Cheap Driving Lessons – Industry Destroyer?

Cheap Driving Lessons-purple-star-25We’ve all seen the adverts… “First 3 hours for £6.33 each”, “5 hours for £25”, “10 hours for £75”, and even “20 hours for £200”.  For many instructors who are offering a highly-professional service and trying to make a decent living, these offers for Cheap Driving Lessons come as a complete ‘kick in the teeth’, as they strive to compete with thousands of ADIs selling their ‘professional’ services for a pittance.

The majority of instructors that I speak to feel that these special offers are cheapening the industry – after all, qualifying to become a driving instructor isn’t particularly cheap, overheads can be high (especially with the rising cost of fuel), and we all have our bills to pay.  But rarely do I find driving instructors openly admitting to be the ones offering these cut-price driving lessons; it’s almost as if they are embarrassed by the stigma attached to them by other ADIs charging a ‘normal’ rate.

So who are these instructors and driving schools, why are they able to charge so little for this professional service, and can anything be done about it?  On the other hand, should anything be done about it?  Is it a good marketing strategy to get ‘bums on seats’?  Maybe these instructors are the winners in all of this?

Who is Offering These Cheap Driving Lessons?

Across most industries, businesses use tactics (such as initial discounts and special offers) to entice potential customers to call them before their competition.  And when offering services to members of the public, the promise of financial savings is without doubt the most common way (and let’s face it, one of the most successful ways) to attract new business.

nothing-offA small minority of driving instructors do not offer any special introductory discounts at all, other than maybe a discount for block booking 10 hours.  If they’re busy, then great – their business model seems to be the one most ADIs can aspire to – they’re obviously doing something right!

For the most part, it seems generally acceptable for driving instructors and schools to offer the first lesson at half price, or even for ‘free’.  Some also do a ‘first 3 or 5 hour’ deal at a reduced rate.  But an increasing number of ADIs are offering far more than that, with longer term cheap driving lessons.  So who are they and why do they do it?

  • Newly qualified ADIs trying to rapidly expand their client-base
  • Instructors & driving schools trying to rapidly build a new client base in a new location
  • Franchised driving schools trying to rapidly fill new instructors’ diaries so that they can start charging them a weekly franchise fee
  • Poor-quality instructors who have a high pupil loss rate
  • Instructors with poor business/marketing skills
  • Instructors that are finding it hard to source work through word-of-mouth recommendation
  • Trainee instructors – franchisors selling off cheap lessons with instructors who have not yet fully qualified
  • Instructors who have extremely-low running costs, e.g. not updating their tuition vehicle on a regular basis / reducing fuel costs by spending as much time at the roadside as possible
  • Unlicensed, illegal instructors – those working without holding a valid PDI or ADI licence

How about setting a Minimum Lesson Price / Hourly Rate?

oftIt has been argued for years that the DVSA and/or Driving Instructor Associations should work to set a minimum hourly rate for driving lessons.  However, under Articles 81 and 82 of the EC Treaty and the Competition Act 1998, to set a minimum price would be illegal.  This is true whether a minimum price is agreed formally or informally.  The following is an extract from the OFT’s Competition Law Guidelines (Agreements and concerted practices), which is available to download in full by clicking here:

2.2  Article 81(1) and section 2(2) of the Act provide an identical list of
agreements to which the provisions apply, namely those which:
‘(a) directly or indirectly fix purchase or selling prices or any other
trading conditions

3.4 An agreement whose object is directly or indirectly to fix prices, or
the resale prices of any product or service, almost invariably infringes
Article 81 and/or the Chapter I prohibition. The OFT considers that
such price-fixing agreements, by their very nature, restrict
competition to an appreciable extent.

3.5  There are many ways in which prices can be fixed. Price fixing may
involve fixing either the price itself or the components of a price,
setting a minimum price below which prices are not to be reduced,
establishing the amount or percentage by which prices are to be
increased, or establishing a range outside which prices are not to

The only way a minimum lesson price would come about is if there was a change in government legislation.  This is a very long and costly process.  The government is also committed to reducing the burden of legislation, so (in my opinion) the likelihood of them ever doing so is virtually zero.

