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#1 02-06-10 20:13:39

TurkishPirate
Verified Member
Registered: 19-04-07
Posts: 13

Going Full Time as an ADI, advice needed.

Hi all

I currently earn about £37,000 a year, but pay about £800 of that in tax a month and work 6 days on, 4 off, meaning i do 4 nights a week and 2 day shifts - totalling 60 hours in a row, followed by 4 days off.  This is killing me!

If i were to give this up, on my calculations my tax and NI would be vastly lower and i could ditch shifts and atrocious working conditions and never being able to get a single day off. The work life balance in my eyes would be much better.

So, could i realistically earn £2000 a month? Realistically? Thats what i need to cover bills etc.

I estimate that i will need to do 30 hours a week, maybe more to cover cancellations etc. So in THEORY i could ditch the crap job, earn the same take home pay and not be saddled with a marriage destroying shift working job.

In addition if i earn less i would get higher tax credits etc, so that would help a bit.

Please let me have an honest opinion


Very many thanks

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02-06-10 20:13:39

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Re: Going Full Time as an ADI, advice needed.



#2 02-06-10 20:45:41

Aspyre
Member
Registered: 17-01-09
Posts: 2,754

Re: Going Full Time as an ADI, advice needed.

It would be hard, TurkishPirate.

The maths is simple: if you can do 30 hours tuition per week and charge £23 an hour, your turnover will be £690. Out of that you have to pay for your car and fuel - for the sake of argument, lets say that totals £200. Your gross taxable income is therefore £490 (on a monthly basis, say £2,205).

You can see where this is heading.

Tuition hours are not reliable. It costs money to get your custoemr base up through advertising (you'll hear anything from £0 to several thousands a year - on this planet, the latter is closest to the truth if you want to be earning £2,000 a month). Advertising may not work - and if it does, it won't everytime. You can't just turn on the tap when you need more work.

The short answer is yes, you could earn £2,000 gross - but it wouldn't be reliable if you have mortgages to pay and so on. That's not to say don't do it - just be aware of the risks. Nothing can be guaranteed.

As for your tax... if you were very creative (and very brave) you could pay almost nothing all the time. But you still need to put away up to 20% of your gross to cover it if you are more realistic.

It's a huge subject.

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#3 03-06-10 00:09:36

Adi1234
Guest

Re: Going Full Time as an ADI, advice needed.

Its Possible But would be very hard. currently You have a job You dislike But The money You like. You could have a job You like but the amount of money You dislike. It`s your choice. We are meant to be exiting the recession now so maybe things will improve but at the moment alot of people in this profession are struggling.


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#4 03-06-10 07:03:14

Hilary Hughes
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From: Stockport, Manchester
Registered: 25-06-04
Posts: 1,232
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Re: Going Full Time as an ADI, advice needed.

I h ave never, in 17 years, been able to get my profit to more than 65% of takings.

Hilary.


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#5 03-06-10 07:11:53

jonsmithuk
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Registered: 27-10-07
Posts: 403

Re: Going Full Time as an ADI, advice needed.

Don't do it

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#6 03-06-10 20:31:13

robcooling
Verified Member
From: Nottingham
Registered: 02-04-09
Posts: 1,451
Website

Re: Going Full Time as an ADI, advice needed.

Although possible, it would be tight, and therefore stressful.

Bear in mind you'd probably not make the full wage some months - take December for example, I find I'm always down to 50% workload for the last 2 weeks of December and 1st 2 weeks of January.


Rob

http://www.appledriving.co.uk - Driving Lessons in Nottingham

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#7 04-06-10 16:38:04

Colin Martin
Verified Member
From: Southsea
Registered: 21-01-05
Posts: 2,465
Website

Re: Going Full Time as an ADI, advice needed.

Aspyre make the case well TurkishPirate. The sums might work out that if you do 30 hours teaching, about 40 hours out of the house, then at £20 an hour you will gross £600. It is your costs that eat into this big time and leave a lower profit so you pay less tax. Thing is you have also paid the costs. For example £100 profit in your pocket might attract some tax, say £20, but you are still left with £80. £100 spent on petrol is spent wit £0 left.

