Loan for a new London Taxi - help please!

od0s
od0s Posts: 41 Forumite
in Loans
Hi all,

My father in law is looking to get a new London Black Taxi (electric powered). I was speaking to him yesterday and looking at the quote he has received.

The BASIC taxi is £57,099.

With a £20,000 upfront payment, the repayments are £735.77 per month.

The car dealer has not shown him any of the hire purchase information yet, but I am always weary about finance from car dealerships.

It seems that on the loan for the remaining £37,099 he would pay £7047 in interest over 60 months. This is with BlackHorse finance - who I have seen many negative reports on.

I am not sure if this is a good deal?! He feels like he should just go with the dealership, but I said I have concerns about this and wondered if he should explore other avenues.

He is 60 years old. He is purchasing the taxi, in the hope he can work at least part time until around 75 years old.

He has a home worth around £600,000 without any mortgage.

Is there something else he should look into? I wondered if he could approach Barclays (who he previously had a mortgage with) or look at an equity release?

Any advice would be really appreciated!

Comments

  • unforeseen
    unforeseen Posts: 7,279 Forumite
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    Wouldn't this be a business loan?
  • BoGoF
    BoGoF Posts: 7,101 Forumite
    Name Dropper First Anniversary First Post
    edited 23 April 2019 at 5:31PM
    What is the APR on the finance? What would the APR be on equity release?

    Personally I think it's madness comitting that sun of money for a part time job. 15 years driving he thinks.....has he not heard of the driverless car of the future?
  • Owain_Moneysaver
    Owain_Moneysaver Posts: 11,357 Forumite
    First Anniversary Name Dropper First Post
    Will the battery last 15 years?

    Will it still be usable as a taxi for 15 years? Currently the age limit in London is 15 years. This might be extended for electric vehicles, but it might not. There's a limited market for ex-taxis.

    https://www.taxi-point.co.uk/single-post/2018/03/23/Will-Transport-for-London-look-to-extend-the-15-year-age-limit-for-electric-taxis
    A kind word lasts a minute, a skelped erse is sair for a day.
  • System
    System Posts: 178,091 Community Admin
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    Business loans tend to have higher interest rates than personal loans due to the higher risks and lack of assets to recover debt from.
  • kazwookie
    kazwookie Posts: 13,835 Forumite
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    Could he not buy a decent 2nd hand taxi?
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  • od0s
    od0s Posts: 41 Forumite
    He has a diesel taxi, which will not be allowed to relicense in 2 years time. By switching to electric now he can receive a grant of £7500 towards the cost of the electric taxi.

    In think you can only keep a taxi for a maximum of 15 years, but this is changing to 12 years.

    In reality he will work full time for the next 5 years or more. Full time for him means a salary of around £50-60k per year.

    He would plan to cut down hours in future years, depending.

    Not sure if this could be a business loan? He is self employed? Is there something we are missing here in this respect?

    Thanks
  • lopsyfa
    lopsyfa Posts: 473 Forumite
    First Anniversary Name Dropper First Post
    od0s wrote: »
    He has a diesel taxi, which will not be allowed to relicense in 2 years time. By switching to electric now he can receive a grant of £7500 towards the cost of the electric taxi.

    In think you can only keep a taxi for a maximum of 15 years, but this is changing to 12 years.

    In reality he will work full time for the next 5 years or more. Full time for him means a salary of around £50-60k per year.

    He would plan to cut down hours in future years, depending.

    Not sure if this could be a business loan? He is self employed? Is there something we are missing here in this respect?

    Thanks

    Wouldn't it be better for him to use his current diesel car for two years and then switch to electric car then. Sure, he might miss out on the £7500 grant but in two years time, electric car will be a lot less cheaper than now with better batteries and I am sure he will be able to buy a two year old electric taxi (the one he is planning to buy now) for close to 50% discount on current price.
  • TrickyDicky101
    TrickyDicky101 Posts: 3,512 Forumite
    First Anniversary First Post
    I work that out as being equivalent to 7.3% APR so it isn't crazy-level interest (especially for a business loan).
  • System
    System Posts: 178,091 Community Admin
    Photogenic Name Dropper First Post
    od0s wrote: »

    Not sure if this could be a business loan? He is self employed? Is there something we are missing here in this respect?

    Thanks

    Welll you don't buy taxis to use as your own personal vehicle. Even if he is self employed he is still buying it for a business and it would still be business finance which as I said before tends to be more expensive.
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