Last week, I started to look at the subject of "cheap driving lessons" and why they may not turn out to be the bargain they seem to be.
If you missed the first part of this series, you can read it at Cheap Driving Lessons - Part 1
This time, I'm going to look at the reasons why driving instructors offer cheap driving lessons.
Virtually all driving instructors in the UK are self-employed, either working on their own as independent driving instructors, or as franchisees for a driving school.
Hardly any driving instructors are actually employed by a driving school.
Even the driving instructors you see on the road in cars with BSM/The AA Driving School, Red Driving School etc written on them, are franchisees. Being a franchisee means that the instructor has to pay BSM/The AA Driving School/Red or whichever school, a fee every week or every month, for various services supplied by the driving school to the franchised driving instructor. This charge usually includes the use of the company name, finding customers for the instructor, the use of the car and so on. The costs of a franchise with a large driving school can be pretty high - in some cases up to £370 a WEEK!
Even if a driving instructor is working on their own as an independent, they have high costs too. They have to supply their own car, so they will either hire one or buy one themselves. Instead of a franchise fee they will be paying for the cost of their vehicle - unless they can afford to buy their car outright, they will be paying either hire charges or a loan repayment. They will also have the ongoing costs of vehicle maintenance. They will also have to source their customers themselves, so they may need to take out their own advertising on the internet, phone books, local newspapers etc.
Whether a driving instructor is a franchisee or an independent, like all self-employed people, they have additional costs to meet out of the money they make. Tax and national insurance, accountants fees, phone bills, stationery, car valeting, membership of professional trade organisations, their own professional development training and so on.
So, in short, driving instructors have a lot of expenses and overheads to meet!
If a driving instructor charges £20 for an hour long driving lesson, around 2/3 of that sum will be used to cover their overheads as outlined above. So out of that £20, he or she will have to pay out a rough average of £13 to cover overheads. Obviously, that means that they then have only around £7 left for themselves as actual income for that driving lesson.
There are currently over 44,000 fully qualified driving instructors in the UK and in excess of 20,000 more people at various stages in the qualification process. Driving instructor training companies make lots of money by frequent TV and newspaper advertising campaigns for their instructor training courses, filled with rose-tinted images and glowing assurances of how much money driving instructors can earn and so more and more people fancy having a go at what they are told is an easy, secure and lucrative career.
The truth is that there is now nowhere near enough work out there for the number of driving instructors there are already, and with more and more new instructors being churned out via the training companies and their advertising campaigns, the situation is getting worse and worse.
The credit crunch and recession has had the effect of reducing the demand for driving lessons, so a steadily increasing number of driving instructors are competing for a shrinking pool of potential customers.
That's where cheap driving lessons come in. Desperate driving instructors are struggling to get work and drop their lesson prices to make their services seem more attractive to those wanting to learn to drive.
As one instructor drops their prices, another sees what they're doing and fights back by undercutting the first price...then more join in, the effect spirals and the price goes further and further down until it reaches a level where it costs the instructor more to give the lesson than they get paid for it.
It might seem like a win-win situation if you're the customer - cheap driving lessons, that's got to be good hasn't it?...but a bargain at what price?