The true cost of becoming an owner-operator

Commercialmotor.com has calculated it costs the average owner-operator a maximum of £34,048 to set themselves up as a single vehicle business running a 44-tonne artic.

This figure is based on cost estimates for one individual to obtain the correct licensing, skills and financial standing in order to become an owner driver running just one 44-tonne artic, without a trailer, in today's economic climate.

The first thing you need is an HGV drivers' licence. Presuming you don't have one already, you are looking at between £1,000 and £1,500 for training and the test.

And don't forget your Driver CPC training, which is anything from £35 to £120 per day on a public course, and you need to complete five days to meet the 35 hours required in total. So that's another £175 to £600 you have to fork out.

So now you can drive a vehicle, there's the small matter of getting your hands on one: the Road Haulage Association (RHA) estimates that a three-month lease for a 44-tonne artic is £7,710.

Now you have a truck you can drive, you have to get the O-licence to ensure you can do business. An application for any type of O-licence, be it restricted, standard national, or standard international, is £257. But that is before you take into account the licence issue fee of £401 (which has to be renewed every five years at £401 a time). And if you want the OTC to issue an interim licence in that time it will cost you £68, and a major change to an O-licence would be £257.

Got all of that? Right, don't forget insurance (the RHA estimates insurance for six months costs £1,928), money for services and repairs (approximately £787 would just about cover any outlay in the first eight weeks, the RHA says) and overheads (such as running an operating centre, which could set you back £1,824 for the first eight weeks, again courtesy of the RHA).

This is before you take into account the haulier's big cost: fuel. The figures the RHA estimates for running a 44-tonne artic are: gross mileage of 71,500 miles per year, or 1,375 miles per week. Therefore, the first eight weeks of operation, using a rate of 58.9 pence per mile is £5,557. It is worth noting at this point that the RHA uses the eight-week estimate as this gives an indication of how much money you will have to pay out before you start to receive money from your customers, assuming 60-day payment terms.

Finally, remember to leave some money in the bank. A holder of a standard national licence or standard international licence must prove they have £7,850 in the bank for each vehicle on that licence. If you want to run an additional vehicle, you must have proof of a further £4,350 per vehicle. A restricted O-licence holder must prove access to £3,100 for the first vehicle and £1,700 for every additional vehicle.

When you add all this together (see table), CM estimates you need £28,400 to cover your initial set-up costs and keep you trading before the money starts coming through on eight-week (or 60-day) invoice terms.

And finally, don't forget wages. If you wish to pay yourself a wage, the RHA estimates that an average HGV driver would earn - over an eight-week period - £5,634, before tax. This gives you a grand total of £34,034 so you can be on the road and working before the money flows in!


Running costs

Cost Details Amount
Wages 8 weeks £5,634
O-Licence acquisition 6 months in advance £658
Insurance 6 months in advance £1,928
Acquisition 3 months lease in advance £7,710
Overheads 50% for 8 weeks £1,824
Fuel 1,375 miles per week for 8 weeks at 58.9 ppm £5,557
Services £787
TOTAL £24,098

Source: RHA


HGV licence acquisition

Cost Amount
Test and training £1,500
Driver CPC £600
TOTAL £2,100

O-licence financial standing

Cost Amount
Standard national licence or standard international licence £7,850

Source: Gov.uk

GRAND TOTAL £34,048

TC Nick Jones still without permanent Wales office

Nick Jones

 

Plans for a permanent base for the Welsh traffic commissioner (TC) have stalled a year after he took up his full-time position in the country.

In his first annual report to the Welsh Government after being appointed Wales’ first full-time TC in October 2016, Nick Jones said his permanent office in Cardiff was “yet to be fully configured and ready for use”.

As part of the Memorandum of Understanding between the transport secretary and the Welsh Government, the TC’s office should have provisions for staff fluent in both English and Welsh. However, Jones said the Office of the Traffic Commissioner was struggling to find bilingual staff in Cardiff.

“If recruitment is unsuccessful, consideration will need to be given to providing a base in North West Wales instead, although there is a clear advantage in my being based in the capital and more readily accessible to government and civil servants,” Jones’ letter said.

Currently the work for public inquiries in front of Jones is undertaken in Bristol and Birmingham.

“Eventually, when my new team in Cardiff is in place I will be able to undertake more constructive engagement and to run specialist seminars with view to improving compliance in both PSV and haulage industries,” Jones said.

He also indicated that HGVs should be allowed to use certain bus lanes to reduce congestion, but each case should be considered on its own merits.

Jones said he was conscious that road space needs “special care” when it is used by both HGVs and cyclists and commended the initatives to train HGV drivers to better understand the needs of cyclists.

“Specialist cycle awareness is not yet to my knowledge one of the modules for HGV CPC, although this might change in future,” he added.