Used business jet prices drop amid rising inventory

According to Vref, business jet inventory grew from 1,857 aircraft in the fourth quarter of 2022 to 2,719 a year later and reached 2,737 at the end of the first quarter of this year. However, performance varies depending on the model. Newer jets are maintaining stronger market positions with reduced demand for older jets.

Vref pointed out specific models such as the Cessna Citation M2, where about 6.5% of the fleet is for sale with an estimated selling time of six months and a 5% decline in values. Values for the Embraer Phenom 100 have decreased by 7% this quarter with 6% of the fleet for sale and an estimated selling time of five months. The Falcon 2000EX EASy has an estimated selling time of 2.5 years; its values have dropped by 8% this quarter with 6% of its fleet on sale.

Gulfstream’s G550 has an estimated selling time of six months with 6% of its fleet for sale and a value decline of 4%, while Honda Aircraft’s HondaJet has an estimated selling time of 1.5 years with a value decrease of 5% and an unusually high market presence at 18%.

Contributing to this slowdown are higher interest rates exceeding 8%, which deter new loans. “As a result, the market is experiencing stagnation, with many transactions delayed until interest rates potentially drop in the latter part of the year,” Vref reported.

The firm also highlighted that upcoming presidential elections add uncertainty to the market as election years tend to create volatility.

However, sliding values present opportunities for buyers who can negotiate better terms. “This environment is ripe for those who can leverage alternative financing and creative deal structures,” Zilberbrand added.

In addition to its market outlook, Vref announced it will soon launch a new version of its software designed to provide intuitive data that saves time and offers more comprehensive insights.

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