If you run your own business, then you’ll no doubt know just how challenging it can be to keep on top of your finances. Whether you’re in the early days of your venture or you’ve been established for a number of years, bills can quickly add up and eat into overheads.
One business cost that is often unavoidable is insurance. Of course, you want to make sure that your business is fully-insured and covered should anything go wrong, but you also don’t want to spend hundreds of pounds on a policy that you may not need for the entire year.
It’s a common dilemma for both business owners and individuals without a permanent car – do you splash out on a long-term policy that covers your vehicle for the entire year, or do you opt for temporary vehicle insurance every time you want to drive a new vehicle? Both have positives and downfalls, and in this article, we’ll attempt to unravel which is the best option for you.
Why take out insurance?
In the United Kingdom, you cannot drive a vehicle without a valid insurance policy, both as an individual and as a business owner. As a legal minimum, you should have third-party insurance, which means you’ll be covered if you have an accident and cause damage to another person, vehicle, animal or property.
Third-party insurance, however, does not cover any other costs, such as the cost of repairing your own vehicle, or the cost of your recovery. That’s why it is recommended to take out a fully-comprehensive policy – even if you want to save money, it pays to be protected against unfortunate accidents and incidences and could save you in the long-run.
Vehicle insurance also covers lawsuits and legal fees which could be brought against you when you are involved in an accident, and it can cover other incidences such as fire and theft, should you take out a comprehensive plan. As a business owner, this is important – people are more likely to claim against a business than they are an individual.
What are the benefits of temporary insurance?
Temporary car insurance, like the policies offered by companies such as Call Wiser, have been on the increase in recent years, with frugal business owners and individuals looking to save money and get more bang for their buck. If you’re a freelancer, only hire vehicles on an occasional basis, or don’t have a permanent vehicle and instead borrow from friends and family, then there’s no point in you splashing out in an expensive coverage policy.
- Flexibility of dates: If you’re planning on making a long journey but don’t have an exact date in mind, then you’ll likely invest in a car insurance policy that covers you for an extended period. This isn’t always the most cost-effective option, as you’ll essentially be paying for coverage on days you won’t need it. That’s why temporary insurance is the cheapest and most cost-effective option, as you’ll be able to cover your vehicle for the exact dates and times – no wastage or unnecessary insurance.
- Flexibility of vehicles: Not sure which vehicle you’ll be driving on the day of your journey? Planning on picking up a hire car on the day of your travel? That’s another significant benefit to temporary insurance. Of course, if you want to, you can splash out on comprehensive “drive any car” insurance policies, but these are expensive.
- Instant coverage: Need to deliver a parcel overnight or head into town to visit a relative? Temporary car insurance makes that possible, as you’ll be able to get instant coverage for your vehicle. Don’t let long, drawn-out car insurance policies stop you from doing what you want to do – just go for a temporary plan.
- Add additional drivers: Want to take it in turns to drive the car into the city? With temporary car insurance, you can add additional drivers to your plan, often for free, to save you time and headache. Always check the small print of your policy to make sure that this option is available for you, as you may have to pay extra to upgrade.
What are the drawbacks of temporary insurance?
- More expensive: Because of the convenience of temporary car insurance, you can expect to pay more for your policy in the long-term than you would by taking out a long-term plan. Add up the costs and see which is the cheapest for your needs.
- Have to set up every time: If you’re always on the road and need to get from A to B as soon as possible, then having to sign up for a new temporary car insurance policy every time can be a challenge. Many providers have apps and one-page sign-ups to make purchasing a plan easier, but it’s still a hassle when you’re leading a busy life.
- Not tied down to any plan: Because you’re not tied down to a particular plan or policy, it’s easy to get confused over what you’re covered for. Make sure you read the terms and conditions of your policy every time you sign up – things change from provider to provider, and you won’t always be covered for things like windscreen chips or wheel replacement if you’re taking out a “cheap” temporary policy.
- Short dated: Typically, that’s the whole point of temporary car insurance policies, but this can be a downside if your trip is extended or you want to drive for longer periods of time. Of course, you can contact the insurance provider to have your policy upgraded or extended, but this isn’t the most cost-effective option.
What are the benefits of long-term insurance?
- Permanent cover: When you take out a long-term car insurance policy, you’ll be covered throughout the length of your policy. Plus, most car insurance policies will automatically renew unless you cancel so that you won’t go without cover.
- Easy to customise: Made customisations to your vehicle or want to add a second driver midway through your policy? Most insurers make it easy to customise your policy mid-period; simply get in touch and ask for assistance.
What are the drawbacks of long-term insurance?
- Locked in: Unless you have a flexible policy, you’ll be locked-in to your car insurance provider for the length of your period. Of course, you can sign up for another policy at any time, but you’ll still be liable to pay for your original car insurance policy.
- No refund: Most insurers don’t offer refunds on insurance periods that you don’t use. Whether you only drive at certain times of the year or decide to stop driving altogether, you’ll be paying for a policy you no longer want or need.
- Limited to one vehicle: Unless you take out a fully comprehensive plan, you’ll only be covered to drive one vehicle. Adding additional vehicles can be expensive.
Both temporary and permanent car insurance policies have their uses, and it’s up to you to determine which is best for your requirements and budgets. If you need to be insured on a regular basis, or you’re taking out temporary policies more than three or four times a year, then long-term car insurance may be the most cost-effective option. Happy driving!
Why Your Taxi Business Should Consider Going Green
The state of the environment is a much talked-about topic across all industries and markets, including the taxi and transportation industries. Unfortunately, cars and other vehicles are one of the primary villains regarding carbon emissions. However, taxi companies provide a valuable and vital service for so many people on daily basis, not to mention pumping money into local economies as well.