There are ways to keep your costs down first. Buy an older car because depreciation is one of your biggest costs. Even look to auctions if you are brave enough you could buy a car and still sell it for more than you bought it for a year later rather than loose £2,000 on a new one, that's 100 hours teaching.

Getting pupils will take time. Use creative marketing that costs almost nothing. Print some leaflets on your computer and if you aren't teaching post leaflets. Look into proximity marketing (Google it). You can make a proximity marketer with any laptop and free software then go to a college, sit in the canteen with a coffee and set it going. If you are like me you will just look like a mature student at a laptop. Every newsagent you see with a noticeboard in the window get a poster or card in there. A website will work well if you can get a good search engine result. Thing is this is getting very competitive so it could start costing money and/or time so be careful with resources here.


Colin Martin
The Bright Red L http://thebrightredl.com
Instructor Apps http://drivinginstructorapps.co.uk
Apps Video channel https://www.youtube.com/colinbythesea

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#8 05-06-10 09:09:55

jonsmithuk
Verified Member
Registered: 27-10-07
Posts: 403

Re: Going Full Time as an ADI, advice needed.

Buying a used car will almost cetainly run up huge maintenence costs, which while being a tax expense , still have to be paid for at the time.
Also its a double whammy, as you cannot teach while your car is being repaired. Driving school cars get a lot of abuse, so when buying a 2/3 year old car expect brakes,clutch and tyre replacement to figure in your expected costs. Good luck with it anyway. You are joining an ever less exclusive club. 2003 30,000 instructors, 2010 60,000. Plus huge unemployment in our youth , plus less of them. I hate to be a doom and gloom merchant, but to make money in this industry you need a niche market or a lot of luck. Do you speak Polish for example .

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#9 05-06-10 17:04:10

mikerow
Verified Member
From: Norfolk
Registered: 23-08-05
Posts: 363
Website

Re: Going Full Time as an ADI, advice needed.

Let you tell you about my day.
Full day booked 8/10 10.30/12.30 1.30/3.30 4/5 5.30/6.30 = 8 hours
Wednesday 4/5 cancelled
Friday the sun is out and the weekend is on the way. 1.30/3.30 called as she wanted to cancell. Normally a good reliable pupil so smiled and said that would be OK. She then re booked for next Saturday.
Got to the 5.30 he cant find the paper part of his licence. Get home at 5.45 while writing this he calls to say he has found it, finish this post turn the oven off and put Dr Who on record.
Another day in the life of a driving instructor.


http://www.learnnpass.co.uk/

Driving should be fun

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#10 05-06-10 18:28:23

Colin Martin
Verified Member
From: Southsea
Registered: 21-01-05
Posts: 2,465
Website

Re: Going Full Time as an ADI, advice needed.

Buying a used car will almost cetainly run up huge maintenence costs, which while being a tax expense , still have to be paid for at the time.
Also its a double whammy, as you cannot teach while your car is being repaired. Driving school cars get a lot of abuse, so when buying a 2/3 year old car expect brakes,clutch and tyre replacement to figure in your expected costs. Good luck with it anyway.

I have to disagree. The new cars I bought have been the ones with expensive problems that caused cancelled lessons. A few years back I had a Micra from a garage which kept a dual controlled car as a courtesy car. Problem was the dual controlled car was always booked out for scheduled servicing so when the car broke down there was never a courtesy car. One break down was 6 weeks off of the road. The only solution I see to this is to lease a car and if breakdowns are a concern then this is the ideal solution.

I don't see that buying a 3 year old car with under 20,000 miles on the clock is any different to buying a new car that gets to about 9 months old and you have a car with the same mileage on. So the maintenance costs will be the same If you are happy with DIY or a good local garage then they will certainly be cheaper than main dealer. Brakes and clutches will last the same mileage. In fact all I remember of owning new cars is rows in main dealers about cars that kept breaking down and over the top bills to service and fix them. Where do they get off charging £5 a time for spark plugs when a motor factor sells the same ones for 80p each and brake pads at £80 a set when the same brake pads made by the same supplier are £15 at a motor factors.

