School bus tendering – purchasing new buses?

November 20, 2019

ISUZU-bus

Tendering for next year’s school bus service and need to update your fleet?

We’re working with several transport owners to get their fleets ready ahead of the new school service that commences in January 2021. Bus operators across the country are on standby as they wait for the Ministry of Justice to open its School Transport Daily Bus Tender.

With the preowned market relatively quiet, operators are considering new bus options to ensure their fleets have the best chance of securing the tender.

What are the proposed changes and how could they affect operators?

Changes on the horizon

Following its market roadshow in August 2019, The Ministry of Transport tender is likely to feature changes to the routes and bus requirements. Among the proposed changes are vehicle age, which the Ministry is using as a proxy for vehicle emission standards, and new route groups as opposed to the previous route-by-route basis.

Proposed route groups

There are currently 1,465 daily bus routes and 686 technology routes nationally. Under new plans, it is proposed the routes will be divided into 87 groups and transport operators will have to tender an entire group as opposed to individual runs.

Age of vehicle

The proposed maximum age for large passenger service vehicles would be 23 years, and the maximum average age less than 15 years. The age limits would remain unchanged from the current contract for small passenger vehicles.

What next?

With the preowned bus resell market slow, more operators are considering new buses.

CEO of Partners Finance & Lease, Francis Fitzgerald said: “The proposed changes could have a significant impact on bus and coach operators around the country. Many operators will have fleets in good working order but if they fall outside the proposed age limit, they will need to consider upgrading their buses – new or pre-owned.

“When it comes to investment, bus operators should consider alternative options such as asset finance, allowing them to spread the load over a longer period and free up cash in the company. This way there’s less upfront risk in the first year and operators can use their new bus instantly and pay it off over a period that works for them.”

Bus finance

Whether you’re looking to update your buses now or in the future, Partners Finance & Lease offers various bus finance options.

Our bus loans can be taken out over a three, four, or five-year period and are popular with operators who want to get their new bus straight on the road.

Loans available include: hire purchase, finance lease and operating lease.

You can apply here or call us on 0800 727 101 for more information.