Can the MOT make you money?

What are the benefits of adding your business to the increasing number of MOT centres?

Published:  27 January, 2014

From a purely business case perspective, there are reasons for business managers to question why they should embark on opening  an MOT test station but, over the last few years, an increasing number have done so, leaving many to wonder what the attraction is.

Of the 22,000 VTS in the UK (not including HGV testing stations or authorised test facilities), around 2,700 provide only motorcycle testing (Classes 1-3), the majority of around 20,900 provide car testing (Class 4/4a) and around 4,700 provide light commercial test facilities (Class 7).

Before thinking of charging customers a fee for testing their vehicle, you would need to meet the conditions imposed by the DVSA about the physical requirements of the testing premises. These change depending on the classes of vehicle you wish to test, together with the requirements of the operator/management and the qualifications needed by the actual MOT testers (NTs). If you can meet all of the DVSA requirements the commercial business case is the next challenge.

There is also a significant level of capital investment in equipment to take into consideration. This needs to accommodate not only the classes of vehicle you will be testing but also the fact that equipment functionality and reliability are key issues. If you cannot test due to an equipment breakdown, then you may lose valuable test fee income. Therefore, the cheapest equipment may not be the best.

This also means that you will have high fixed costs (premises, equipment and test personnel) which have to be covered by attracting customers whose vehicle needs an MOT test and who decide, at least at first glance, only on price. Additionally, there is a maximum test fee of £54.85, linked to the volume of tests which you sell (which in themselves are also limited by the constraints of the number of tests you can conduct per day) so the ability to increase your revenues is limited.

The answer is of course one of two things - either high volume testing or using the MOT test to generate alternative income streams. Both of these work, yet there are very differing views about which is best. In many other European countries, roadworthiness testing (as it is officially known) is only conducted by low numbers of dedicated test centres who are not allowed to conduct anything other than these tests. This ensures their impartiality does not create any conflicts of interest and brings in high test volumes.

The UK model has test centres that can also provide repairs to ensure that the vehicle is back on the road quickly and safely, avoiding potentially dangerous vehicles from being driven from a test centre to a workshop for repair. There are currently loud voices in Brussels who feel that the UK, Italy and some other member states should not allow testing and repairs in the same business. Equally, the UK has some of the safest roads in Europe, so our system must work quite well!

There are frequent accusations about the potential conflict of interest created in the UK but DVSA conduct an annual assessment of approximately 7.5% VTSs, checking vehicles directly after an MOT test to verify the accuracy of the decision. Over a five-year period, this typically showed that the average failure rate of the VTSs was 44%, but when checked by the authorised examiners from DVSA, this rose to 53%. If a conflict of interest existed, where failures were being falsified, then you would expect these figures to be reversed. It is also interesting to note that the most common reasons for failure where the MOT station disagreed with DVSA were headlamps, steering/ suspension and then braking.

My own belief is that it would be better if the MOT test fee was fixed with no ability to discount but I don't believe this will happen any time soon. Therefore, the decision to charge whatever you feel appropriate is yours. Personally, I have always felt that you only get what you pay for and if you try and recover your costs by charging too much for repairs, you may be creating a downward spiral.

The DVSA ability to data-mine the statistics of each MOT test to provide very accurate averages also ensures that deviating from the norm risks being subjected to unwanted investigations.

As the pool of MOT customers is typically geographically limited, allied to the stagnating volume of vehicles coming into the MOT scheme (vehicle sales virtually plateaued between 2007 and 2012), but with increasing numbers of VTSs and increasing efforts from vehicle manufacturers' dealers to retain older vehicles, you need to attract and keep every possible customer that you can.

Also, in reality, the differences between your business and local competition may be very small - such as the exterior appearance of your test centre, the ease of being found on the internet, your convenient location next to the train station or simply by generating that loyalty which comes from being fair and honest with your price and your customers. Now that makes good business sense!

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