Warranties can be bought from the DIA that cover driving school cars and after my Nissan experience when every fault was because it (the car they supplied with duals on a driving school deal) was being used as a school car so they pulled the wear and tear argument. Never did get the rattling gearbox repaired under warranty. I have a few contacts who hire out dual controlled cars, from my new car owning days, so find hire companies in case the worst happens.

My current car bought at 3 years old has had routine maintenance (by me because I love tinkering with cars) for 3 years and runs so well I don't want to part with it. My previous car I bought at 3 years old and after 10 months sold it to a pupil who liked it and kept asking to buy it. I sold it for more than I paid for it. It had 20,000 mile service intervals and didn't need any maintenance while I had it except for a burnt out starter at 25,00 miles which went the evening before a pupils early test the next day. Fortunately she had her own car which we took to the test. Even a leased car would have been hard pressed to get a replacement car out overnight. I know I could eat these words tomorrow, but I have never had to cancel a lesson or test because of a problem with older cars.

The tax situation is no different but you will suffer a bundle less depreciation. Depreciation is real money you have to earn it to pay it. I am looking to replace my car now and will go to the auctions for a nice low mileage serviced up to date 3 year old Focus. I expect to get one at under £5,000. This is a car with a list price new at the time of about £17,000. Somebody will have lost £12,000 over 3 years, probably Motability as I usually go for their cars. If I keep this car 3 years and throw it away I will only loose £5,000 but I am sure it will still have some value. For me I it's a 'no brainer'. My current Focus and Boxster together cost me less than a new Fiesta and my maintenance costs for both are less than my new cars ever cost to maintain at main dealers.

I just don't want to throw away the sort of money I used to on new cars. I would much rather pay £2,000 a year off of the mortgage than throw it away on the car market.


Colin Martin
The Bright Red L http://thebrightredl.com
Instructor Apps http://drivinginstructorapps.co.uk
Apps Video channel https://www.youtube.com/colinbythesea

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#11 06-06-10 19:27:51

Target
Verified Member
From: Winchmore Hill North London
Registered: 17-01-05
Posts: 5,695
Website

Re: Going Full Time as an ADI, advice needed.

Lets get serious here....Buying a second hand car is risky business, and if your looking to earn £2000 per month, your be doing some serious mileage. I could easily do 30,000 a year.

It would be better to get a contract hire INITIALLY and then look to down scale your costs overtime once you build up your client base. You may save money, but will you actually be able to charge top dollar for your lessons. Yes its competetive but will you actually earn more.

I agree with Hiliary 65% sounds about right. Although costs could be reduced, as mentioned it could backfire, and you cannot afford to have anything go wrong. It will certainly cost you more at the beginning to run your business as it will after you are established. Then again, take a risk and it could pay off. Im pleased that both my cars over the last 4 years on contract hire and never spent one signal day off the road.( service excluded ) Thats more than can be said of the second hand car I bought last year.

As you say. Look to book more hours to allow for cancellations, assuming you want some holidays your year will run for 11months.

It sounds like your job is not too different to this. I worked Saturday and Sunday today as extra now im doing paperwork all evening.

I have practically lost my life since I started this. Got some new ideas coming up which may change things around, but I literally work 7 days a week.

Could you not just take a pay cut and do less hours at your current job?


Approved Driving Instructor ADI(car)
Cardington Grade (A) Diamond Special DIA MSA IAM ROSPA (Silver)
QEF Mobility Qualified
Taxi Driver Training DATT
BTEC Qualified Assessor
www.targettuition.co.uk
http://www.facebook.com/TargetTuition

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#12 06-06-10 20:00:34

Hilary Hughes
Verified Member
From: Stockport, Manchester
Registered: 25-06-04
Posts: 1,232
Website

Re: Going Full Time as an ADI, advice needed.

I agree with Hiliary 65% sounds about right. Although costs could be reduced, as mentioned it could backfire, and you cannot afford to have anything go wrong.

Thank you, Target.

I'd also like to say that I love your of little piece of imagery in backfire... smile

Very nice.

Hilary.


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#13 06-06-10 21:30:35

Target
Verified Member
From: Winchmore Hill North London
Registered: 17-01-05
Posts: 5,695
Website

Re: Going Full Time as an ADI, advice needed.

When someones right I say their right.

