Taxi driving can be a relatively satisfying and lucrative side business for young professionals, and within this currently male dominated trade there is viable business potential by including female drivers. When given the choice, there is indeed a market of women who prefer taxi companies with female drivers, hence companies such as Uber aim to create million new driver jobs for women in 2020.
The benefits of working for yourself, setting your own schedule and being your own boss are well known. The satisfaction of building something on your own and keeping all the profits makes taxi driving an attractive option for women looking to make some extra cash, or for go getters excited to build their own taxi business empire. The biggest obstacle to getting started however is purchasing the car and most people can’t afford to buy one outright. Therefore, getting your taxi on finance is a much more realistic and affordable option. But how does the process work and is getting a taxi on finance any different to getting a car on finance? Read on to find out more.
What is car finance?
When you get a car on finance, it basically means you pay for it in monthly instalments rather than all at once. You might have to put down a deposit though but there are companies that offer zero deposit car finance too. You’ll pay interest on the monthly payments but, generally, that’s more attractive than dropping a lump sum all in one go. The interest depends on the deposit and the total length of the finance agreement.
Is taxi finance different?
Taxi finance is much the same as normal car finance but there are key differences. For a start, there are less lenders who are willing to offer taxi finance. The main reason for this is the fact that taxis are used for commercial purposes so there are extra terms and conditions involved in the finance agreement. You will also find this source interesting to read as it shares more facts about effective financial management.
One of the things that puts lenders off is that a car used as a taxi will be driven way more frequently and therefore pile up many times more miles than a normal car. As stated in his comment is here, this means the car will require more maintenance, is more likely to break down, and it will depreciate in value quicker – its resale value will be lower than another car of equivalent age.
Having said that, there are still plenty of finance companies and lenders who offer the service. As long as your credit score is good enough and you can afford the finance agreement, then it shouldn’t be too hard to find a reliable car to use as a taxi. Moreover, a Comprehensive and Tailored Insurance Solution for Taxi Businesses can be a game-changer in ensuring the longevity and success of your venture. They offer policies that are crafted with a deep understanding of the industry, providing coverage that is both robust and flexible. This way, you can operate your business with peace of mind, knowing that you are well-protected against any eventualities.
What about Uber?
From a finance point of view, there is no difference between taxi finance and finance for Uber drivers. But it is worth mentioning that Uber offers its own finance agreements to drivers. That doesn’t mean it will be the best deal though. Make sure you shop around, there are plenty of companies that offer better deals for taxi drivers than Uber does.
What kind of taxi could I get?
Some finance companies work with specific dealerships, but many let you get a car from anywhere in the UK. That means that once you’ve been approved, you can get any car you want for your taxi, as long as it fits with your budget.
Some of the best cars are available to you, used and new, including the Ford Mondeo and the Skoda Octavia, two incredibly popular and reliable taxis.
Who can get taxi finance?
Eligibility for taxi finance is the same as that of car finance. You need to fulfil the items on the list below. Getting a taxi licence and anything else required to actually run your taxi business is unrelated to the finance process and you’ll have to sort those out yourself.
- Have you lived in the UK for at least three years?
- Do you hold a full UK driving licence?
- Are you 18 or older?
- Are you free from bankruptcy?
- Can you prove affordability?
If you can answer ‘yes’ to all of the questions above, then you are eligible for taxi finance. Just because you are eligible, it doesn’t mean that you’ll get approved.
How do I get approved for taxi finance?
Generally, the entire application and approval process is quick and stress free. After filling in a quick online form, your details will be placed in front of a panel of lenders who will then decide whether or not to give you a deal. If you get declined, the most likely reason is that you have a bad credit score. This is down to your financial history and indicates to lenders that you are unreliable in terms of paying back debt. If that does happen to you, there are things you can do to improve your credit score and then you can always reapply. The simplest is to pay all existing bills on time and in full. Getting credit card and paying it back consistently is another method, as is registering to vote.
If you do get approved for taxi finance, an expert will phone you to inform you of the good news. They’ll explain the rest of the process and guide you towards a lender that best matches your financial situation and personal needs. Deals can vary significantly – deposit amount, monthly repayments and interest are all factors that will be tailored to you. The final stage is, of course, to choose your taxi. And you really are spoilt for choice. Don’t let a poor credit score stand in the way of starting your own taxi business.
