If you want to become, or already are, a PCO driver you should consider if you want to rent or buy a car for your job. It’s difficult to make a decision right away, so make sure you look at pros and cons for both options. Or maybe you choose a middle way – renting with the option to own the car at the end of the contract, via a ‘rent to buy’ plan. You might have heard of Rent to buy plans for homes and apartments, but you can also find car companies that offer them.
A PCO Licence is a Private Hire Driver Licence which you need if you want to work as a taxi driver, chauffeur or Uber driver. A PCO licence is valid for 3 years and is issued by the PCO (Public Carriage Office) in your area.
How does this work? Well, you sign up an agreement and pay for the car like you would when you’re renting one. However, instead of giving the car back at the end of the term and losing the money, a part or all of the money goes toward purchasing the car.
A key benefit to a rent to buy arrangement is that you are not committed to a long lease or large capital investment You can try starting or expanding your PCO business with little initial outlay and therefore your financial exposure will be limited. If the business goes well great, if it doesn’t work for you simply return the car.
Car lease the terms can be very restrictive and lenders usually ask for a pretty in-depth credit check to make sure you can afford the loan. However, for a Rent to buy contract the credit score usually doesn’t matter because you’re not applying for a car loan.
There’s something for everybody when it comes to buying a car, and the requirements vary from one company to another. For example, Splend is a PCO car hire company that doesn’t require you to have a good credit score. Why? Because you will pay for the car one week in advance. If you’re not able to pay, you will be asked to return the car just like you would when renting.
Car lease vs Rent to buy
Your needs are the main factors in determining if you want to own a car, or not. The advantages of car leasing are many, starting with the fact that you don’t own the car and therefore have no responsibility for its depreciation. It’s no secret that a car loses its value over time and should you decide to resell it, you’ll probably lose money. With a car lease, however, you can hand back the car at the end of your contract and easily get a new one. This is also a great option if you’re passionate about the latest car models and new technology, as you can drive a new one every couple of years.
At the same time, this can be seen as a disadvantage too. There is a certain peace of mind that comes with owning a car, even if it’s at the end of a contract and not purchased on the spot. There’s no risk of having to return the car, you won’t be concerned about mileage anymore and you get to customise it anyway you want. Plus, rent to buy contracts only last 3 to 4 years on average, and there are companies that also offer maintenance included in the weekly fee.
No matter which option you choose, make sure your agreement stipulates that you can use the car with ridesharing apps. This way you’ll be able to sign up with Uber, or any other platform and use your brand new car to earn an income.
Down payment and costs
Costs will vary from one provider to another. A down payment will most probably be requested by any rent to buy company, once you decide to sign a contract. After that, you’ll make weekly or monthly payments towards owning the car. Like every other car, the one you purchase via a rent to buy contract needs insurance too.
Make sure you ask your provider if the agreement includes insurance, what it covers and if you need to pay extra for it. Maintenance is another cost you need to take into consideration. Most companies ask for regular servicing, to make sure you’re keeping the car in good condition. Among your
options might be either a maintenance agreement with the same company, or having the costs included in the rent fee which will cover servicing for the entire contract period.
Whether you decide to lease or rent to buy, research is key. Both come with advantages and disadvantages, but in the end it’s all about your needs. If, as a PCO driver, you want less commitment and more flexibility, you should choose a company with an all-inclusive service.