Guide to the costs of running a van

From filling the tank to sorting out the right van insurance policy – we look at the costs involved with keeping your van on the road.

From filling the tank to sorting out the right van insurance policy – we look at the costs involved with keeping your van on the road.

Julie Daniels
Insurance expert
7
minute read
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Last Updated 22 FEBRUARY 2022

The main costs of running a van 

If you use a van for business, you’ll know how much of a challenge it is to keep your daily running costs down. Whether you’re looking to buy a new van or simply want to work out how much your current vehicle is costing you, there are key expenses you just can’t get away from. 

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.

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.

Fuel economy is also a major deciding factor: 

Diesel vs petrol
If you’re intending to use your van for regular long journeys, diesel can deliver higher miles per gallon than petrol and is typically the most popular choice for businesses.

Electric
If you use your van for local work and shorter journeys, an electric van could significantly help to slash your running costs. A full charge from empty is practically pocket change. There’s also no Vehicle Excise Duty (VED) to pay if it’s 100% zero emissions – another saving not to be sniffed at.

While electric vans can be costly to buy new, the government’s plug-in grant offers a 20% discount up to £8,000 on eligible ultra-low emission new van purchases. Taking the ‘clean’ approach could save you money in the long run, and it could also boost the green credentials of your business.

Vehicle Excise Duty

Vehicle Excise Duty (VED), better known as road tax, is charged annually on almost all vehicles. VED is set at a flat rate for vans. The current rate for LGVs weighing less than 3,500kg is £275 for 12 months (correct as of February 2022).

Just be aware that if you’re the owner of a fully electric, zero-emissions van, you don’t have to pay VED but you still have to tax it. The exemption doesn’t apply to hybrids and plug-in hybrids – they pay the same annual fee as diesel and petrol vans.

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.

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.

There’s a number of other things that can determine the cost of your van insurance, including: 

  • Your age: being young isn’t likely to be a blessing when it comes to van insurance. More experienced drivers tend to be seen as a lower risk, which means their premiums are sometimes lower. Some van insurance providers set a minimum age of 21 to get cover.
  • Your driving history: every year you drive without making a claim on your insurance gives you one year’s no claims discount. This could cut the cost of your cover when you come to renew your policy. Generally, the longer you drive without making a claim, the bigger the discount on your premium could be.
  • Where you live: if you’re based in an area with a high crime rate, then you might be charged more for your insurance as there’s a greater risk of you needing to make a claim.
  • Where you park your van overnight: leaving your van in a locked garage is considered safer than parking it on the street and could result in a lower premium.
  • Named drivers: if you have several employees who might need to drive your van, you could save money by naming them individually on a policy rather than opting for ‘any driver’ insurance. Generally, the fewer drivers you have on your policy, the lower the impact on your premium will be.
  • Your voluntary excess: when you make a claim, you’ll need to pay a certain amount towards it – known as the excess. If you choose to pay a higher voluntary excess, you 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 make a claim.
  • How you pay: if you can afford to pay for your van insurance in one lump sum rather than by spreading the cost over a year, you could save money as your provider may charge you interest on the monthly payments.
  • Shopping around: one of the easiest ways to find competitive van insurance is to compare quotes from different insurance providers. 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.

Fuel costs 

The cost of fuel is never far from the headlines – and it’s a daily headache for drivers looking to reduce their running costs. While there’s not a lot you can do about rising fuel prices, there are some ways to help squeeze more miles out of your tank. 

  • Check your tyre pressures – 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. Anticipate the road ahead so you’ve got plenty of time to react. Smoother driving habits not only help save fuel, but also reduce general wear and tear, which could help keep down your maintenance costs.
  • Use stop-start – most new vans have stop-start systems that cut the engine off when you’re stationary, then automatically start it up again when you move off. Stop-start takes a bit of getting used to, but it can save you a decent amount of fuel if you’re frequently stuck in heavy traffic.
  • Clear the clutter – the heavier the load, the more fuel you’ll consume. Give your van a good clear out and get rid of any unnecessary stuff that could be adding to the weight. 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. 
Top tip
A 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 a whole bunch of receipts for your records.

Maintenance and servicing costs 

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 further down the line.

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.

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.

How much will I pay for van insurance?

The cost of insuring your van depends on a whole range of factors including the type of model it is, your age, where you live, and even whether you use your van for business or personal use. 

Whatever your circumstances, the good news is, it’s easy to save money on your van insurance. By comparing with us, 51% of customers could potentially save up to £276** on their next premium.

** Based on online independent research by Consumer Intelligence during November 2021. 51% of customers could achieve this saving on their van insurance through Compare the Market.

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