24335882_sAlso, we should consider the possible implications of our government setting a minimum price, which could in fact turn out to be far lower than most people are currently charging.  Imagine, for example, if the government settled on a strict minimum price of £10-£11 per hour – would this solve the problem?  And if it was set at say, £25 per hour, what types of people would this attract into our industry?  People chasing the income, potentially comparing it to their current minimum wage of £6.31 per hour.  It could swell the numbers of ADIs on the register to an even more unsustainable level.  Either way, I don’t personally believe a minimum price is a good move for any of us.

Cheap Driving Lessons – Ads Exposed!

Who’s earning the most?

Cheap initial offers (and even some longer term deals) are often subsidised later on in training by higher lesson prices.  As a result, what seems like a ridiculous hourly rate for introductory offers can actually result in higher average hourly rates.  For example:

Driving School A:
Initial Offer – 1st hour £10
Regular Lesson Price – £20
Cost over 40 hours = £790 = £19.75 per hour

Driving School B:
Initial Offer – 1st 5 hours for £25
Regular Lesson Price – £23
Cost over 40 hours = £830.00 = £20.75 per hour

Many customers will go with the company that offers the best initial deal, as they don’t see the ‘bigger picture’ in the long run.

Be wary of using small print!

Some initial offers for cheap driving lessons don’t actually relate to the first lessons at all – and may relate to the hire of the car on driving test day, or even a discount off Pass Plus lessons.  When carrying out my research into lesson prices, I came across a website which offered the following deals:

We have two offers in the £20 range:
4 hrs for £20 – The first lesson is a 2hr lesson, at the end of this lesson you pay £20. The other 2hrs are received on the day of your test as you have an hour for the test (you use the instructors car for the test) and an hour before the test to practice. This totals 4hrs.

5 hrs for £25 is the same as above, but if you take the pass plus course (which is a mandatory 6hrs with no test) you would receive an hour of this for free.

I don’t know about you, but my head hurts after reading all that! It all sounds a little too complex to me, and if I were the customer, I would run a mile out of sheer confusion! 🙁
If you insist on running an introductory offer, then keep it as simple as possible with no catches, which will be much more customer-friendly.

Clever Marketing Opportunity?

From an ADI’s perspective, could these offers be a great marketing opportunity?  We have already seen that by offering the first 5 hours for £25 and then setting the regular price at £23, we can in fact make more profit.  The main fear about doing so would be that clients would come along, take the five lessons, and then find another instructor offering a similar offer.  And this is a true fear.  But one could argue that over 5 lessons with a really good instructor, the learner is likely to have established such a degree of rapport with their instructor and have got comfortable with the tuition vehicle that they won’t want to change, and in fact will be happy to pay the ongoing £23 per hour rate.

craigIf you do use introductory offers, it is absolutely essential that you consider those ‘cheap’ lessons as an opportunity to showcase your skills, business and professionalismConsistently over-deliver on your pupil’s expectations.  Turn up on time, make sure the pupil gets maximum value and the best professional service you can offer.  Make sure they have fun, learn loads and go home with the biggest smile on their face.  Even if you do attract a ‘deal hopper’ who finds someone cheaper after your initial offer is over, they’re likely to book back in with you if they find their new instructor offers a truly ‘cheap and nasty’ service.

If you have the mentality of “What’s the point of trying hard?  I’m only doing this lesson for £5, which won’t even cover my costs”, then you are unlikely to deliver a good service and it’s inevitable that the customer will go elsewhere and never come back! And that’s potential earnings of £700 – £1,000 lost forever (assuming they would have taken 30+ hours of lessons).

If you’re an instructor worrying that instructors with cut price lessons will be taking your business, stay ahead of the game – what can you offer that your competitors don’t?  Is your pricing structure offering you the best return?  Are you marketing yourself effectively and are you doing a great job?

Focusing on what YOU can offer to your customers will certainly be more productive than focusing on what  your competitors are doing.

Charge what you are worth

1468594_263217637160603_530427960_nThis is a really important thing to remember.  Do you consider yourself to be delivering as good or better service than your local peers?  If so, charge accordingly.  By undervaluing yourself in offering long-term discounted lessons, you are sending out a clear message of desperation to your colleagues and prospective customers.

Two ends of the spectrum

I don’t believe we should become overly concerned with our competitors offering cheap driving lessons.  To me, there are two ends to the customer spectrum.

