The world is on lockdown due to COVID-19 and the private aviation industry is just beginning to weather the hardship. For those thinking about becoming a private jet owner, now might seem like the time to take a defensive stance. But it’s actually quite the opposite. Now’s the time to think about buying and becoming a jet owner. It seems counterintuitive, but the prevailing factors governing the industry right now show strong signs of a buyer’s market.
Take a look at five of the best reasons to move on your purchase of a private jet right now, instead of waiting for the dust to settle on COVID-19:
- There’s ample supply of used jets. Trump-era tax cuts have lowered the cost of acquisition and ownership for private jets, which has enabled companies and high-net-worth individuals to make the upgrades they’ve been putting off. In doing so, the secondhand jet market has taken off! Right now, there’s an ample supply of used jets out there in great condition, available for affordable prices.
- Cost of acquisition is low right now. Buying a new or used jet has never been easier thanks to the Trump-era tax incentives for jet ownership. Buyers can deduct the full value of a new or used aircraft on their taxes (2017-2027) via bonus depreciation. This lightens the fiscal blow of making a purchase and actually makes buying a private jet a smart move for those looking to increase their tax-advantaged position.
- Diverse jet selection on the market. The strong economy of 2019, coupled with bonus depreciation tax cuts, has flooded the used jet market with late model options. Likewise, the last decade has seen the introduction of some truly game-changing jets that are sure to define the market for a decade more to come. There’s never been a better time to take your pick of aircraft — from the massive Bombardier Global 7500 to the lightweight Cessna Citation Longitude.
- More sellers as people take defensive positions. There’s an old adage by investor Warren Buffet that goes, “be greedy when others are fearful; be fearful when others are greedy.” As panic about COVID-19 sweeps the globe, many people are acting irrationally. This means there are great deals to be had on buying a private jet! Brokers are seeing jet owners downsize in a hurry because that’s their first instinct — and they’re unloading high-quality planes for lower prices. For buyers, it means getting the jet you’ve always wanted, at a price you’re more than willing to pay.
- ADS-B upgrade challenges. Despite having more than a year to become ADS-B compliant, jet owners across the private sector still haven’t made the leap. The last projected figures showed more than 1,660 business jets (23%) and 3,800 turboprops (49%) would lack compliance heading into 2020. Speculation is that these jets would likely come up for sale as owners pass the buck on paying for an ADS-B upgrade. For those looking to get a light jet or turboprop at a discount, ADS-B noncompliance might be your opening.
With more and more reasons to buy a private jet compounding, the market is set for a flurry of buying and selling activity in mid-to-late 2020. Regardless of how the COVID-19 pandemic plays out or what economic stressors persist, now is a great time to jump in on a private jet.