Buying a second hand Private Hire Vehicle

For those starting out in the minicab trade we usually recommend that you rent a minicab before you buy one so that you get used to the new job and to reduce the upfront costs that come with getting PCO licensed. Any vehicle you do use will need to be a licensed Private Hire Vehicle (PHV).

After a while you may decide to either use your own car or buy a new one, but from January 2012 new rules were bought into place which imposed vehicle age restrictions and these are:

  • Vehicles can be no older that 10 years from January 2012.
  • From April 2012 all vehicles that are new to licensing must be no older than 5 years old.
  • All newly licensed PHVs must meet the Euro 4 standards as a minimum.

So be aware of the above as if you are buying a car which already has a PHV license then it will only have a certain amount of life left in it as a minicab if it is approaching it’s 10th birthday, so a car on an ’05 plate could only be licensed until 2015.

If you’re buying a car that doesn’t have a current PHV license then that must be less than 5 years old and also meet the minimum Euro 4 emissions standards.

With the above rules, currently in 2013, it makes sense to  buy a second hand car that already has a PHV license and is registered with the PCO and has held the registration since before 2012. This will allow you you buy a cheaper car and allow you to re-register the car until it is 10 years old. However, purchasing a brand new car will give you the full 10 years use as a Private Hire Vehicle (so long as you get it licensed every year). You will no doubt clock up a fair bit of mileage so the resale value of a new vehicle will decrease dramatically. Logically, all older vehicles will be phased out and all PHV’s will fall in the new desired age bracket of being no more than 5 years old. But we recommend using the current window of opportunity to it’s advantage.

Where to buy from

The operator you are working for will probably have some contacts for buying second-hand minicabs, but if you do decide to buy a car then TheVehicleSite.co.uk is a great place to look. Below is a list of current minicabs for sale on eBay that are still currently registered with the PCO. Work out whether the car has enough life left in it to justify the cost.

Advice for buying a minicab on eBay

Before you commit to buying don’t be afraid to ask questions of the seller and if possible check out the car in person and also get a car insurance quote for the vehicle so you know you can afford to insure the car if you win the auction. Most importantly make sure you see the correct paperwork to prove that the car is currently licensed with the PCO and get details so you can check it out on the Private Hire Licence Checker on the Transport for London website.

Lost PCO License

The simple fact is that if you’ve lost your PCO badge/license then you are not allowed to work as a private hire driver. It’s what marks you out as someone who has completed their training and got their PCO License. You must display your license in your vehicle at all times as this shows that you’re an official minicab driver and not a tout or illegal cabbie. If you have somehow lost your PCO License, it’s so important to get this sorted out so that you can continue working and earning your living.

Met PoliceIt could be that you’ve simple lost it, it’s been damaged, or it’s been stolen. If your badge or licence has been lost in a public place or stolen you must report this to the Police, who will provide you with a ‘Lost in Streets’ or Crime Reference’ number.

Complete the PCO license replacement form

Private hire drivers should download and complete the ‘Application for Replacement Badge and/or License Form‘, mark it for the attention of ‘Private Hire Driver Licensing’ and return it to TFL at the following address:

TFL – Taxi and Private Hire
Palestra
4th floor (Green zone)
197 Blackfriars Road
London SE1 8NJ

On this form you will have to include your badge/license number so ensure you always keep a copy of this, along with your contact details, why you need a replacement, and you must also sign a declaration to state that no one else has knowingly got your license.

You will then be sent a replacement badge by Recorded Delivery post and your license will be updated with your new badge number.

If you have any questions telephone the PCO Office direct on 0343 222 4444.

PCO Operators License

If you want to take bookings or supply drivers for hire then you will need a PCO Operators License, this could be a minicab office on the high street or even if you are offering a one-man chauffeur service, either way you need to be licensed.

Types of license – Small & Standard

There are two types of operator’s license and you need to decide which best fits you:

  • ‘small’ operator’s license – These may only have a maximum of two private hire vehicles available for use at any one time.
  • ‘standard’ operator’s license – You can have any number of private hire vehicles on a ‘standard’ license.

Once you’ve decided which best describes you and have got your license there is no way you change change it without gong through the entire application process so think of what your plans are for the future (next 5 years) and whether you are thinking of expanding your business. This only difference in these applications are the price, with a ‘standard’ license costing double what a ‘small’ license costs.

