What size taxi should you buy?

When weighing up what taxi to go out and buy, the size of the vehicle is a key consideration. Do you want a four- or seven-seater, or go bigger still and purchase a 12-seater minibus?

If you’re a taxi firm owner, it’s probably a good idea to have a mix of all three types of vehicles, so that you don’t have to turn passengers away because you can’t accommodate them. If you’re a taxi driver, however, you’ll have to plump for just the one vehicle. To have an overview on what are the best cars to buy for your taxi, read our recent blog on this.

In this article, we’ll look at the pros and cons of each size, discussing factors including purchase price, road tax and taxi insurance premiums.


Local authority regulations

Before you start you start looking at taxis, you need to consult the local authority that you plan to operate in. Most local authorities will accept most types of car as private hire vehicles, though there are usually some stipulations about engine size and seat width.

Clearly, a convertible isn’t an acceptable vehicle to be taxing passengers around in, no matter how fun it is to drive.

Some borough and city councils have quite detailed specifications for hackney or public hire taxis. Known as ‘conditions of fitness’, these regulations often call for vehicles to be wheelchair accessible and may require additional features such as a safety partition or bulkhead.

Busy traffic across two lanes at night

Purchase price

Without wishing to state the obvious, generally, the bigger the vehicle, the more expensive the purchase price. So, to some extent you’ll be led by your budget.

If you’re adamant that you want a seven-seater or a minibus, but your budget won’t stretch to a new vehicle of this size, you can always look to the used car market for a bargain.

If you do, you should prioritise reliability – the last thing you want is a vehicle that spends as much time off the road being repaired as it does on it.

If your budget can stretch to a new vehicle, you’ll get the added peace of mind of a longer and more comprehensive warranty.

Typically manufacturers offer three years or 60,000 miles, whichever comes first. As taxi cabs are working vehicles that means you’ll reach the mileage limit first but 60,000 miles of hassle-free driving is well worth having.


Road tax

Road tax is another key consideration when sizing up your taxi. The UK’s Vehicle Excise Duty (VED) - or road tax - system has been overhauled in recent years placing a far greater emphasis on zero, and low emission vehicles than ever before.

The current tax band system came into force on 1 April 2017 and affects cars registered after that. Any vehicle registered before 1 April continues to be liable for VED under the previous structure (important to note if you’re buying a used vehicle).

The table below, from the Gov.UK website, shows the current bands, with corresponding CO2 emissions figures and the amount payable on initial registration (first year rate) and subsequently (standard rate). Cars costing more than £40,000 to buy are subject to additional taxation.

CO2 emissions in g/km

First year rate

Standard rate


£0 £0


































Over 255



With all the other associated costs of operating a taxi, you might not be able to afford paying £1,000 plus on VED in the first year of owning it. So, when weighing up which vehicle will suit you best, check the CO2 emissions.


Fuel economy

You’re going to be notching up a fair few miles ferrying passengers about, burning lots of fuel.

It’s for this reason that many taxi drivers opt for the most fuel economical vehicles on the market such as the Toyota Prius Hybrid, which has a 1.8 diesel engine that returns 72 miles per gallon (plus its CO2 emissions are a very low 89g).

So, if you are going to go for a bigger taxi, check out the engine size. Generally, the bigger the engine, the poorer fuel economy. It’s possible to get larger vehicles with economical mid-size engines, so look around.

You should avoid a vehicle that does less than 30 MPG. Anything above 45 MPG is decent, while 60 MPG plus is super fuel efficient.

A speedometer dial on a taxi

Insurance premiums

The type of car you choose to drive will have a large impact on how much you pay for your insurance premiums.

Taxi insurance, like other vehicle insurance, is calculated on the risk you present as a driver. When you apply for insurance, an insurance provider will assess this potential risk based on a number of different factors.

This helps insurers set prices relative to each driver, so in theory a driver who is classed as a higher risk will pay more than a driver who is low risk.

One of the factors that is assessed by an insurer when they come to calculate your premiums is the vehicle you’re insuring.

In the same way as with personal car insurance, the faster your taxi will drive and the larger the engine, the more your annual insurance premium may increase.

Another thing insurers take into account is the number of passengers you expect to carry during the course of your daily business.

So, if you’re insuring a seven-seater taxi or a minibus, it’s a fair assumption on the insurer’s part that you’ll be carrying more passengers throughout the course of a year, which may result in slightly higher premiums.

On the upside, the more customers you transport, the more money you’ll be bringing in, so these things can even themselves out.


Once you’ve found your vehicle

Once you’ve weighed all the different options available and found ‘the one’, the first thing you’ll need to do is take out some taxi insurance.

Here at Taxi Insurer, we can help you find a taxi insurance policy that suits your needs and we can work out a payment plan to make your payments manageable alongside all your other business expenses.

Benefits of arranging taxi insurance through Taxi Insurer can include:

  • Unique rates for public and private hire vehicles
  • Interest-free payment plans
  • Low deposits
  • Public Liability cover
  • Employer’s Liability cover

With Comprehensive, Third Party Fire & Theft, and Third party only cover available, get a quick quote for taxi insurance today.