There are an estimated 285,400 licenced taxis and private hire vehicles on the country’s roads and government figures show the number is on the up. If you are thinking of joining their ranks one of the first decisions you’ll need to make is whether to buy a new or a used vehicle.
What are the benefits of buying a new taxi?
Finance Options More than two million new vehicles are registered in the UK every year and 80% are bought on credit. Buying a new taxi on credit can be tempting, but it’s important to understand that finance deals are likely to cost you more in the long run. Short-term affordability is a big plus and fierce competition between financial providers means it’s possible to get a new vehicle without a deposit and spread monthly payments over five years. However, it’s essential to explore all your options and carefully crunch the numbers before taking on extra debt.
Vehicle Safety Standards have come a long way in a short time and today’s cars boast a range of advanced safety features (such as Autonomous Emergency Braking and Electronic Stability Control) which are great news for you and your passengers.
Running Costs Modern vehicles are much more fuel efficient and you’ll go a lot further on a full tank. Greener engines and lower CO2 emissions mean you’ll make savings on Vehicle Excise Duty (also known as ‘road tax’) and you’ll be doing your bit to help save the planet. The government is now also cutting road tax for electric taxis by £320 per year meaning they will pay £145 a year instead. When the pure-electric taxi is available, drivers won’t have to pay any tax.
Fewer Breakdowns More time spent on the road means more time spent picking-up fares. Not only are new vehicles much less likely to breakdown, but the manufacturer will cover the cost of repairs. Warranty terms vary between brands, but you can expect a minimum of three years or 60,000 miles (whichever comes first).
Perfect Spec Buying a new vehicle means you get to choose exactly the specification you want and it’s hard to beat that ‘new car smell’. You’ll also enjoy access to a wider range of hybrid and electric cars which is great news if you’re considering going green.
Longer Life How long a vehicle lasts depends on a variety of factors (including the car itself and how well it’s looked after), but research shows that the average car is kept on the road for just over 11 years while most drivers will keep a new vehicle for seven years before upgrading.
Competitive Cover It’s a popular misconception amongst motorists that newer vehicles automatically mean higher insurance premiums. Taxi premiums are calculated to reflect risk, and while more expensive vehicles are likely to increase premiums; improved safety and security features are likely to decrease premiums. It’s a balancing act and taxi drivers are sometimes surprised to find that it’s actually cheaper to insure a new vehicle.
What are the benefits of buying a second-hand taxi?
Price Point Price is often the biggest driving factor when deciding to buy a new or a used vehicle. Not only will your budget go much further in the second-hand market, but your car will also hold its value better. New vehicles are estimated to lose 20% of their value as soon as they are driven off the forecourt and 50% in depreciation over the first three years.
Long Haul Modern vehicles are built to last and if you choose a car carefully (low mileage and full service history) there’s no reason why it can’t clock-up 200,000 miles.
Wider Choice With over eight million used vehicles sold every year in the UK there are bound to be plenty of cars at your price point. It’s worth noting that over half of all second-hand vehicles are sold through dealers which can help overcome any trust issues.Fault Finding New vehicles rely heavily on technology and problems can be difficult to identify and repair on the roadside. Conversely older vehicles may be more likely to breakdown, but mechanical problems are often easier to fix.
Waiting Time Buyers are sometimes surprised how long it takes for a factory to build and deliver a new vehicle (think months rather than weeks) whereas most second-hand cars can be driven away.
Customer Care While you may be justifiably proud and protective of your taxi your passengers may not share the sentiment and the inside of your cab can soon start showing signs of wear and tear.
No matter whether you decide to buy a new or used vehicle, it’s essential to get the right taxi insurance. ChoiceQuote is an independent broker with years of experience and we’ve got access to some great deals.