When thinking about getting an airplane, the most common question is asked about aircraft financing. You have two options to consider, either to buy it or lease it. And the answer to this question depends on your requirements. There are pros and cons to both processes. However, the choice depends on you.
In this article, we have discussed the benefits and disadvantages of buying and leasing private aircraft. You can then decide which one of them is the better option for you.
Buying an Aircraft
If you own the airplane, you are in control of everything and not responsible to answer anyone about its use, unlike when you lease it. Financially speaking, by buying the plane, the owner will enjoy every benefit. It means if there is an appreciation in the value of the aircraft, they will be the sole entity to benefit from it. Also, they have the complete authority to decide whether they want to charter the plane or lease it. Looking at the situation from a tax perspective, the owner will be responsible for any tax deduction when the aircraft’s value depreciates. Also, for any expenses that occur due to the business use of aviation.
However, on the other side, this option can prove to be more expensive in comparison to looking for airplane financing to lease the aircraft. Also, the value of aircraft mostly depreciates with time, so when it’s time to sell it, you’ll get a much lower value than the original price you paid.
Traditionally, the option of buying is more suitable for large private companies or individuals who have a high net worth.
Leasing the Aircraft
There are several financing companies like Air Fleet Capital that offer lease plans for the buyers. This option is becoming the preference of many businesses, mainly, due to its affordability. With leasing, you not only save the upfront cost of buying but also the cost of ownership is lower. Therefore, you do not only save cash in the short term but also the long term. The businesses can use this saved money elsewhere to boost the company’s growth.
Another benefit of looking for easy aircraft financing for leasing is that you are not stuck with the same model. Depending on what kind of lease you took, you can walk away from the specific model aircraft, once the terms of leasing are completed. There will be no need to waste time on finding a buyer and sell the plane at depreciated value.
The downside of pursuing leasing is that the financing companies will not approve the request for several models, especially for the old ones. It can restrict the options for the best aircraft financing.
Which One’s More Suitable?
Now that you know the pros and cons of both, it is time to decide which option is more appropriate for your business. Do you have a large chunk of cash available to buy the aircraft? Or, do you have any plan for the plane if you don’t need it anymore?
Observe your situation and consider the benefits of each option. It will help you determine if you want to buy or look for aircraft financing to lease the plane.