Requirements

PCO Operators LicenceFit and Proper Person

All applicants must show they are a ‘fit and proper’ person by completing the PHV 103 Personal Declaration Form where you show that you have complied with other legal requirements connected with running a business. The form will ask you about any previous criminal convictions, if you have ever been declared bankrupt, etc, but please ensure you fill the form in correctly as also false information could lead to the removal of your license and legal proceedings against you.

Premises

Before you can apply you must also have at least one provisional ‘operating centre’ in London where you will be taking bookings and this could simply be a high street office or even your home address but ensure that you have the relevant planning permission to do this from these premises.

How much does the PCO Operators License Cost?

The total cost of the license depends of which type you apply for with the ‘Standard’ costing twice as much as the ‘Small’ license.

Small Operators License (valid 5 years)

  • License Application Fee = £703
  • Grant of License Fee = £550
  • Total = £1,253

Standard Operators License (valid 5 years)

  • License Application Fee = £703
  • Grant of License Fee = £1,707
  • Total = £2,410

You will need to send these fees in a single payment with your application form, and please note that the application fee in both instances is non-refundable so if your operators licence application is rejected then you will only receive the grant of license fee back.

How do I apply for an Operators License?

All the forms for your application are available to download below, and you will need:

Completed applications should be sent to:

PHV Operator Licensing Section
London Taxi and Private Hire
Palestra
4th Floor (Yellow Zone)
197 Blackfriars Road
London SE1 8NJ

Private Hire Insurance

If you are using your own PCO licensed vehicle then you will need to have your own private hire insurance and as with insuring any car this doesn’t come cheap and you will need to shop around for a good deal. If you are under 25 then you will also find that premiums can be very high, with some companies not even offering insurance to those in the 21-25 age bracket.

Can I use my existing car insurance?

Due to the nature of the job you will need a policy that will cover the use of carrying passengers for hire or reward, and most standard car insurance policies do not include this. It may be worth checking with your provider as to whether they offer this ‘upgrade’.

How much does minicab insurance cost?

Typically a years insurance will cost around £2,000-£2,500 for fully comprehensive insurance on a standard saloon car, but there are a variety of factors that can effect this, but remember that not all insurance companies offer the same prices so shop around. If you feel that you can’t commit to paying this amount then you will find that most insurance companies will offer 3 month and 6 month policies as well as the standard 12 month, but the downside is that you will not be able to build up your no claims bonus with a short policy.

Private Hire Insurance PolicyHow can I reduce the cost of my insurance?

Buying a private hire insurance policy is just like getting insurance for your own private car so think of what you look for when getting that.

Levels of cover

You can choose from three levels of cover: comprehensive, third party fire and theft and third party only. Your choices for this will depend on the age and value of your vehicle. Fully Comp insurance will obviously cover everything but you will pay more, where as third party insurance will only protect your customers and other vehicle involved if you have an accident so you will be responsible for costs to your own vehicle, but it will bring down insurance costs closer to the £1,000 mark.

No claims discount

The no claims discount will only apply if you have no claims from another private hire insurance policy, you cannot normally transfer  NCD from your personal car to your minicab, but it is worth mentioning anyway as you could get some sort of discount. If you do build up your no claims you will get a substantial discount on your private hire policy ranging from 20% up to 60%. Having a clean driving license with no offences will also reduce costs.

Voluntary Excess

Adding extra voluntary excess on to your policy can save you money off your private hire insurance in the short term, but if you do increase the excess and have to make a claim then any savings will be lost. Compulsory Excess will normally start at around £250, so get quotes for increasing the level as see what the difference it.

Where can I get cheap private hire insurance?

There is no definitive answer to this as it’s not a straight-forward cost and depends many factors, so the best advice is to get as many quotes as you can. This may take a few hours longer but could end up saving you hundreds of pounds, so it’s well worth it. If you find that insurance costs are too high then you may consider renting a vehicle from your operator which will normally cover insurance and all other costs for about £35 a shift, which in some circumstances may prove cheaper than using or buying your own vehicle and having to insure it.

Replacement vehicles – a final note

If your vehicle breaks down or you are involved in an accident and your car needs to be repaired then it means you are not working and you are not earning, so it might be worth looking for an insurance policy that offers breakdown cover and replacement PCO licensed vehicles so you can still work. Costs for this will vary and so may not be an option, but when shopping for policies ask for a quote with this added and you may be surprised at how little extra it costs (or how much more!)

Should I rent or buy my minicab?

If you are just starting out in the private hire trade then it’s recommended that you hire your minicab in the first instance whilst you get to grips with the job and perhaps still finding out if it’s really the job for you.

