Just as with any other type of business, starting out as a taxi driver or expanding a fleet of taxis requires capital. Getting the right car, one that looks good, is comfortable and is reliable and getting it at the right price is all important when it comes to securing a good return on your investment. Here we look at some of the ways taxi owners and fleet operators can accomplish just that.
A One Stop Solution
A sure-fire way for taxi owners or fleet operators to get the vehicle they need is to use the services of a company who are specialists in providing taxis and finance for the industry. Here you will be dealing with people who know the taxi industry and this can make a big difference saving you both time and money.
They will be able to advise you on choosing the most appropriate vehicle for the type of work you do and also offer competitive rates on finance, should you require it. If you run a fleet of taxis, then it may also be the case that you can build a relationship with the company and this could pay dividends further down the line.
Another option, although not a traditional form of finance, is to look to lease a vehicle. Leasing cars, whether it be for private or for business use, has grown in popularity over recent years and there are now some great deals to be found.
Leasing has become popular, because you get a new car, but without all the related hassle. Plus, when the contract has expired, you simply return the car to the company and, should you wish, get another new car to take its place.
There are two common ways of leasing to help finance your Taxi fleet. The first is Personal Contract hire (PCH) and Personal Contract Purchase (PCP) PCH allows you to get a new car every few years, included low monthly payments and there is no worries about the car’s resale value afterwards. The lease agreement typically lasts between 2-5 years and you usually have to pay a certain amount upfront. PCP differs in that it gives you the option of buying the car in the future. For a big taxi fleet where the cars are used several times daily, clocking up miles and miles with each use, PCH would be the preferred option as the cars will likely need to be replaced after some time. An independent taxi driver may want to eventually own his own car.
Hire Purchase (HP)
This is a way to finance a new or used car. This is where the loan is secured against the car and is arranged by the car dealer. Usually you will have to pay a deposit of about 10% and pay fixed monthly payments over a certain period of time. Usually over a period of 12- 60 months. This will mean that you don’t actually own the car till the very last payment. The benefits of this are that Hire purchase is quick and easy to arrange, flexible repayment terms and offers competitive fixed interest rates. You may also be able once half is paid, able to return the vehicle and not have to make any more payments. Be sure to check this first.
Use a credit card to buy a car
Using a credit card to pay all or part of your car will give you the extra protection if something bad were to occur. You will need to pay at least £100 and meet your monthly card payments. This can be high risk as some dealers will not accept credit cards at all or, will charge a card handling fee on top of this.
A more traditional route to follow is to explore the options offered by banks. If you have a good relationship with your bank, then this may mean being able to get a very competitive interest rate on getting money with which to buy a vehicle.
If and when this is approved is approved, you do, of course, still have to go out and find a suitable vehicle and so perhaps in terms of the time and energy incurred this option is the least effective and time consuming.
There are many options out there regarding taxi finance for owners or fleet operators and so finding the right one for you just takes a little research, after which you can pick up your first fare.