1. Maximise your deposit

By maximising the amount of money you contribute towards the price of your new taxi you will keep the amount of debt that you incur to a minimum, this will ensure that your monthly repayments are as small as possible which means that you will have more money left over each month to meet other obligations.

2. Minimise your Debt

When negotiating your loan make sure that you do not allow the amount you borrow to get any bigger than is necessary, otherwise your repayment will be higher than is necessary. You can achieve this by;

• Checking that all of your finance charges are fair and legitimate,
• Ensuring that the dealer has not added any unnecessary or excessive charges to your invoices,
• Ensuring that you are purchasing the most cost effective vehicle for your route
• Understanding all the commitments you are undertaking by entering into your contract with the financier, if anything is not clear question the financier until you are clear about what you are committing to.

3. Don’t be Fooled by Interest Rates

Many people are fooled by finance companies that advertise what appear to be low interest rates, however these companies charge a number of addition fees and compulsory insurance premiums that increase your monthly repayment considerably.

It is important therefore to compare the actual repayments from the various financiers to ensure that you are getting the best deal, however in doing this you must ensure that the loans are being paid over the same period.

If they are not over the same period check how much you will pay in finance charges over the loan term, as you may well find that although the repayment is smaller, because you are paying for longer the finance costs are higher.

Thus try to pay the loan off as fast as possible while making sure your repayment is as low as possible to best manage your cash.

4. Only Buy Add-on Parts That Add Value to Your Business

When purchasing your vehicle many motor vehicle dealerships will put you under a lot of pressure to purchase additional, non-standard item for your vehicle, such as window tinting, bull bars, tow hitches etc.

You must not be tempted to add anything that does not make your vehicle more efficient in terms of your taxi business. For example, only fit a tow hitch if you have a trailer and are likely to be doing regular long distance trips with passengers that have a lot of luggage.

These add on items all contribute to the price of the vehicle and thus will increase the size of your loan and thus your repayments which impact negatively on your cash flow.

Please remember, you are in no way obliged to fit any of these extras to your vehicle and do not allow the dealer to force any items that you do not feel are necessary onto you.

5. Use Your Scrapping Allowance

It is vital that if you intend remaining in the taxi industry that you scrap your old taxis to benefit from the Government’s taxi scrapping allowance. This money will significantly increase your deposit and thus reduce the repayments that you have to make.