  • At one end are customers who are seeking the best price, largely irrespective of the instructor.
  • At the other end are customers who are seeking the best instructor, irrespective of price.

Which type of client would you like to attract?  Once you have the answer, market yourself and price yourself accordingly.

Our challenge to you – Increase your lesson prices!

We’d like you to take this challenge.  Perhaps start it on the 1st of next month.  Increase your lesson price by £1 or £2 per hour.  You may be tempted to do this for only new pupils, but I would recommend you do this for all of your current pupils – and you may be surprised to hear that very few (if any) will complain.  Those that like you as an instructor will happily pay the extra – after all, “it’s only £1”.

You may be thinking that by increasing your prices by £1 or £2 per hour that fewer people will book in with you.  In our experience, assuming you are at or below the average price in your area anyway, this is highly unlikely and is a limiting belief that will hold you and your business back.  If anything, people will perceive your services to be of more value – higher priced services tend to attract higher value customers – those that are more likely to be reliable and keen to learn.

Finally, by increasing your prices by just £1 per hour, you can give your income a significant boost.  Based on 35 hours of lessons per week, that’s an extra potential of £1,820 per year.  Enough to cover the entire cost of your ADI insurance policy and several otherdown arrow hefty costs. Increase your lessons by £2 an hour, and your income will grow by £3,640.

Food for thought? 😉

Share your views as an instructor about cheap driving lessons!  Will you be taking us up on our challenge?  Have you increased your lesson prices recently?  If so, what positive (or negative) effects did it have on your business?  We love hearing from you, so please add your thoughts in the comments below.

Finally, if you liked this article, please share it on Facebook and Twitter – simply hit one of the social media buttons below.  Thanks!

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  • Melanie Smith

    Great article! I’m about to go indi and have spoken to well established local instructors who offer no deals! I would rather set my price at the beginning and stick to it – I know I give a good service, I continually do CPD to keep up and if people don’t want to pay my price, then I don’t want them! If they go with the cheapies, they should expect a cheapie service in my opinion. If more ADI’s adopted this attitude, our industry would improve. If people ask for discount, I will say (and mean) I’m too busy to offer deals – I’m getting so many recommendations now (3years in) from people who just want a good instructor/coach and don’t care about the price, they care about the quality of the lessons and that is the way I intend to run my business – take it or leave it!

    • Good for you Melanie!
      I have been indi from day 1 and have managed to survive 4.5 years quite happily having never done any deals on prices or special offers on first lesson.
      I just don’t see the need to give profit away!
      Stick to your guns and I’m sure you won’t regret going indi 🙂

  • LIzzie

    i think a minimum price should be set, i am new to this industry, but how can people live on such extreme savings? i hear a lot of other instructrs talking about things like this, i think make it fair and set a minimum price and goverment shouls help. but this is my personal opinion, i could be wrong……

  • To be honest , and I know this May sound harsh but I don’t care what other instructors charge or what offers they use or how full their diary’s are , I look purely after myself and as long as I am kept busy I don’t get involved with any price wars. We are all different and have different needs and commitments. I am neither the cheapest or most expensive in my area but I am busy all year round. Setting a price has to be regionally as lessons in my area will be geographically cheaper than lessons for example in London

  • I have been an instructor for 11 years 9 of those as an indi although I do offer discounts on block booking and £10 off for use of car on test if the have stayed with me.
    And I have had some good feed back from my students as to why they stayed with me and not gone to a cheapie instructor the main reasons they gave was that I gave good quality lessons and felt that an instructor who charged such low prices would not give quality lessons as they would probably have to cram in a lot lessons in the day to make any money and would probably be very tiered and stressed by the end of the day, so in my opinion cheap lessons = long hours 7 days a week just to make a living so how long could anyone keep that up?
    By the way I charge £25 per hour but with discounts it averages out to about £23 per hour which I think is a fair price for the area I live in on the south coast.

  • Mark

    For me the minimum price angle will never happen so not worth considering. I have been a retailer prior to becoming an ADI and all food retailers offer goods at widely different prices so I try to position myself at the M&S end rather than the Lidl end. But for our industry there is a limit to our customer base and most costs are fixed. Therefore to earn £25-35k say it is imperative to offer a great service and quality product to enable ‘word of mouth’ to drive the business. Rightly or wrongly what I do is an initial offer to build new business then focus on making sure I do a top class professional job at full price ongoing. Those are my thoughts anyway, Merry Christmas to all Adi’s.

