The death of the second hand taxi market
Cabbies can’t buy a second-hand taxi for love nor money but TXe sales are going great guns
The second-hand cab market has all but collapsed. A quick glance through the cabs for sale column in any of the trade papers will confirm that.
The number of older cabs decommissioned is now thought to exceed over 2,000 with another 1,500 working their way through the system. It’s a perfect storm because many of the cabs taken off the road belonged to the fleets and many of the mushers who decommissioned their own cabs are now looking to rent cabs that don’t exist!
Even though the uncertainty surrounding diesel isn’t going away, and the risk of a total diesel ban on cabs could happen at some time in the future, many drivers are prepared to take the gamble and buy a Euro VI TX4.
As a result, these cabs are like gold dust. Most of the dealers have waiting lists of drivers wanting to buy them and we all know what over demand does, it forces prices up. It appears that taxi drivers who looked at the market back in January saw low mileage Euro VI cabs being traded from as low as £22k, delayed their delicensing, thinking there would be no problem getting one. Six months later they snapped up the £10,000 for their old cab believing they would add £15k to the pot and get a much newer cab, hence the long waiting lists. Many of these drivers now don’t have cabs and have joined the queues to rent cabs from garages that don’t have them either.
Drivers with Euro V cabs are stuck in limbo land. The uncertainty over age limits has meant the valuations on these cabs are now all calculated on the number of plates left on the cab, based on the worst-case scenario of a 12-year age limit. The double whammy is that they have little value outside of London where the majority of licensing authorities require a minimum Euro VI standard for new licences. Even in those areas where Euro V is still an option there is no demand because the market is flooded with lots of very cheap delicensed cabs. Until we get a decision on the age limit this won’t change.
The new cab market is very different. May saw 189 new TXes join the ranks, again, another new record month for cab sales. It brings the total number of ZEC cabs licensed to nearly 1,800. This could mean we will see the psychological barrier of 2,000 cabs, or 10% of the fleet, broken very soon. If the Nissan launches this summer and sales growth continue at this rate, we could have 3,000 clean cabs on the road by the end of this year.
