As private jet sales keep increasing, it’s clear that more and more travelers are interested in the security, safety, and convenience that private aircraft can provide. The question is: should you buy or lease? To help you reach an informed decision, we’ve outlined the advantages and disadvantages of both options, as well as which one works best in different situations.
Buying a Private Jet
Of about 70% of American jet travelers, only a small percentage actually own their jets. Those that do, however, tend to have two things in common: they prioritize saving travel time and they can afford spending $3 to $90 million on purchasing a private jet. These groups include celebrities, major executives, avid travelers, and well-off families.
If you’re interested in buying a private jet, the first factor you should look at is size. The smallest jet models can carry four passengers and have a range of 2,000-3,000 flying miles without refueling. The largest jets can carry up to 12 passengers with a range of 4,000 miles. After the initial capital outlay, you’ll also pay $500,000 to $4 million on yearly maintenance costs.
To determine whether this is worth it for your needs, it’s important to look at utilization levels. In general, traveling less than 400 hours each year likely means you should lease a jet rather than buy it outright. If you’re over that range, though, there’s a gamut of specialist aviation equipment lenders and financiers that offer flexible financing arrangements.
Buying a private jet also provides the financial and fiscal benefits of asset ownership. This includes being able to take a deduction for the aircraft’s depreciation, which is one of the biggest expenses of owning a plane.
Leasing a Private Jet
If your flying needs justify private jet use but a full investment doesn’t make financial sense, your best bet would be to lease an aircraft instead. Leasing offers many of the benefits of owning, but there’s no long-term financial commitment. This option tends to be readily available, as many private jet owners rent their aircraft when they’re not using it.
The two main types of private jet leasing are wet leasing and dry leasing. Wet leasing includes the pilots, insurance, and maintenance, whereas dry leasing doesn’t. As a result, wet leasing usually occurs over shorter timeframes. Both options are far less expensive than purchasing, and you have the luxury of choosing to walk away at the end of the lease or renew it.
A short-term lease can also be a good way to test-drive private plane access before committing to buying one. Some aviation companies offer try-before-you-buy schemes that include getting full access to a private jet on a short-term basis to get a better feel for it.
