Guide to the costs of running a van
From filling the tank to sorting out the right insurance policy, keeping a van on the road can be an expensive business.
Here’s a rundown of the main costs of running a van, plus some money-saving tips to help you stay on the road for less.
From filling the tank to sorting out the right insurance policy, keeping a van on the road can be an expensive business.
Here’s a rundown of the main costs of running a van, plus some money-saving tips to help you stay on the road for less.
The main costs of running a van
Whether you’re looking to buy a new van or simply want to work out how much your current vehicle is costing you, these are key expenses you can’t get away from.
Buying a van
The initial cost of buying a van is going to make a big dent to your budget. So, you’ll need to decide how you’re going to finance it. If you haven’t got a wad of cash set aside, there are different finance options you could consider to help you spread the costs over a longer period of time. These range from personal loans to leasing.
If you’re buying a new electric van, you could get money off thanks to the government’s plug-in grant. It offers a maximum discount of £2,500 for some small vans and a maximum discount of £5,000 for some large vans. See GOV.UK for eligibility details and eligible vehicles.
Fuel costs
The cost of fuel can be one of the biggest expenses for van drivers. Fuel efficiency depends on the size and age of your van, as well as its mileage and fuel type.
Diesel vs petrol
If you’re intending to use your van for regular long journeys, diesel can deliver more miles per gallon (MPG) than petrol and is typically the most popular choice for businesses.
If you’re in the market for a new van, you can check MPG information on manufacturers’ websites to compare how economical various models are.
Electric
Upfront costs on an electric van are likely to be higher than a conventional petrol or diesel van. But using one could significantly help to slash your day-to-day running costs. A full charge from empty only costs a few pounds, especially if you have a home charging point and make the most of advantageous tariffs for overnight EV charging. So, the long-term overall cost will depend on how you use it and how long you keep the vehicle for.
Taking the ‘clean’ approach could save you money in the long run and boost the green credentials of your business.
Top tipA fuel card is a good way of managing your monthly outgoings more easily as you can pay in one monthly payment. It might not cost less but it could help with budgeting. It might also help with your bookkeeping as there’s no need to save receipts for your records. |
Vehicle Excise Duty
Vehicle Excise Duty (VED), better known as road tax, is charged annually or every six months on almost all vehicles.
Unlike cars, it’s set at a flat rate for vans. The 2024/25 rate for LGVs weighing less than 3,500kg is £335 for 12 months.
Owners of a fully electric, zero-emissions van, don’t currently have to pay VED. But from April 2025 most electric vans will move to the standard annual rate for LGVs.
Find out more about VED in our guide to taxing your van.
Did you know?If you lease your van, VED is already included in your monthly rental payments. However, if the VED bands change, you’ll have to make up the difference. |
Van insurance
Insurance providers allocate vans to one of 50 groups – each group helps to determine the cost of your van insurance. If you’re thinking of buying a new van, choosing one in a lower insurance group might save you money in the long run.
If you use your van for work, you’ll need commercial van insurance. This can be more expensive than regular van insurance because of the risks in carrying valuable equipment. If you’re a courier, you’ll need extra cover for the goods you’re transporting.
How much is van insurance?
The cost of insuring your van depends on a range of factors including the type of model it is, your age, where you live and whether your van is for business or personal use.
One of the easiest ways to find van insurance is to compare quotes from different providers.
It’s usually cheaper to pay for van insurance in one lump sum rather than by spreading the cost over a year as your provider may charge you interest on the monthly payments.
Maintenance and service costs
As vans often carry heavy loads and cover long distances, they may experience more wear and tear than the average vehicle.
Proper maintenance and a regular service are essential if you want to keep your van in the best condition for as long as possible. It also means that any minor problems can be dealt with before they escalate into bigger, more costly repairs.
A full van service typically costs around £200-£300 a year.
MOT
If your van is three years old or more, it will need to pass an annual MOT. Prices for an MOT can vary slightly but, by law, the most a garage can charge is:
- £54.85 for vehicles under 3,000kg
- £58.60 for vehicles over 3,000kg
If your van fails its MOT, you’ll also have to pay for any necessary repairs before it can be re-tested.
Being well-prepared for your van’s MOT can save you time and money. Read our tips on getting your van ready for its MOT.
Toll roads and low emission zones
If you regularly travel the country on business, toll road charges can eat into your budget. So, remember to factor these into your running costs.
Emissions charges may also affect you. Several UK cities have introduced charges to drive into the centre to cut congestion and improve air quality. If you drive your van through a Clean Air Zone, Low Emission Zone or London’s Ultra-Low Emission Zone, you may need to pay a charge. You won’t be charged if your van complies with local emission standards.
How can I reduce my van’s running costs?
While owning a van doesn’t come cheap, there are some steps you can take to reduce your vehicle’s running costs:
- Check tyre pressures regularly – under-inflated tyres will impact your van’s performance and you’ll use up more fuel.
- Ease off the pedals – hard braking and rapid acceleration burns more fuel. Smoother driving habits also reduce general wear and tear, which could help keep your maintenance costs down.
- Clear the clutter – the heavier the load, the more fuel you’ll consume. Only carry tools and equipment you know you’re going to use that day.
- Turn off the air-conditioning – only use air con when you really need it. Air conditioning systems are one of the worst culprits when it comes to wasting fuel.
- Don’t drive with a full tank – keeping your tank half-full will mean you’re carrying less weight.
- Increase your voluntary excess – agreeing to pay more towards a claim could reduce your premium. Just be sure you can afford the voluntary excess, as well as the compulsory excess set by your insurance provider, if you need to claim.
- Shop around for van insurance – whether you want to beat your current provider’s renewal quote or insure a new vehicle, our easy price comparison could help you find a cheaper van insurance deal.
Frequently asked questions
Is multi-van insurance cheaper if I own more than one van?
If you own two or more vans, multi-van insurance allows you to cover them under a single policy. This could work out cheaper than separate policies for each, but it largely depends on the size of your vans and the insurance groups they fall into.
Unfortunately, Compare the Market doesn’t currently offer a comparison service for multi-car insurance. But we’re a great place to start if you want to compare separate car insurance policies.
Is a van more expensive to run than a car?
Vans are generally more expensive to run than cars because they tend to consume more fuel and cost more to insure. But if you do a lot of miles each year and need space for tools or cargo, a van could prove to be the most cost-effective option in the long run.
What is the cheapest van to run?
The cheapest van to run depends on many factors, but some of the most economical models include the:
- Ford Transit Courier
- Volkswagen Caddy
- Citroen Berlingo