I think its worth mentioning that you have been in this profession alot longer than others, and probably run a tight ship.

It takes alot of hard work to gross £2000 per month and maintain that year on year.

This job is not a walk in the park, and its painful watching my wife come home at 6pm, then I leave the house 30 minutes later to see her again just before bedtime.

Personally speaking I still think this profession has yet to bottom out, and is still tipping itself into recession. ( notice how many price threads we have recently ) lack of work etc etc. Its common talk now of forums, whereas 5 years ago you would have been branded as a crap instructors for saying you did'nt have enough work.

BUt manage well you can find yourself getting your life back. What ive tried to do is employ my wifes services to cover admin, but its difficult when it comes to booking pupils as my diary is so complicated. But it would help a great deal if your wife for example was able to help with some work, it can really take the burden off of office work, calls, marketing, emails, stationary etc etc.


Approved Driving Instructor ADI(car)
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#14 06-06-10 21:55:55

Hilary Hughes
Verified Member
From: Stockport, Manchester
Registered: 25-06-04
Posts: 1,232
Website

Re: Going Full Time as an ADI, advice needed.

Yes, I think you have some valid points there.

I am  fortunate now in that at I can manage on a 3 day week ( there are a few reasons for that ) but I guess I'm fortunate as I've been feeling burned out for some time now and doing less hours has taken some pressure off.

I now believe this is a young person's game - mainly becasue of the hours but also because the DSA are interfering more and more and it takes someone of a different makeup to me to take that on board.

You could also say that I'm just turning into a miserable old so and so  lol

Hilary.


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#15 06-06-10 21:59:27

Aspyre
Member
Registered: 17-01-09
Posts: 2,754

Re: Going Full Time as an ADI, advice needed.

You could also say that I'm just turning into a miserable old so and so  lol

Hilary.

You wouldn't be the first, Hills wink

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#16 07-06-10 06:52:17

Target
Verified Member
From: Winchmore Hill North London
Registered: 17-01-05
Posts: 5,695
Website

Re: Going Full Time as an ADI, advice needed.

3 days would be 24 hours to me if I could do it.

I'm not so fortunate ( at the moment ) i have to do(book) 35-40 hours a week, anything less and we start to misout on holidays etc etc. That takes some 6 days a week to achieve and you could be doing 50 hours one week with only 25 hours the next.

Not helped with the recession and the wife being made redundent 3 times in 2 years.

So TP actually earns more in one wage than we do here in 2.

Ive actually started some less leaving me driving for 1 hour between. Have a lesson Tue and Web starting at 8:30 and ill leave my house at 7:30 to be on time.

Thats the way of this business. :evil:


Approved Driving Instructor ADI(car)
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#17 07-06-10 07:35:26

Hilary Hughes
Verified Member
From: Stockport, Manchester
Registered: 25-06-04
Posts: 1,232
Website

Re: Going Full Time as an ADI, advice needed.

I remember attending a business course just before I became an ADI and it was stressed that you must have at least one regular day off a week. I stuck with that and gradually cut back a half day at a time.

In retrospect, I now see that the most mistakes I've made in life were when I'd tried to do too much at once and overdone it, thus causing more problems leading to more mistakes etc.
Bill Gates mentioned similar in his book about getting into an upward spiral rather than a downward one ( I think he poached the reasoning from one of my blogs  big_smile ).

Indeed, I can still fall into that trap even now.

Hilary.


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#18 07-06-10 11:44:26

Colin Martin
Verified Member
From: Southsea
Registered: 21-01-05
Posts: 2,465
Website

Re: Going Full Time as an ADI, advice needed.

Lets get serious here....Buying a second hand car is risky business, and if your looking to earn £2000 per month, your be doing some serious mileage. I could easily do 30,000 a year.

Again I have to disagree. A 3 year old car with 20,000 miles on the clock driven by one or 2 people is probably in better condition than a driving school car bought new when it hits 9 months old having 20,000 miles on it and a lot of different learners driving it. If we reckon to keep cars to about 90,000 miles they both have 70,000 miles left in them for the same maintenance costs. Just one will cost a lot less on depreciation.


