How much profit one makes on a bus depends on several factors like the purchasing price, regular maintenance, driver wage, parking fee, insurance, registration and permits. The amount that is paid for driver wage, parking fee, registration and permits will more or less remain the same for almost all buses. However, the amount for purchasing, maintenance, and insurance differs drastically for every bus. For example, insurance companies charge a higher premium for commercial vehicles and a lower premium for those used as private vehicles like a church or a school bus. Insurance is essential for all buses on the road. Thus the monthly premiums have an impact on the profitability of the vehicle. Owners having a long established relationship with Insurance companies are charged lower premiums, whereas new customers are charged higher premiums. Thus keeping the premiums at the lower end will leave more money and profits in the owners pocket.
The drivers wage depends on the type of license they hold. A regular license holder can drive mini buses and will cost less than a commercial license holder. The commercial drivers are needed when the bus has more than 16 seats. Because then they enter the category of mid sized buses. Getting a commercial license is a hassle because its a time consuming process. The owner will have to wait until its issued and when it does, the owner gets stuck with that driver for a long time to come. It involves giving a physical test, two written tests and one driving test. First time buyers should start with minibuses so they get to know the challenges of owning and maintaining a bus. Once they get used to the minibus then it's time to upgrade to longer buses. It's tricky to operate longer buses because they extend 4 to 5 feet beyond the rear tires. These extended portions tend to swing left and right when the bus turns right or left. Thus an inexperienced driver will most likely hit into something or somebody. Smaller sized buses are compact in design hence they can be driven with a regular license. So the bottom line is that the driver of a minibus will demand a lower compensation whereas a commercial license holder will command a higher wage. Thus minibuses will generate more profits than a bigger bus.
Every vehicle requires regular maintenance. Experts suggest performing a regular check up every 6 months. This ensures optimal performance of the vehicle. A well maintained engine will give more miles per gallon of fuel than an engine whose filtration system has not been cleaned for the past 2 years. Such a choked up engine will release more nitrogen and carbons in the atmosphere inviting harsh penalties from pollution control authorities. Thus the owner has two options either to maintain the bus on a regular basis or end up paying fines. Choosing the first option is better because the vehicle will command a higher value at the time of reselling, when it's no longer needed.Thus maintenance impacts performance as well as profitability. Another great advantage of regular maintenance is that it alerts the owner of an impending breakdown. If a part gets worn out, then it will be detected in the inspection and repairing process. Thus avoiding a bigger problem or a potential accident. Just like the saying goes, a stitch in time saves nine. Similarly regular maintenance today saves thousands of dollars in the long term and avoids potential accidents. For example if the entrance step develops a hole due to an advanced level of corrosion and is left unattended then chances are high that the entire step may give away when a heavy weight person tries to step inside the vehicle. There is an epidemic of obesity in America and such incidents will be more frequent if regular maintenance is avoided. A similar situation arises with tires. Balance loading is a critical factor in keeping a bus in good shape. The tires need to be rotated every 6 months so they all experience the same level of wear and tear. Otherwise every tire will lose its threading at different times of the year, thus requiring a visit to the repair shop more than once. So, maintenance may cost money but it keeps the bus in good operational condition, thus allowing it to transport more people and make more money for the owners.
Finally, we come to pricing which has a big impact on profitability. A new bus will cost more than a used bus. Thus a new bus will take more time to generate Returns on Investment and a used bus. If the newer version generates ROI or profits after 1 year, then a used version will generate it in just 6 months. The reason is that second hand buses cost almost half the price of a new bus. With a budget for one new bus, a buyer can purchase two used buses. Thus when there is a need to make early profits, a buyer should opt for used buses for sale. Whereas if there is a need to display status or prestige then the buyer can opt for a brand new bus. The charter industry and party organizers often buy new buses. Whereas Churches, Schools and Offices opt for used buses for sale.
If a startup entrepreneur wants to start a new transportation business and make instant cash, then he should first figure out where exactly he wants to ride the bus. Check the demand, how many people wait for a bus on that route every morning to reach their places of employment or other destinations. Find out how much fee they are ready to pay for the trip. Are they willing to pay a higher fee for a faster service? if they are in a rush then they will pay a higher fee for speedier transportation. But if they are relaxed then they will most likely avoid a higher fare bus. Start with a minibus that seats 15 people in a single trip. If people in your target location are ready to pay a dollar to get dropped at a nearby location like a Church, Shopping Mall, Cinema, Public Garden, or a beach, then you have found a quick way to make $15 in just a few minutes. Once the fare is determined, check the frequency. The bus should be occupied for almost 10 hours a day. Thus keeping it busy always will ensure the most profits. If the frequency is just limited to one or twice per day on the given route, then its time to find more routes to transport more people. Its important to take a permit from the local department of transportation before riding a big vehicle like a bus on any route. The local transportation department ensures the traffic on any route is at a normal level. They accept applications if they calculate the bus will not cause congestion during that particular time of the day. Similarly, they can reject applications if they realize the vehicle will chock a route or cause traffic jams.
Major Vehicle Exchange is a used mini bus dealership that has sold its 15 seater passenger buses to startup transportation businesses across the United States for more than 35 years. For more information about used buses for sale visit us or give us a call at 516-333-7483 today!
https://www.quora.com/How-profitable-is-purchasing-a-bus/answer/Charles-Kaufman-8
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