Choosing a Car as a Driving Instructor – The Foolproof Guide

This subject is something of an FAQ on social media and the forums. Choosing a car when you’re not a driving instructor can be hard enough, but finding the right cars as a driving instructor is even harder. Everyone will have their particular favourite driving school car and there are a lot of choices and options – as well as the added financial aspects when a car is used as a tuition vehicle.

 

DISCLAIMER: First of all, it’s important to declare that I am not an accountant. There are many financial benefits and drawbacks with different types of cars, so I strongly advise you to speak to an accountant before any purchase. What works for some, will not work for others. The forums are full of well-meaning people (and a few bad ones too), but your accountant will have ALL your details and the current criteria to hand. I will make loose reference to some financial stuff but this might be out of date and I can only be vague. They are based on some 20 years-experience in the industry and dealing with many driving instructors over those years.

Personal choice of driving school vehicle

A lot of the choice must come down to what you prefer. What car is it that you will be happy sitting in and driving? You will be in it many hours a day and it will probably be your personal vehicle too. What other function apart from driving school tuition must if perform?

• The school run?
• Family holidays?
• Will anybody else need access to this car?

A note worth mentioning is that over recent years, driving school vehicle insurance has risen quite dramatically. Many years ago when I knew someone involved in underwriting motor vehicle policies, I asked why driving school insurance was so cheap. It was explained to me that the greatest risk to any vehicle was theft – and who wants to steal a fully sign-written car? Also, when it was being used, albeit by young drivers, they were supervised, and the risk was minimal. Today, we see many instructors not using livery and it’s becoming common practice to put their own teenage children on the policy so they can borrow the car in the evenings. Suddenly we have rising insurance costs.

For many years, the AA used the Ford Focus as their sole tuition vehicle. I was with the AA during that time and I would hear in the forums how other instructors would claim that the car is ‘too big.’ I never had a problem with a student and the car – occasionally one might say something about it on the first lesson, but then they said the same thing when I had a Fiesta. We take around 60-100 calls a day for driving lessons and maybe once a month someone asks, “what car will it be?”

SIZE DOES NOT matter too much, although I am sure there is a limit.

We’re all different when it comes to personal choice. One man’s medicine is another man’s poison. Colour, make and size all play a huge factor in the decision process, but I would start by looking at vehicles you personally like.

You may see a bargain of a learner car on a forecourt somewhere, but that bargain could be short lived if you hate the car after a few weeks. Many years ago, I kept seeing an advert for the Daewoo Matiz. I went into the showroom a few times to look at this little car. The salesperson was telling me how the price included all the servicing, breakdowns and insurance for a driving school for 3 years. In the showroom, this car looked perfect. A 3-cylinder engine that would return a zillion miles to the gallon (I may have made that up). The figures certainly did work out very well.

I decided to take them up on their offer of loaning the demonstrator for the weekend to see how ‘fantastic’ this little car was. So, on the Friday evening I turned up. I parked my little Fiesta in their car par and was shown to my chariot for the weekend. First, they had to clean the car out as it was full of cigarette ash, apparently being used by one of the salespersons, but never mind. I was told it had a full tank of petrol and to bring it back Monday morning empty if I wanted and to go out and enjoy the car.

Off I went, but immediately I found myself struggling to get this little car moving. The noise from the 3-cylinder engine was horrible and I found myself having to really push the engine to get it moving. The seats were like grandma’s old armchair with lots of padding that did nothing to counter the roll into the corners this car produced. I could not get the headrest to an acceptable or safe position and the pedals were so off-set my knees hurt. The Daewoo went straight back that Friday evening.

I just could not tell the salesperson how uncomfortable or how horrible I found this car. All he kept saying was “But everything is included!” Yes, that was true, including the noise and backache. Make sure you do a decent test drive of any driving school vehicle; you’re going to spend a lot of time with it.

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Paying for a driving school vehicle…

So, having chosen a prospective car, you’re going to have to pay for it. These are some of the options;

• You can purchase your vehicle outright
• Purchase on finance
  • Hire Purchase
  • Lease purchase
  • Dealer special agreements
• Lease

How you purchase really should be done with the advice of an accountant. All is not equal and while initially something might look cheaper, long term it might work out expensive.

I want to start off with a recent story to consider before I look at the options.

An instructor took out a lease vehicle on a lower mileage contract (more later on this) and he soon found his mileage going up and up. Looking at his contract, he realised he would soon be over mileage and that the excess mileage rate was very expensive.

He saw a nice car he liked the look of that he could afford to buy outright and showed it off on the Facebook forums commenting on how great this model was. I think it was some up-rated model as references were made to its speed and performance. He settled his lease car early and returned it to the midlands (I am not sure what the costs of this would have been.)