Colin Martin
The Bright Red L http://thebrightredl.com
Instructor Apps http://drivinginstructorapps.co.uk
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#19 07-06-10 15:16:49

robinsamuels
Verified Member
From: Milford Haven, Pembrokeshire,
Registered: 09-03-08
Posts: 425
Website

Re: Going Full Time as an ADI, advice needed.

I'm sort of half way between these two points regarding the cars. I personally buy virtually new (ex-demo or delivery mileage) cars, but limit them to the cheaper end of the market. I initially ran a rather used pug 306 with and that caused me nothing but problems. After that I bought an ex-demo Suzuki Ignis and that lasted till 120,000 when a pupil snapped the gearbox on test (!). I replaced that with my current Kia Picanto, which has just gone over 100,000. The Ignis cost me just shy of £7000 and the Picanto £6000. In 8 years that's £13000, or just over £30 per week (plus servicing etc) which I would be very hard pressed to match on a contract hire car. OK, I may risk losing a day here and there, but in my mind it's a risk worth taking as it reduces my weekly overheads considerably.

I've never seen the point of buying an expensive, new, car just to charge a quid or so extra on lessons. I'd love to run something like an A Class, or a new mini cooper, but I just don't want to spend that much money out only to see the value drop like a stone.


When it gets to the stage of sadobestionecrophilia, give up: Otherwise known as flogging a dead horse!

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#20 07-06-10 16:25:21

jonsmithuk
Verified Member
Registered: 27-10-07
Posts: 403

Re: Going Full Time as an ADI, advice needed.

Isn't the depreciation tax deductible ?

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#21 07-06-10 16:52:45

Colin Martin
Verified Member
From: Southsea
Registered: 21-01-05
Posts: 2,465
Website

Re: Going Full Time as an ADI, advice needed.

Isn't the depreciation tax deductible ?

The capital write down of your vehicle you use for tax purposes is deductible. The amount of capital write down is decided by the revenue not how the car actually depreciates. The rules have just become less favourable in this respect and that's before whatever happens in the budget with capital gains tax coming in for a hard time. This becomes an issue when you sell your car because if you have depreciated it for tax purposes to less than you sell it for you are liable to tax on the difference, a problem a lot of people who used the 100% write down in the first year are finding.

The amount you get back, or reduce your tax bill by, will only be a proportion of the depreciation. Lets say this is 20%. So in a year you could have the following scenarios:

Car 1 - Depreciates £3,000 in a year. After tax calculations you get 20% of £3,000 off of your tax bill, £600. So in this year you have to earn £2,400 to fund this depreciation. 120 hours at £20 an hour.

Car 2 - Depreciates £1,000 in a year. After tax calculations you get 20% of £1,000 off of your tax bill, £200. So in this year you have to earn £800 to fund this depreciation. 40 hours at £20 an hour.

So you work 80 hours extra in a year for the first example just so the car exists.

The percentages for tax depreciation calculations are the same being based on the amount you buy the car for so a less expensive car will be written down less for tax purposes.

The actual depreciation is a bit of crystal ball gazing you do when you buy a car. There was a time when Minis were first launched that they sold for more a year old than when new. I have seen year old Fiat Pandas at auction in nice condition with low mileage sell at around £2,000 a couple of years ago. I have also seen a 2 year old car of a less popular make with almost no miles in immaculate condition not sell because even the traders at the auction weren't prepared to start at £1,000. This was a trade in car so somebody took a hit on it's value.


Colin Martin
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#22 07-06-10 21:46:02

Target
Verified Member
From: Winchmore Hill North London
Registered: 17-01-05
Posts: 5,695
Website

Re: Going Full Time as an ADI, advice needed.

I would'nt try to argue the case.

We all have different options which will suit us all, the OP from what I gather is going to be a new instructor.

Rob. Your case thou could have easily been different, but as mentioned you took that risk.

You still needed to find the initial £7k, you still probably needed to pay interest on any loan you needed to purchase the car. Now someones about to tell me it was 0% interest. Well, it would seem everyone gets that until you actually ask for it.

However we purchase or contract hire we all have or reasons for doing that for our business and personal circumstance.