  • Bout time someone told everyone the reality. I watch ADI’s arguing on Facebook about this and wonder why, as they are self employed, they cannot charge a reasonable rate that they are happy with. Instead they blame it on those attracting and keeping those pupils. After all, as you said, those with the offers must be doing something right to keep the pupils.

  • All good stuff. Each to their own and don’t knock another’s way of working.

  • I believe that part of the problem is that potential pupils/parents firstly seem to think, ‘oh your getting paid £20 per hour, I only get paid £10 per hour and I work just as hard as you’, without realising that there are overheads to pay for, so out of the £20 you would be lucky to get minimum wage!

    Also everyone wants to get everything for as cheap as possible, just think if you went to the supermarket and saw an item reduced to 10p, normally £3, would you say, ‘no I don’t want that it’s nearly out of date’, or would you say ‘I may as well get it for only 10p’ and then you put it in your fridge and never use it, wasted 10p! The offer that Drive Dynamics runs is ridiculous, think they normally offer first 10 hours for £99 and at the moment have a Xmas offer, first 20 hours for £240 or something! Both of those offers are way to cheap, and as it is coming from one of the big driving schools pupils will believe that is the going rate for lessons, so why should I go with Joe Blogg down the road who is charging more.

    There are quite a few independent instructors in my area who do lessons for £18 per hour, which in my opinion is way too cheap and in order to compete other instructors may have to reduce their prices or at least will make potential pupils think that they are being ripped off by the instructor charging a ‘sensible’ rate.

  • If you put up prices for existing pupils, you must give them adequate notice. It would be unprofessional not to do so. The standard seems to be 30-days. The banks do this; we must be better than them!!

    Tell your pupils your prices are going up on 1st April and maybe some will be keen to pass their test by March. More lessons equals more profit.

    Like you say, most pupils will just accept the increase. Everyone knows prices go up. Just be professional about it, OK.

  • Michael

    Ok here Goes; I don’t normally share my ideas as I get ” No Thanks” (I mean Commission for my Hard Work and Good Idea’s) and people tend to copy them and make loads of money out of them, as its Business I was told by a fellow ADI….
    But on this occasion and a small present for 2014 from E.W.S.I. Driving School Ltd.

    We call it – The Five Numbers Equation: The way to influence the ‘Numbers Equation’ for more profit.

    • No. Of Leads
    • Conversion Rate
    • No. Of Transactions
    • Ave £ Sale
    • Margin

    The 5 points above represent the areas that can be directly influenced to increase profit. As a seller in the driving industry, you should work through the processes that will lead you to proper implementation of the above in order to leverage the desired result.

    As an example, let’s look at the following.

    Number of leads x Conversation Rate =

    Number of Customers x Number of Transactions x Average

    £ Sale = Revenues x Margin = Profits

    Firstly the number of leads we generate multiplied by our conversion rate will give us our number of customers or students.
    Remember we are not just talking about a weekly or monthly tuition payment here; there is retail, seminar activity, workshops, Testing, pre Testing, Driving packages – Intensive courses – Instructor training and so on etc etc all representing a potential ‘Transaction’.

    The more potential transaction opportunities you can offer your students the better. The benefits to the student are that they’ll be better trained, have greater loyalty, enjoy their training, be properly equipped and have access to things they ‘Want’ and as well as the things they ‘Need’.

    The benefits to the school are increased turnover and revenue resulting in more investment and better facilities for the students leading to better retention, more referrals and more revenue: in other words a win win!

    At E.W.S.I Driving School, we have 87 methods for generating leads so there are plenty of ways to get them. The conversion rate is dependant upon your skill at showing the value of your service and how it will benefit the students.

    The resultant number of students will then be offered opportunities to purchase (Transactions). When this figure is multiplied by an average sale value you get revenues.

    The number of students influences the number of transactions. The number of transactions influences the average sale. Each component can be influenced directly. The revenues are then influenced by how much margin you make and the end result is your profit.

    You cannot improve your profit without influencing the individual components of the 5 ways equation.