Excited by his new purchase, he took delivery of his new car. A few weeks later, we learn that the new car is now in the garage having an engine rebuild that is going to take 3 weeks. Neither the garage or the insurance company were prepared to offer him a dual-controlled vehicle while it was being fixed, meaning he had to stop driving lessons for the 3 weeks. Now, I reckon the lost income was in excess of £3000 plus the lease settlement and other costs. I am sure will make this a very expensive deal.

If you’re now looking at the screen in panic, don’t worry. There are ways to protect yourself from this.

• If you purchase any car, make sure that the garage or dealer knows its for use as a driving school vehicle
• Make sure it’s in writing on the invoice and documents and ask them whether your warranty covers you as a driving instructor if it goes wrong
• GET IT IN WRITING. This is so important. A dealer or garage should be more than happy with this if you ask.

Purchasing a vehicle

As most people know, a brand-new car loses a lot of it’s value as you drive it off the forecourt, so consider one of the many ex-demonstrator or delivery mileage deals around. Many garages know the important fact that pupils might buy a similar car to their instructor so are happy to do deals with driving instructors.

Many deals will include the dual-controls and metallic paint although non-metallic is easier to repair those small scratches. If it has alloy wheels, see if they will fit ‘alloygators.’ These are useful guards that protect the alloy rims of the wheels that might (sorry WILL) get scuffed on the curbs occasionally. From memory, Renault and Citroen are often particularly keen to offer driving school packages.

Even if you can afford pay for your vehicle outright then it’s still worth speaking to an accountant as I know there are sometimes reasons why cash is best not used. If you’re financing, remember you will probably want to change the car in a couple of years, so look at the many deals that finance just those few years. There are deals where you get the option of paying a large sum of money at the end to keep the car or just hand it back and do another deal.

A few of my instructors have purchased new and ex driving school cars through CA Cars and reported massive savings. If you’re one of my instructors and interested in this, let me make the introduction as they will give you some extras.

Purchasing & the taxman

There are 2 ways of dealing with this.

1. You claim back a depreciation allowance as set by the inland revenue as to what they think the car is worth and you claim for fuel and other expenses.

OR

2. You claim a mileage allowance of 45p for the first 10,000 miles and 25p a mile thereafter. Out of this money you pay for all the associated costs including fuel and purchase payments

An accountant can advise on whether the vehicle will be classed as a company vehicle and hence you could be liable for company car tax (that’s very expensive.) I have always gone down the mileage allowance route, as that ensures the car is mine and not a company vehicle, therefore not subject to company car and fuel tax.

Leasing a vehicle

There are quite a few companies out there who specialise in driving school car leasing. 2 of the companies I use are CA Cars and Hitachi Capital (again, if you are one of my instructors then let me get your quote as they will give you extras in the price). It’s important to note that there are others out there and it’s wise to shop around.

Leasing will usually cover everything. The dual controls, servicing and insurance can be included too. I advise getting a separate quote for insurance first as it’s normally cheaper and you are earning the no-claims-bonus for yourself too. They normally have their own replacement car service if yours is off the road for any reason.

After the agreed duration, the car will be simply exchanged and you can easily have a new car every 18 months to 3 years. For me, this route gives such a peace of mind. It looks expensive at first, but with everything included I think it often balances out. There’s a big reason why most companies lease their vehicles and if you were with a franchise that provides a car, it will certainly be leased.

Leasing & the taxman

Again, the two methods here are

1. Claiming back 100% of the leasing costs plus fuel and anything else

OR

2. You claim a mileage allowance of 45p for the first 10,000 miles and 25p a mile thereafter. Out of this money you pay for all the associated costs including fuel and purchase payments

This can have an effect on the actual cost of the vehicle over purchasing and you need to look at the whole picture.

Check the mileage terms in any contract

As with buying or leasing, beware of the mileage trap. Some companies who finance or lease offer a low price, but restrict the mileage. I covered 30,000 miles every year as an instructor in Devon and Cornwall. You might do a lot less in London, but make sure you have an idea of the miles you will do and give yourself a safety margin. Additional mileage costs are expensive – very expensive, so get the right mileage.

Trainee driving instructors.

At least for the short term, it’s possible that your existing vehicle might be suitable. This can be a great way of keeping the initial costs down. If you don’t have a suitable vehicle, I can source short term leasing deals too and this can be a great way of keeping costs low in the initial start-up.

So, which car, Dave?

There is no doubt that your choice of driving school car is a difficult one. I normally advise new instructors to lease at first from one of the aforementioned places and see how they get on. The initial costs are only part of the deal and you need to look at what the whole package will be, including running costs over the period you intend to keep the vehicle.

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