All vehicles used for private hire need to be licensed with the Public Carriage Office so it’s not a case of simply using any car and there are certain cost implications with either option of either getting you own vehicle licensed or paying for rental. Please note that some operators will require you to have a vehicle new than 5 years old and yet again this may influence your decision as a newer car will cost more to buy.

How much does PHV rental cost?

You can usually rent a licensed private hire vehicle from your operator and this fee will vary from operator to operator but you are looking at paying around £150-£200 per week or around £35 a shift. This may sound a lot but this will also cover MOT, upkeep and repair, insurance, and should your vehicle breakdown then you can easily get a replacement and not lose out on any income.

There are also external companies now who offer PCO rentals but often these will cater for the higher-end vehicles are are only viable for short-term rents.

How much will it cost to use my own car?

After factoring the cost of buying your vehicle, the PCO Vehicle License will cost you around £114 and is outlined on this page. You will also be responsible for taxing your car, paying for the MoT, keeping the car in good condition, and you must also be aware of the amount of mileage you will be doing which may effect the amount of repairs on your car.

If you are looking to buy a second hand car then make sure you’re aware of the new rule changes for 2012 which relates to the age of your vehicle.

Top 10 PHV Manufacturers in London

PCO Licence Vehicle HireThere are currently just under 49,000 Private Hire Vehicles operating in the Greater London area and it may be of use to see what cars other drivers choose to use before deciding on buying or renting your own vehicle.

  1. Toyota – 7845
  2. Volkswagen – 7750
  3. Mercedes – 7284
  4. Vauxhall – 5961
  5. Ford – 5946
  6. Peugeot – 1899
  7. BMW – 1341
  8. Nissan – 1298
  9. Honda – 1054
  10. Chrysler – 942

These 10 manufacturers account for 41320 of the total 48778 Private Hire Vehicles in London so they should give you an idea on what other drivers choose to drive and may influence your own choices.

Medical Fitness Examination for the PCO License

As part of your application to become a PCO licensed minicab driver you will have to prove your fitness by undergoing a medical examination with a GP who will give you the same medical check as that required of drivers of large goods vehicles (LGV/HGV), buses and coaches (PCV/PSV) which is the DVLA Group 2 standard.

Please note, this cost is not covered under the NHS and you will be required to pay yourself. We have access to independent GP’s who can carry out your Medical Check on-sight. They charge a respectable rate of £80 for the full Medical Check + Eye Test. Please give us a call on 020 3780 1055 and we can facilitate an appointment within the same week.

If you have any medical condition(s) and are unsure as to whether or not you will get licensed, please book an appointment and make this your first priority. It’s advisable to make the PCO Medical examination your priority so if a problem does arise and you fail the medical then you will not have wasted time and money on the other elements of the application process. Please click here for our Medical Check Package and Costs.

What does the medical examination involve?

PCO Licence Medical Declaration FormOnce you’ve booked your appointment take along your PHV/204 form which is included in the application pack and head to your chosen GP’s surgery. You should already have filled out the first section of this form marked ‘to be completed by you’. You will be required to give a urine sample as they will be testing for diabetes so best to drink a pint of water before you leave the house. The examination will only take around 30 minutes and you will be asked questions about the following topics:

  • cardiovascular
  • endocrine system
  • musculoskeletal
  • neurological
  • psychiatric
  • vision

Based on your answers and the results of the tests your doctor will give opinion as to whether you satisfy the DVLA Group 2 medical standards and they will complete the remainder of the PHV/204 form, sign it, and put their surgery stamp on it. You will then need to send this form back with your PCO license application.

What medical conditions could effect my application?

There are no definitive yes or no’s to what what medical conditions could prevent you from passing this examinations but if you have any of the ailments listed below then it’s highly likely that your PCO license application will be refused:

  • Epilepsy
  • Insulin treated/insulin dependant diabetes
  • Monocular or poor vision
  • A progressive degenerative illness
  • A history of alcohol or drug abuse
  • A history of mental illness or severe mental handicap
  • A physical disability which might impair the ability to discharge the requirements of a vocational driver
  • Heart problems
  • Neurological or neurosurgical disorders (.e.g strokes, blackouts, head injuries)
  • Certain prescribed medications.

Please be aware that if some of your conditions are in the past then you may still pass this examination e.g. if you have had a stroke over a year ago and as long as there are no residual impairments you may be ruled fit but each case is dealt with on an individual basis so it’s worth consulting your GP about this and undergoing the medical fitness examination if you still really want to be a minicab driver.