Your driving school vehicle(s) literally drive your business, so making the right choice about make / model, whether to lease etc. can be vital.
The most vital piece of equipment to any instructor is their car. It is of central importance, not just as an essential instructional tool but also as an important source of advertising through livery / roof boxes / door panels. As such, you will need to ensure you make the right choice as to how to supply yourself, and, as you grow, your franchised instructors, with driving school vehicles. There are a variety of options available to you, and there are certainly pros and cons to each choice. The best value can be had by buying a vehicle outright, however this is rarely an option for instructors, and especially smaller schools, due to the large up-front expense, so we will focus on the two monthly-payment options, either buying on a finance plan or leasing.
When purchasing, you do benefit by owning the vehicle at the end of any finance period, but it may well be of little value by this point. It should, however, be worth at least some form of deposit on the next car. The purchase option also does allow you to claim back taxation equal to the interest on any payments and the depreciation value as set by the Inland Revenue, however as you retain ownership at the end of the finance period your principle payments against the capital are not claimable. In order to best recoup the finance of purchase it is recommended to finance over 3-5 years, a normal purchase period most car manufacturers will offer.
When leasing a driving school vehicle, you give the car back at the end of the lease period, under normal circumstances trading it in for a new model and starting a new lease. As such, leasing (compared to either outright or financed purchase) means you benefit from having a consistently modern car. While it is unlikely you will lose many pupils not having the latest model, having a more attractive, comfortable car certainly won’t discourage them. Don’t forget about yourself either as you’ll be spending a large portion of your professional life in-car, so there is clear benefit in keeping it up to date for your own comfort. Lease payments are also 100% tax deductible; as the lease is seen entirely as an expense this can be wholly written off against tax, which on top of making your accounts far simpler can also mean you end up better off than through financed purchase.
While many car manufacturers and dealers are running maintenance inclusive options, do study the terms in details. For example, the ever-popular BMW MINI will not have its clutch covered as a driving school vehicle and there have been many examples of this failing after less than 30,000 miles. Others may limit the mileage, which can prove exceptionally expensive if you are to breech the service terms. In order to assure our associates a fair deal from a reputable company, we have partnered with CA Cars in order to offer short term hire, long term lease and financed purchase of a wide range of dual controlled vehicles.
Then there is the decision on what to offer your franchisees. Many of the big schools offer cars as part of the package, but almost all lease though major companies. Leasing offers a fixed cost and a replacement if things go wrong, although this is unlikely with such a new car. Smaller franchises often offer deals to their franchisees and arrange for the lease company to supply the car direct to the franchisee rather than the school including it in the franchise. This has distinct advantages to both you and your instructors when working on a small scale.
Keeping the car separate from the franchise means that you don’t have to accept the responsibility of your franchisees’ vehicles. If anything goes wrong, with the car, or with payments, it is between the lease company and your franchisee. This has advantages for the franchisee as well. They are free to take the car with them should they leave, and they are free to choose whatever options for the car that they wish to. Many instructors have family commitments that they may want their instruction vehicle to also accommodate. This way, the car is the instructor’s and they are free to use and enjoy it as they wish; for holidays, private use and professionally.