    Now to the numbers:

    1 Leads 1000
    2 Conversion Rate 25%
    3 Number of Customers 250
    4 Number of Transactions 12
    5 Average £ Sale £50.00
    Revenues £150,000
    Margin 75%
    Profits £112,500.00

    If we take all the numbers above and apply a simple 10% increase across the board, look at what happens.

    Leads 1100
    Conversion Rate 27.5%
    Number of Customers 302.5
    Number of Transactions 13.2
    Average £ Sale £52.50
    Revenues £209,632.50
    Margin 82.5%
    Profits £172,946.81

    Each area needs to be influenced in a particular order i.e. internal (Least or no cost) and external (cost).

    1. Margin. What margin do you work on? What’s your mark up? By influencing this in specific areas you will raise your overall margin. (No Cost)
    2. Conversion Rate. 50%, 10%? What’s yours? Raise this with better skills. (No Cost)
    3. Average £ Sale. What’s the Average £ Sale across each transaction in your business? (No Cost)
    4. No. of Transactions. How many times do they buy? (External- may incur cost)
    5. Number of Leads. How many leads do you generate in your business? (External- may incur cost)

    Each of these areas has been increased by just ten percent. This results in a 61% profit increase. In this example that means £60,446.81 on the bottom line.

    Also consider reducing your day-to-day costs by 10% and this will also have a knock on effect.

    In this example we are taking an assumed student value of £600pa to £693 pa, just £7.75 increase in the monthly spend across Retail, Test Days, Seminars, Workshops, etc

    Simple systems can have huge impact on your revenues.

    This just one of the methods that I apply in my business each year, and I do like to see where I can increase/improve my sales by selling to the general public, in offering them further courses or tuition…..

    The one thing that I do not get involved in, is letting my “Emotions” set the tone of selling, if I do, then my business will suffer and I start back at the beginning and this is where “Frustration” sets in and I copy everyone else and guess what I talk about cheap lessons, how sad is that!

    So join me and set your self a New Target for 2014, talk yourself through ‘Where are we now in 2013 ?’ ‘Where do we want to be in 2014?’ ‘ How do we get there and what is our plan? Most importantly ‘How long will it take us to get there?’

    Lastly, we as adults should be encouraging each other in how well we are doing and what should we be doing to help each other in the future.

    So have a Good Xmas and a Wicked New Years Eve

    Kind regards

    Michael Hollingbery Dip
    Learning and Development Officer

  • Great article! I think a lot of instructors who offer these silly prices do the job part time and don’t need to earn as much as a full time instructor. Having said that, if you give a good service then people will be willing to pay a realistic price for lessons.

  • All day long I see learner vehicles offering lesson prices that make absolutely no business sense whatsoever. In the last sentence I emphasize the word BUSINESS. I don’t know any ADI’s who are registered charities, and so I assume that individuals have gone into business – either through a franchise or via the indi route – to earn a living and hopefully build a worthwhile future for themselves. A couple of jaw dropping offers I have seen locally are 10 lessons for £100 and 20 lessons for £250. How do these people earn a living?

    I did my lessons way back in 1986, shortly after I started work, and I remember paying £7 an hour with the nice man from BSM in his Mini Metro. I did 2 hours a week, and over the course of a month I was spending approximately one seventh of my entry level salary on driving lessons. That was a large sum of money to me way back then, but I didn’t begrudge paying it.

    Why? Firstly because I valued the expertise of the person who was going to teach me this life skill, and secondly, and perhaps this is the most important point, all driving schools were charging pretty much the same hourly rate and nobody offered silly discounts. So it was very much a case of this is price, take it or leave it. On this point, however, I have to say that when I was looking for lessons nearly 30 years ago there were comparatively few driving schools to choose from in the good old Yellow Pages. Nowadays, do a quick search and the you will be deluged with driving schools of all shapes and sizes.

    So is this whole debate more about supply and demand? 30 years ago, there were lots of young people looking for lessons – same as it is today – but the supply of instructors was significantly less. Given those market conditions, instructors seemed able to charge a premium and not have too many arguments.

    Wind forward to 2013, and the roads are awash with learner vehicles. Hundreds of them – all after the same business, and many promising the earth for silly money. The problem is made worse because new instructors seem to be rolling off the production lines at a rate of knots, all with high expectations (not unreasonably) of of a lucrative career having spent thousands of pounds on training. For many of instructors, particularly those just starting out, the only way to get their phone ringing is to advertise eye grabbing lesson rates, but without actually going into the numbers to see if those rates are sustainable.

