So, you plan to start a limousine service, but you need to first buy a limo. There’s so many different types of limos to choose from. Which one should you buy?
Let’s say that you are deciding between two limousines – An SUV limo, like for example a Lincoln Navigator, or a limousine bus. A Lincoln Navigator limo is more popular and would probably get booked more, but a limo bus would probably be less expensive to purchase and may actually make you more money.
A Brand-new Lincoln Navigator limo would probably cost you about $100,000. But you could buy a used limo bus that seats about 24 passengers for about $30,000. In this case, the limo bus is cheaper. But, you also need to look at would would get more bookings.
SUV limos tend to be booked more than limo buses because they’re more popular and also classier. Let’s say, for arguments sake, that your Lincoln Navigator would be booked three times more than your bus. That might generate more profit, right? Maybe not. You could charge more for a bus. Let’s say that an SUV limo costs $450 per night to book and a limo bus costs $1000 a night to book. You’d be able to book three SUV limo runs for total revenue of $1350 to every bus run at $1000. So, yes, maybe the Lincoln Navigator would generate more revenue, but when you factor in labor costs, which would cost more because it would involve more work, you might not really be making more. That coupled with a cheaper original buy price might make a bus more worth it.
If it was up to me, I’d always start a new limousine company with a limo bus purchase. I think it just makes more sense (and dollars!)