Young Driver®, the UK’s foremost under-17s driver-training school, has steered clear of leasing for the first time after taking delivery of its brand-new 170-strong Suzuki Swift fleet, which will provide 150,000 driving lessons for children each year.
After 15 years, 1.5 million lessons, and multiple fleet changes, Young Driver has bucked the industry norm and purchased its new fleet outright, rather than leasing the cars. Due to a combination of strong residual values for the Suzukis, and the ability for Young Driver to only offset its loan interest and depreciation against profits – rather than the entire lease payment – the scales weighed in favour of ownership for the first time.
“We’ve had a great relationship with NatWest Commercial Banking and Lombard, its asset finance business, for the last three years,” said Ian Mulingani, Young Driver’s managing director. “We’d been discussing the possibility of a cash loan to purchase for some time, and as we drew near to the end of the lease on our previous Vauxhall Corsa fleet, we just needed the right replacement product to maximise the benefits of buying outright.
“According to CAP, the all-new Suzuki Swift will retain an excellent 55% of its value after three years and 36,000 miles, which gave Young Driver the confidence to put together a highly competitive deal with Lombard. But we also have the reassurance of a Suzuki warranty of up to seven years and 100,000 miles, so there’s potential to keep our cars for longer, improving our balance sheet.
“Furthermore, we no longer have to face punitive fees from a leasing company when the time comes to replace the Suzukis.”
Since the new Suzukis can accommodate children from the age of nine (the previous Corsa’s design dictated 10 years and above), Young Driver also has the potential to increase its earnings by introducing an even younger audience to the joys of driving.
NatWest Commercial Banking’s senior relationship manager Michelle Watkinson was enthusiastic about Young Driver’s new approach to fleet-funding:
“We have an excellent relationship with Ian and the entire Young Driver team that we have built up over the past three years,” she said.
“Because we fully understand Young Driver and its goals, we were able to connect the business with Lombard, our asset finance business, to help finance its fleet in a way that supported the business’s growth ambitions.”
Lombard’s senior relationship manager Ray Nsemwa, added:
“We are really pleased that Lombard has been able to support Young Driver with financing to help it go the distance by purchasing its own fleet. This has the potential to be transformational for its growth goals – enabling the business to expand its reach and grow its income as it continues its mission to make our roads a safer place.”
Green tech reduces carbon footprint
As the first driving school to offer carbon negative driving lessons in the UK, Young Driver is committed to teaching greener driving techniques, and using ICE/mild hybrid cars, like the Suzuki Swift, for maximum efficiency. Here, there were further economic benefits to be gained with the new fleet. Based on the manual-transmission Swift’s official combined fuel consumption of 64.2mpg, Young Driver expects to save just under £20,000* in fuel alone, compared with the less economical Vauxhall Corsa. And with a CO₂ figure of 99g/km, a Swift’s emissions are also considerably lower than that of the 117g/km for the outgoing car.
Ownership offers option to sell early and shift to EVs
Young Driver’s Suzuki fleet will comprise 160 Swift Motion models, powered by a new 1.2-litre, three-cylinder, 12v mild hybrid engine, producing 81bhp, and mated to a five-speed manual gearbox. A further 10 Swifts have been ordered with optional CVT transmission for young drivers with impaired abilities, who are not able to operate a conventional three-pedal system. All the Swifts are equipped with He-Man Dual Controls.
However, Young Driver’s funding deal means that any single car from the fleet can be sold early without penalty, and its portion of the loan paid off.
“With the future so uncertain about demand for EVs, it’s impossible to say if new drivers will want to learn in one, or not,” said Ian. “By owning the cars, we have the flexibility to react to changing trends and potentially replace some cars with EVs early so that the fleet mix is appropriate for the children we’re training.”