    Look at it this way. Anyone can stand on a street corner and sell £10 notes for £5. I absolutely guarantee that someone doing this will have a queue of customers a mile long waiting to sign up. That isn’t a business, it’s a quick route to financial ruin.

    So now, in 2013, nearly 30 years after I learned, the market has reversed and the supply of instructors vastly outstrips the supply of pupils (at least it does in my area). That can only have a very negative effect on lesson prices. In fact, I regularly get calls from prospective clients TELLING me what they are PREPARED to pay for lessons. This, I think, shows how our industry is sinking in the eyes of the consumer in terms of the perceived value of what a good ADI does.

    I have spent 3 years building up my little business, and it’s been a hard slog but it is worth it. I rather foolishly thought that after my first test pass that the recommendations would come flooding in. It is only now, after 3 years, that I am getting a steady trickle of referrals coming through, and because they have come via another learner, I don’t get any quibbles around price. When I first started, the one thing I promised myself was that I wasn’t going to compromise on the quality of what I do to justify a lower price, nor was I going to get sucked into the bargain basement end of the industry. What is the point of working for nothing? So far it has worked just fine, and people who learn with me appreciate that I do a great job for a fair price.

    For new learners, I do have an offer of the first 4 hours for £15 per hour. It earns me little or no money after expenses, but I find that after the 4 offer hours people have seen for themselves how I work and stay on the books. So far I have never had anyone decide to go elsewhere after the offer lessons have finished. So I find it is a good way of attracting new business without committing to an unsustainable ongoing pricing policy. In other words, I can earn something resembling a living.

    I honestly believe, that if you run a top quality business to the best of your ability, and if you always give 100% to every learner in every lesson that you will develop a good local reputation that will build your business and sustain you.The road ahead isn’t always easy but if you have the courage of your convictions to see it through, people will gravitate towards you over the competition and be happy to pay for the excellent service you offer.

  • jade dernbach

    Wow!! attracting blog. The price for taking car driving lessons are really attractive. I would love to join them. Thanks for sharing this post.

  • Tom Harrington LL B

    All very interesting views. perhaps the DT industry should start with higher standards of entry into the profession. That’s where the DSA comes in. Agreed, there are many excellent, educated and very skilful instructors (consultants) out there. But why do we still have some instructors subsidizing the public. Try costing a driving lesson and you would be very surprised at what the charge out per lesson.. should be. Even at £25.00, the lesson is still quite cheap. We talk of a ‘professional’ industry. Are we really professional? if so, why are many instructors charging a pittance? Its unlikely if the DTI will change some time soon. If you charge £10.00 per lesson, then, that’s what you value your services. However, if you work in an area where cheap lessons are the norm, it will be quite challenging to charge £25 + regardless of your impressive qualifications.
    I have heard the very same arguments over 40 years ago and it has never changed. In Ireland, prior to the economic downturn, lessons were between €40/45. Today, with increased costs and overheads, lessons are around €20 and even 5 lessons for €90. Bear in mind, if I charge €40 per lesson, then I need only do 20 lessons to make €800 as opposed to the instructor who earns €800 and works for 40 hours.

  • I think we have the ‘earn up to £36,000 as a driving instructor’ company to thank for this, new instructors qualifying and expecting a £36 k salary, panicking at no work and going cheap to survive.

    Thankfully here in Liverpool very few do 10 lessons for £99 apart from introductory and blocks we still manage £22 per hour and work comes in due to our good name

  • Driving instructors in Holland and Germany appear to charge 50 Euros Plus, per hour… BUT – learners in those countries are obliged by law to use a professional instructor. Could it be that, as a result, they have a more professional image? Whereas here in the UK anyone can teach a learner to drive (as long as it is not for money) so we enjoy less prestige in the mind of the public??

  • I find the post very informative and helpful. Thank You for sharing. It was worth reading.

  • Paul

    As the person that first used first 3 driving lessons for only £6.33, I now totally agree with the article, I have stopped doing any deals for the last nine months, there has been no issues in fact bookings are up. I do think I will have to give a deal in December as work gets tighter but my preferred deal is first lesson for £9.99 but now I take the hit myself and make sure my instructors always get the full rate.