By Jon Goldbetter
When purchasing a medallion there are many things that you need to consider before buying that little piece of metal that could become a life-changing tool. Most importantly, you need to determine what type of medallion is right for you and your business. We will address that, along with other important tips in this article.
There are a few different types of medallions, here are the options:
Selected Wheelchair Accessible Vehicle (WAV). This medallion requires a WAV for a minimum of four years. The TLC offers many financial benefits with this type of medallion, starting with a $14,000 reimbursement, as long as the benefit was not taken by the previous owner. You also receive $4,000 per year to assist in maintenance, repairs and other expenses, since WAVs generally cost more than standard taxis to operate and maintain.
NON-Selected: This type of medallion allows you to purchase a regular vehicle, although there are no additional benefits.
Permanent WAV: You get all the benefits of “selected WAVs”, but it is cheaper to buy because, as the name states, the vehicle must always be a WAV.
Mini-Fleet. This includes two medallions: one non-WAV and one WAV. For this one, there must be a WAV in service for the non-WAV vehicle to be hacked up.
The Buying Process
Once you have determined which type of medallion best suits your needs, you need to decide a few more things.
Will you be buying in cash or financing the purchase of your medallion? Currently, interest rates are between 6 and 8%, if you choose to finance. The lender will require you to apply for a loan and you will need to put down a down payment. A monthly payment will need to be made, along with your other expenses.
It is highly recommended that, before taking any major steps, you speak to a knowledgeable attorney and/or accountant to determine whether you should incorporate or not. If you decide to incorporate, you must check with the TLC to make sure the name of said corporation is available and not too similar to other existing corporations.
Your tax professional will then set up your new company with the state of NY. A tax identification number may be required, which should be handled by your tax and/or legal professional.
As a broker, my job is to prepare all the required documents, get the buyer and seller to agree to the terms of the sale, interact with the TLC, and most importantly, to distribute the funds.
The above article lays out a basic outline of what you need to know to start the process of attaining a medallion. For more in-depth information, feel free to stop by our office, or give me or my son Tyler a call.
John Goldbetter is president of Third Generation Brokerage and Medallion Transfer, Inc., located at 435 W. 45th Street, New York, NY. For more info, call 212-582-5721.