Approved Driving Instructor ADI(car)
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#23 08-06-10 15:51:17

Aspyre
Member
Registered: 17-01-09
Posts: 2,754

Re: Going Full Time as an ADI, advice needed.

Nail on the head, Target.

I think a lot of people inadvertently think they are paying nothing when they really have to spread out their capital expenditure out over time for it to be representative.

For example, you can't pay £10k for a car then say it costs you nothing when comparing to someone leasing or on a franchise paying £100 a week. This is why I keep saying that anyone driving a passably new car is spending a lot more a week than they think they are if they do the sums cleanly and properly.

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#24 08-06-10 18:46:40

robinsamuels
Verified Member
From: Milford Haven, Pembrokeshire,
Registered: 09-03-08
Posts: 425
Website

Re: Going Full Time as an ADI, advice needed.

I would'nt try to argue the case.

We all have different options which will suit us all, the OP from what I gather is going to be a new instructor.

Rob. Your case thou could have easily been different, but as mentioned you took that risk.

You still needed to find the initial £7k, you still probably needed to pay interest on any loan you needed to purchase the car. Now someones about to tell me it was 0% interest. Well, it would seem everyone gets that until you actually ask for it.

However we purchase or contract hire we all have or reasons for doing that for our business and personal circumstance.

Personally, I had to finance my first teaching car with a credit card cheque!

After that, though, I've made sure that I slowly build the funds up so I have the cash ready to buy the car outright. The only issue that could be added to the cost is the loss of interest on the amount I've taken out the bank to buy the car, but these days that's negligible. If the car were to break before I have the money aside, it's under warranty and if I'm really pushed, I will borrow the money needed.

0% is out there, you just have to know where to look for it. My local Kia/Renault dealer does 0% all year round with only a 20% deposit, on both new and used cars. I'm sure he's not the only one.

I'm not knocking anyone who feels more secure with a lease, it's their peace of mind at the end of the day, I just don't personally feel I need that safety blanket. [Waits for car to breakdown in the morning!]

Nail on the head, Target.

I think a lot of people inadvertently think they are paying nothing when they really have to spread out their capital expenditure out over time for it to be representative.

For example, you can't pay £10k for a car then say it costs you nothing when comparing to someone leasing or on a franchise paying £100 a week. This is why I keep saying that anyone driving a passably new car is spending a lot more a week than they think they are if they do the sums cleanly and properly.

I'm not sure what else you would want to add to the calculation?

To stick with your example, a 10k car that is kept for 3 years will cost £10,000 divided by 3, plus the money you get back from the sale of it (if it's worth anything at the end). Add to that the finance costs (if any), servicing, tyres, tax and insurance, plus any repairs that are needed. I don't think that anyone has suggested that simply dividing the cost of the car by the time you keep it is the cost, we're all intelligent enough to know that you have to pay to keep it on the road.


When it gets to the stage of sadobestionecrophilia, give up: Otherwise known as flogging a dead horse!

http://www.robinsdriving.co.uk

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#25 08-06-10 20:22:09

Target
Verified Member
From: Winchmore Hill North London
Registered: 17-01-05
Posts: 5,695
Website

Re: Going Full Time as an ADI, advice needed.

Actually Rob I think the figures can be simple, its just whether others are being as simple with their calculations as we think they are. ( NOT SAYING ANYONE HERE IS/OR IS NOT ).

But look at how often we here instructors telling us they make close to the magic £30k, but only pay a couple of £K in tax, when we know your looking at minimum a £5k bill.

Personally I tend to look at the bigger picture.

If your like me and the cars off the road, you would just shift your hours to another day - So have you really lost anything? It will damage your reputation a little, but not financially unless there were lessons you needed to stick to.

With any vehicle the first purchase is always tough...

I have to be honest....I have taken a further deal with Renault. They cannot be beaten by anyone and I really like the cars. However, I was this close to calling it a day and going part-time. With the Auto backup of course. If auto was doing better I was out the door, had enough of the pupils treating us like *****. Then I got an email from a special needs client who was demanding my services. SAdly he was too far away, but it made me realise that I could'nt let the PDI factorys run me away and I could'nt let the trolls get to me.

Perhaps thats another reason why instructors only contract hire, because you really dont know when your going to be left out of it.


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