Adapting the way your run your taxi business now can have a huge impact on your success as rules, regulations, and public awareness err on the side of environmental caution.
Here, we’ll take a look at how your business can go green and the steps you can take to provide a safer environment, both financially and in terms of the world around you.
What Does Going Green Actually Mean for You?
‘Going green’ is a bit of a buzzword at the moment, with all sorts of industries capitalising on their consumers desire to be more ‘woke’ to the issues that are affecting us and the generation coming next. This is no different for taxis. Car companies have put billions into developing both hybrid and electronic vehicles that emit less carbon into the atmosphere, helping reduce the footprint they make.
Unfortunately, due to the nature of the business, taxis are obviously on the road all day and all night. Figures from a report published by the Low Carbon Vehicle Partnership and Energy Saving Trust show that private hire taxi vehicles contribute negatively to air quality, and as a result the health of the public and the drivers themselves. In central London in 2013, for example, up to 18% of nitrogen oxide emissions come from taxis. The report also states that air pollution is still the number one environmental cause of preventable illness and dead in the UK – a shocking statistic.
So, what does this mean for you? You’ve likely spent years building up a taxi fleet and might be reluctant to scrap all your diesel vehicles for costly new hybrid or electric cars.
The government’s The Road to Zero strategy is aimed at setting targets for the reduction or diesel and petrol car sales in the UK, starting with at least a 50% reduction by 2030 and an all out ban by 2040. This, as well as the potential for new emission regulations, means that futureproofing your business today will pay off in the long-term.
How Do You Start Your Path to a Greener Business?
If you are a taxi fleet owner in London, you will already have seen that new regulations came into force on the 1st January 2018. All newly-registered taxis have to be capable of zero-emission with any CO2 emissions emitted being below 50g/km.
Deciding to either adapt your taxi business for new green measures or set up a new taxi business with an eco-friendly fleet is the first step. Once you’ve made that choice, you need to start thinking of all the environmental risks your business presents and how you can mitigate them.
Obviously, you must start with the vehicles themselves. There are schemes in place to help alleviate the financial costs of going green, such as Transport for London’s £5000 grant for taxi drivers who delicense their current vehicle to buy a new hybrid or electronic one.
There are many acronyms out there pertaining eco-friendly vehicles, so let’s dive in and define them:
- ULEV: Ultra-Low Emission Vehicle
This is a car that produces less than 75g of carbon monoxide per kilometre and can drive for ten miles without emitting any carbon monoxide at all
- EV: Electric Vehicle
This refers to fully-electric cars that are powered by battery which is charged using charge points (including all Tesla cars, the Nissan Leaf, and the Kia Soul EV, among others)
These are cars that have smaller batteries than EVs that are charged through coasting and braking, meaning they have far shorter electric ranges
- PHEV: Plug-In Hybrid
These are closer to ULEVs than standard hybrids because they have larger batteries and can use electric power for longer due to being charged at chargepoints
- FCEV: Fuel Cell Electric Vehicle
These cars use hydrogen and oxygen to create an electric current. They don’t release any emission from the exhaust pipe because they are simply powered by heat and water. These are much less widely-used than the other types of we’ve mentioned because charging points are scarce.
With so much to choose from, all offering very different eco-friendly elements and at varying prices, it can be hard to even know where to start when it comes to upgrading your fleet.
One of the main things you will likely consider as a business owner is the cost. Luckily, because there is so much attention being placed on this category in recent years, the government has set up a multitude of schemes and grants to help taxi business owners conform to the new regulations put in place.
Alongside the £5000 grant mentioned above, there are several other schemes to consider, including:
- OLEV funding for taxi charging: funding for local authorities to set up a charging structure for ultra-low emission taxis
- Plug-in taxi grant: a grant for eligible plug-in vehicles that is deducted from the retail price when taxi companies by new vehicles
- EV Homecharge Scheme (EVHS): a grant for up to 75% of the cost of installing a chargepoint for the registered primary user of an electric vehicle
- VED rates/Fuel duty: all taxis that are entitled to the plug-in taxi grant are exempt from vehicle excise duty if the vehicle is over £40,000. Similarly, electric and hydrogen vehicles will not have to pay fuel duty
What About Insurance for Eco-Friendly Taxis?
Insuring your eco-friendly fleet might be a bit more expensive than a petrol or diesel fleet. This is for a number of reasons, but the main issue is that these low emission vehicles present a slightly higher risk than other cars.
This is not through any driver fault; it is simply because they are usually more expensive which means they will cost more to repair in the event of an accident. Most taxi insurance brokers will, however, try their best to find a competitive quote for comprehensive cover. Having said this, as these types of taxi becomes more prevalent on UK roads, places that can repair them will themselves become more ubiquitous, which will bring prices down considerably.
Taxi insurance brokers can also help offer some advice on how to mitigate these costs with some tips and tricks to reduce the cost of your premium. You could employ telematics in your taxis, which is black box technology that tracks the way your drivers use their vehicles. The safer they drive, the less they will pay because the broker sees they present less of a risk on average.
The best option for taxi insurance is to shop around. It might be tempting to get the bare legal minimum of motor insurance, which is third party only (TPO), however this will not adequately protect you from the costs that can accrue in the event of a claim. Look around and make comparisons where you can, this will help you in the long-term.
There are many options out there for making your taxi company greener and therefore better for the world around you. Preparation and research are key to making a relatively simple transition. With so much help available from the government and local authorities, not to mention the number of regulations quickly being put in place, you can afford to work out a greener way of running your business, without losing out on valuable revenue.
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