Buying a taxi in the UK involves 5 essential steps: obtaining proper licensing, choosing between new or used vehicles, securing specialist finance, ensuring regulatory compliance, and selecting the right vehicle type for your business needs. Costs typically range from £5,000 to £65,000 depending on vehicle choice, with specialist finance options available even for those with poor credit history. At Carvine, we specialise in finding LEVC finance deals that can often be arranged without a deposit, helping drivers overcome the financial barriers to taxi ownership whilst ensuring vehicles meet all UK licensing requirements including wheelchair accessibility, ULEZ compliance, and insurance standards.
Secure Your Future. Start Driving.
Ready to apply? Get tailored Taxi or LEVC finance today, regardless of your credit history.
5 Essential Steps to Buying a Taxi in the UK
Purchasing a taxi in the UK requires careful planning and attention to detail. Follow these five key steps to ensure a smooth and successful transition into the taxi business.
Obtain Proper Licensing
- • Before operating, you must secure the correct licences for both yourself and your vehicle.
- • Driver Licence: Apply through your local council, which typically includes background checks, a medical assessment, and sometimes a local knowledge test.
- • Vehicle Licence: Your taxi will need one, requiring inspections to meet safety and accessibility standards.
- • Why it matters: Adhering to proper licensing ensures you are legally authorised to carry passengers and protects your livelihood from regulatory penalties.
Decide Between New or Used Vehicles
Choosing between a brand-new taxi and a pre-owned vehicle is a critical decision influenced by your budget, projected operating costs, and expectations for reliability.
New Taxis
- Pros: Full manufacturer warranties, latest safety features, and improved fuel efficiency.
- Cons: Higher upfront costs and immediate depreciation.
Used Taxis
- Pros: Significant savings and lower insurance premiums.
- Cons: Essential to check service history to avoid costly repairs.
Secure Specialist Taxi Finance
Taxis are a specialised commercial investment. Financing options differ from standard vehicle loans.
- Many UK lenders offer tailored taxi finance, including hire purchase, leasing, and solutions for applicants with limited financial history (e.g., bad-credit solutions).
- Carvine Specialises in Finance: We can help spread the cost with manageable monthly payments, protecting your cash flow as you launch your business.
- Always shop around for competitive rates and review terms carefully.
Ensure Regulatory Compliance
Every taxi must meet strict UK regulations. Staying compliant is vital for long-term viability.
- Key Regulations: Vehicle age limits, emission standards (like London’s ULEZ), and accessibility requirements (such as wheelchair access in some areas).
- Action: Ensure your chosen taxi complies with all local by-laws, vehicle standards, and DVLA registration.
- Warning: Failure to comply may result in fines or a revoked licence.
Select the Right Vehicle Type for Your Business
The final step is choosing the model that aligns with your business goals and the needs of your passengers.
- Operational Area: Urban environments may favour electric/hybrid cars for fuel savings, while rural routes may require robust, larger-capacity vehicles.
- Key Features to Assess: Accessibility, passenger comfort, technology, boot space, and long-term maintenance costs.
- Matching the right taxi type improves passenger satisfaction and helps you stand out in a competitive market.
Following these five essential steps helps aspiring taxi owners in the UK establish a compliant, efficient, and customer-friendly taxi service, positioning your business for long-term success. Ready to get started?
Secure Your Future. Start Driving.
Ready to apply? Get tailored Taxi or LEVC finance today, regardless of your credit history.
What Is a Taxi and What Types Are Available to Buy?
Hackney Carriages (Black Cabs)
- Definition: The traditional taxi model, also known as black cabs.
- Operation: Can be hailed on the street, hired from taxi ranks, or pre-booked.
- Vehicle Requirements: Often required to be purpose-built or approved wheelchair-accessible models by licensing authorities.
- Examples: LEVC TX, Ford Galaxy, and Ford Tourneo.
Private Hire Vehicles (PHVs)
- Definition: Requires pre-booking through operators and cannot be flagged down or picked up from ranks.
- Vehicle Choice: Offers greater flexibility in vehicle choice.
- Popular Models: Toyota Prius, Skoda Octavia, Citroen Berlingo, and Hyundai i30.
- Age Limits: Requirements vary by local council, but typically mandate vehicles be under 10 years old in London and manufactured from 2006 onwards elsewhere in the UK.
How Much Does It Cost to Buy a Taxi in the UK?
Vehicle Costs
Initial Setup & Operational Costs (Beyond Purchase)
What Finance Options Are Available When Buying a Taxi?
At Carvine, we specialise in securing finance for all sorts of vehicles including taxis – see our page for Taxi finance, and LEVC taxis – see our LEVC taxi finance page. We often arrange deals without requiring a deposit, even for applicants with adverse credit history including CCJs and defaults.
1. Hire Purchase (HP)
- Most Common Method: You pay fixed monthly instalments (typically 24 to 60 months).
- Ownership: You own the vehicle once all payments are complete.
- Mileage: Allows unlimited mileage, which is essential for taxi work.
- Repayments: Typically range from £400 to £1,200 monthly.
2. Personal Contract Purchase (PCP)
- Structure: Offers lower monthly payments than HP but includes a large final ‘balloon’ payment to secure ownership.
- Suitability: Better for drivers considering regular vehicle upgrades, but can include mileage restrictions unsuitable for full-time taxi work.
3. Leasing
- Structure: Provides an alternative to ownership; you pay fixed weekly/monthly fees covering vehicle costs, maintenance, and licensing.
- Average Cost: Rental costs average £350 weekly for electric LEVC taxis (approx. £1,400 monthly).
- Pros: Eliminates upfront costs and maintenance responsibilities.
- Cons: You build no asset value, making ownership more cost-effective long-term for full-time drivers.
We at Carvine understand that not all drivers have perfect credit scores. Our specialist panel of funders enables us to secure competitive finance deals for drivers who may be declined by mainstream lenders.
Get Approved for Taxi Finance
Ready to apply? Get tailored Taxi or LEVC finance today, regardless of your credit history.
Should You Buy a New or Used Taxi?
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