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Author Topic: Changing Lease Order to Purchase Order  (Read 848 times)

unsaid

  • Former member
Changing Lease Order to Purchase Order
« on: March 09, 2011, 08:55:00 PM »
I am confused, I want to change a 7 year lease order to a purchase order for some A300-600Rs.
Please see the attachment.
Now, am I paying anything extra for this? A penalty?


[attachment expired]

Ilyushin

  • Former member
Re: Changing Lease Order to Purchase Order
« Reply #1 on: March 09, 2011, 09:19:16 PM »
I am confused, I want to change a 7 year lease order to a purchase order for some A300-600Rs.
Please see the attachment.
Now, am I paying anything extra for this? A penalty?


You must pay the price for the plane, you are purchasing it after all... ;D

unsaid

  • Former member
Re: Changing Lease Order to Purchase Order
« Reply #2 on: March 09, 2011, 09:24:11 PM »
You must pay the price for the plane, you are purchasing it after all... ;D

Well, I will of course pay for the plane, what I am asking is if I am paying any extra penalty for buying instead of leasing it?

slither360

  • Former member
Re: Changing Lease Order to Purchase Order
« Reply #3 on: March 09, 2011, 09:27:15 PM »
Of course.

There is a change penalty

Offline Sami

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  • Posts: 16479
    • AirwaySim - Are you the next Richard Branson?
Re: Changing Lease Order to Purchase Order
« Reply #4 on: March 09, 2011, 11:07:10 PM »
What are you seeing as the "penalty" here?

When changing the order, you convert from a lease deal to purchase deal and the terms are then recalculated. And in this case you of course have to pay the purchase prepayment and then at delivery rest of the sum

unsaid

  • Former member
Re: Changing Lease Order to Purchase Order
« Reply #5 on: March 10, 2011, 09:02:06 AM »
What are you seeing as the "penalty" here?

When changing the order, you convert from a lease deal to purchase deal and the terms are then recalculated. And in this case you of course have to pay the purchase prepayment and then at delivery rest of the sum

Let's say the plane originally costs 100mil, and I payed 5 months of lease upfront as like 6 mil. If I change it to purchase order, normally I would pay 40% of plane's cost, which will be 40 mil. If I am required to pay only 34 mil as difference, then this is fine.
I was wondering if there was any penalty being payed to the leasing company. You know, if I buy a plane which I have already leased, if I wanted to buy it, I would have to pay for the remaining lease time plus the cost of the plane.

Offline Sami

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  • Posts: 16479
    • AirwaySim - Are you the next Richard Branson?
Re: Changing Lease Order to Purchase Order
« Reply #6 on: March 10, 2011, 09:07:36 AM »
I cannot remember directly, but I there is always some fee to change the order. But in this case I think it was smaller than in the case where lease has already started and you buy it out.

unsaid

  • Former member
Re: Changing Lease Order to Purchase Order
« Reply #7 on: March 10, 2011, 09:19:33 AM »
I cannot remember directly, but I there is always some fee to change the order. But in this case I think it was smaller than in the case where lease has already started and you buy it out.
yes, that's what I am trying to find out, if it is really negligible, fine, but I dont wanna pay 10mil extra for a plane.

Sanabas

  • Former member
Re: Changing Lease Order to Purchase Order
« Reply #8 on: March 10, 2011, 09:49:17 AM »
yes, that's what I am trying to find out, if it is really negligible, fine, but I dont wanna pay 10mil extra for a plane.

Get your calculator out. :)

66941890 is 60% of 111569820 (to nearest $10) so that's the purchase price.

40% of that is 44627930.

You didn't put it on your screenie, so check to see what your lease price was. I *think* 1 month = roughly 1/80 aircraft price, so initial lease = 1/16 aircraft price, which would be 6.98 million.

6.98 + 37.58 = 44.56 million, so you appear to be being charged about $68,000 to change the order, i.e. virtually nil.

unsaid

  • Former member
Re: Changing Lease Order to Purchase Order
« Reply #9 on: March 10, 2011, 06:49:39 PM »
thanks, now this is explanatory.

 

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