Calculate the true annual cost of running a van in the UK. This comprehensive van cost calculator covers every expense: fuel, commercial insurance, road tax (VED), annual MOT, regular servicing, tyres, depreciation, and city clean air zone charges. Get a cost-per-mile breakdown to help you price your work or compare ownership versus leasing.
Running a van in the UK involves significantly more cost than most people realise when they look only at the fuel bill. The true cost of van ownership includes a dozen different expenses, from commercial insurance to annual tyre replacement, MOT, servicing, VED, and city zone charges. Understanding all these costs is essential for self-employed tradespeople, delivery drivers, and businesses that depend on commercial vehicles.
| Van Model | Type | Est. Purchase Price | Payload | MPG | Annual VED |
|---|---|---|---|---|---|
| Ford Transit Custom | Medium Panel | £28,000-£35,000 | 1,100kg | 34-40 | £340 |
| Vauxhall Vivaro | Medium Panel | £24,000-£32,000 | 1,100kg | 36-44 | £340 |
| VW Transporter T6.1 | Medium Panel | £32,000-£45,000 | 980kg | 32-42 | £340 |
| Mercedes-Benz Sprinter | Large Panel | £35,000-£50,000 | 1,400kg | 28-36 | £340 |
| Ford E-Transit (Electric) | Large Electric | £50,000-£65,000 | 1,000kg | ~2.4mi/kWh | £0 |
| Citroen Berlingo/Peugeot Partner | Small Panel | £18,000-£25,000 | 625kg | 45-55 | £340 |
Commercial van insurance is significantly more expensive than private car insurance. Unlike cars, vans are usually used for work purposes and covered under a commercial policy. The type of use determines the policy category:
Most light commercial vans (under 3,500kg GVW) are taxed in the Private Light Goods or Light Goods Vehicle category at a flat rate. For 2025/26:
| Van Type | Annual VED Rate |
|---|---|
| Petrol or diesel van (most vans) | £340 per year |
| Zero-emission electric van | £0 per year (currently exempt) |
| Historic van (over 40 years old) | £0 per year (exempt) |
| Cost Factor | Diesel Van | Electric Van |
|---|---|---|
| Purchase price premium | Base | +£15,000-£25,000 typically |
| Fuel cost per mile | ~16-22p | ~3-8p (home charging) |
| Road tax (VED) | £340/year | £0/year |
| ULEZ (non-compliant diesel) | £12.50/day | Exempt |
| Servicing | £150-£350/year | £100-£200/year (fewer moving parts) |
| Range per charge | 400-600 miles tank | 150-250 miles charge |
| Charging time (fast charger) | 5-10 min to fill | 30-90 min to 80% |
| VAT recovery | 100% (business use) | 100% (business use) |
| Factor | Van | Car |
|---|---|---|
| VAT recovery | 100% on business use | 50% only (mixed use) |
| Capital Allowance (AIA) | 100% in year of purchase | 6-18% annual WDA based on CO2 |
| Benefit-in-kind (private use) | £3,960 flat rate | CO2-based % of list price (higher) |
| Payload capacity | 500-1,500kg payload | 300-500kg typically |
| Insurance | Commercial required | Standard personal sufficient |
| Image/professionalism | Trades/delivery image | More suitable for client-facing roles |
| ULEZ compliance | Higher risk with older diesels | Same rules apply |
If you are VAT-registered, you can reclaim 100% of the VAT on a new van purchase if the van is used exclusively for business purposes. This is unlike cars, where HMRC restricts VAT recovery to 50% if there is any private use. Since most vans are used solely for business, this means a £30,000 van costs effectively £25,000 to a VAT-registered business (saving £5,000 in VAT). You should also reclaim VAT on fuel, servicing, and repairs for business use.
The average annual cost of running a medium-sized diesel van in the UK is between £6,000 and £14,000 depending on mileage, insurance class, and whether you own or finance the vehicle. The biggest costs are typically fuel (£3,000-£8,000 depending on mileage and MPG), commercial insurance (£800-£2,500), finance payments, and depreciation. Use this calculator to get a personalised breakdown for your specific van and usage.
Most petrol and diesel vans under 3,500kg GVW pay a flat rate of £340 per year in Vehicle Excise Duty for 2025/26 under the Private Light Goods or Light Goods Vehicle category. Electric vans are currently exempt from VED (£0), making them particularly cost-effective for fleets. Historic vans (over 40 years old) are also exempt.
If you are VAT-registered, you can reclaim 100% of the VAT on a van purchase if it is used exclusively for business purposes. Unlike cars (where HMRC restricts VAT recovery to 50% with any private use), vans used purely for business can have full VAT recovery. On a £30,000 van, this saves £5,000 in VAT. You can also reclaim VAT on fuel, servicing, parts, and accessories for business use.
Commercial van insurance is legally required for vans used for work. Policies are categorised as: Own goods (carrying your own equipment/tools, £800-£1,500/year), Haulage/Courier (carrying other people's goods for hire, £1,200-£2,500/year), or Fleet policies (multiple vans, £600-£1,200 per van). Check that your policy covers all intended uses - a policy for "own goods" may not cover you if you also carry clients' materials.
Vans entering the London ULEZ that don't meet Euro 6 diesel or Euro 3 petrol standards pay £12.50 per day. The London Congestion Charge is £15 per day for vans not meeting emission discount criteria. Other cities including Birmingham (Clean Air Zone), Bristol, and Bath have also introduced clean air zone charges. Electric vans are exempt from both ULEZ and Congestion Charge in most cases.
Vans under 3,500kg GVW require an annual MOT after they are 3 years old, the same schedule as cars. The maximum MOT fee is £54.85 per test. Working vans accumulate high mileage and face heavy use, so they often require advisory repairs at MOT time. Budget £200-£500 annually including the test fee and likely remedial work, more for older or high-mileage vans.
New vans typically depreciate by 15-25% in the first year and 10-15% per year thereafter. Popular commercial vans like the Ford Transit Custom and VW Transporter hold value better than average due to strong used market demand. For tax purposes, vans qualify as plant and machinery and can be fully written off in the year of purchase using the Annual Investment Allowance (AIA), worth up to £1,000,000 in 2025/26.