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School Transport Lease or Buy your Bus

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School Transport- Lease or Buy your Bus?

School Transport- Lease or Buy your Bus?

10 Jul '2018 by Ash Mohanlal

The benefits of purchasing

Like any asset, buying  outright anything has its perks: it is usually cheaper, and once you pay the cost, the asset is then yours (or your school’s property). However, the outright purchase of a minibus is an option for those who can afford to have a tidy sum that, ordinarily can often put a small dent in any small organisation’s ledger.

For schools, and other small charities, a fundraiser may be an option to raise this money. However, do watch out for the hidden costs that come with the ownership: cost of MOT, servicing, maintenance, repairs, branding, exhausts, and the list goes on.

Halfway house, a hire purchase

Like the lease-to-buy schemes on houses, or cars, many companies also offer purchase by payment in installments. You generally set a fixed amount to pay over a number of installments, at the end of which the minibus belongs to the organisation. However, the ongoing costs that comes with ownership is still there, and this may be an ongoing cost that you need to account for in the budget.

Why leasing may work for you

Leasing is often seen as more of a risk in other contexts, traditionally speaking. Technically you don’t ‘own’ the minibus, and therefore it can seem like the money is going into a hole, with no tangible asset at the end of the term (as with hire purchase and purchase options). However, leasing and hire lease options are an under-appreciated options for small businesses.

You still have a monthly fee. However, what this covers is way more than ‘the bus’. You get full cover, except for insurance and fuel. If anything breaks down throughout the month, the companies offering this option will cover the servicing and repair costs. They also come with additional services, such as MOTs and subsequent repairs, regular safety inspections (which is a requirement to get a Section 19  permits for charities with minibuses), support from minibus support team, and even roadside assistance and breakdown cover.

What do they get out of it? Well as mini-buses retain their re-sale value, the companies benefit by collecting the vehicles from you at the end of the contract, and they can continue the service.

Added Assurance

One of the things that aren’t considered in this process is the actual function of the minibus, and the high standards for safety it requires. As with the purchase options (as well as hiring), it is your responsibility to ensure the minibus has a Certificate of Initial Fitness (COIF) or Certificate of Conformity (CoC). What are these? They prove that the minibus is in a roadworthy condition. The regulations state that you need to have a road worthiness check by a qualified professional at least every 10 weeks.

You’re also responsible for ensuring that the minibus is driven by a qualified driver. What counts as qualified? A D1 licence which includes a health and eyesight check as well as the theory and practical testing with a refresher course, such as MiDAS, every 3 years, is recommended by the ISBA as ‘appropriate’ training. Again, it is important to think about the charges that are adding up, in addition to the growing responsibilities of the transport manager. Is the transport manager well equipped to monitor such compliance, and to undertake the certification activities? The answer, sadly, is no in most cases.

As you have seen, the hidden costs (both financial, and in effort) can sometimes outweigh the benefits of owning an asset. The risk around maintenance and upkeep efforts can be transferred by simply choosing to hire a minibus as opposed to buying it. There are many companies that offer funding, and related support for prospective clients, so make sure you do the legwork and look around for the company that is a good fit for your organisation.

Once the paperwork is done, then we can talk about the logistics of running a minibus (and where OFEC can help take away that headache too!).

How can OFEC help?

Got your bus sorted whether its been hired, bought or leased please call 01865 556070 or email info@route-r.co.uk to discuss how we can help with a School Bus Booking Management System to help support your needs.


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