aircraft that buyers of new aircraft need to sell to make room for their shiny new acquisition.
While there are a lot of drivers that could potentiate market activity past December 31, generally speaking, Q1 tends to slow down somewhat.
If, as a buyer, you can wait until the New Year you may find less competition in the market and less pressure on the transaction.
Be Prepared & Market Savvy
The market may have ostensibly dried up, but the better informed you are about all of the available options and their true acquisition value, the more likely you will be aligned with a seller’s expectations and subsequently find yourself first in line for a potential purchase.
You should know about:
You should also be prepared to consider all aircraft models within your field, and in doing so, position yourself to identify a potential – perhaps less obvious – bargain.
Market awareness will ultimately enable you to make a first offer close enough to get traction with the seller, and give both parties the confidence to follow through.
Furthermore, you should avoid creating any surprises after an offer is made, whether about the aircraft itself or your financing. This will only drag out the process and risk the deal collapsing. You may even gain a reputation as an unreliable buyer within the selling community. Be sure to have your financing and operational factors established before making an offer.
Value Doesn’t Always Equal Price
The airplane you may have seen over the summer that is now sold could have gone above or below current market value, but consideration of the multiple factors that can impact the selling price may reveal more to the sale than was immediately apparent.
Using the services of an experienced aircraft dealer/broker will help bring insight into recent sales, the value of upgrades and maintenance history to help paint an accurate picture of the marketplace.
Not only will the right buyer’s agent assist with pricing, but a well-connected firm will be able to bring together the other aspects of the transaction and operation to get you flying in the right direction.