Delivery van running costs in the UK: what to budget for

For most small delivery businesses, the van is the biggest cost after people and stock, and it's the one most often underestimated. Fuel is the cost everyone notices, but tax, insurance, servicing, tyres and depreciation add up to as much or more over a year. This guide goes through each cost category so you can build an honest figure for your own van, and turn it into a cost per mile and per drop.

We don't quote typical prices for insurance, servicing or fuel economy, because they vary enormously with the van, the driver, the area and the work. Where we quote figures from official sources, they're linked and were checked in October 2026. Any other numbers are clearly marked as examples.

Fixed costs (you pay these even if the van doesn't move)

Vehicle tax (VED)

Most vans (light goods vehicles) registered on or after 1 March 2001 pay a flat annual rate. Gov.uk lists the single 12-month payment for these vans as £360, with a lower rate of £140 for certain Euro 4 and Euro 5 vans registered in specific date ranges. Zero emission vans are included in the same categories, so electric vans now pay vehicle tax too (gov.uk: vehicle tax rates for light goods vehicles). Rates change, so check the current table when you budget.

Insurance

Business van insurance depends on the driver's age and record, where the van is kept, the van's value and the type of use. Make sure your policy covers carrying your own goods for business (or goods for hire and reward, if that's what you do), and any other drivers. Goods-in-transit cover for your stock is often separate. Get several quotes each year, as renewal prices are not always the best available.

Finance, lease or depreciation

If you lease or finance the van, the monthly payment is easy to count. If you bought it outright, don't treat it as free: it loses value every year, and you'll need to replace it. A simple estimate is purchase price minus expected resale value, divided by the years you'll keep it.

Breakdown cover

For a delivery business, a breakdown means missed drops and unhappy customers, so commercial breakdown cover with recovery is usually worth having.

MOT

Gov.uk says a vehicle needs its first MOT by the third anniversary of its registration, and then every year (some vehicles need testing from one year old) (gov.uk: getting an MOT). The test fee is small; the repairs it finds may not be.

Running costs (these scale with miles)

Fuel or electricity

Work this out from your own van rather than a brochure figure. Fill the tank, note the mileage, drive a normal week, fill up again, and divide the litres by miles (or use the trip computer, allowing for some optimism). Then:

Fuel cost per mile = price per litre ÷ miles per litre

Stop-start delivery work uses more fuel than motorway driving, and a loaded van more than an empty one, so a delivery van's real-world economy is usually worse than its official figure.

For an electric van, do the same with kWh: charging cost per kWh divided by miles per kWh. Home or depot charging is usually much cheaper than public rapid charging, so where you charge matters as much as the van. Electric vans also suit many delivery rounds well, because the daily mileage is predictable and the van returns to base every night.

Tyres

Delivery vans wear tyres faster than cars, especially on kerb-heavy town routes and when heavily loaded. Estimate how many miles a set lasts on your van, and divide the cost of a set by that.

Servicing and repairs

Budget for scheduled servicing and for wear items: brakes, clutches, suspension, wipers and bulbs. Multi-drop work is hard on brakes and clutches. Keep a record of what you actually spend each year, and use that rather than the manufacturer's servicing price alone.

Other costs to remember

• Parking, tolls and charges. Some cities have clean air zones or congestion charges. Check your local council's rules for older diesel vans.
• Cleaning and equipment. Racking, crates, straps, trolleys, a sack truck, and for food deliveries, whatever you need to keep things clean and at the right temperature.
• Phone and data for the driver's navigation and records.
• Downtime. When the van is off the road, you either hire a replacement or lose deliveries.

Payload and licences

A van's payload (how much it can legally carry) is often the real limit on heavy rounds like logs, water or veg, not the space inside. Find the plated maximum weight on the van's plate or in the handbook and subtract the van's weight as driven. Gov.uk explains that a standard category B licence allows vehicles up to 3,500kg maximum authorised mass, with a higher limit for some electric vehicles (gov.uk: driving licence categories). Check before buying a larger van or hiring a driver.

Putting it together: an example

Here's an example layout with made-up figures. Replace every number with your own.

Cost	Per year (example)	Type
Depreciation or lease	£3,000	Fixed
Insurance	£1,200	Fixed
Vehicle tax (from gov.uk table)	£360	Fixed
Breakdown cover and MOT	£200	Fixed
Servicing and repairs	£900	Running
Tyres	£400	Running
Fuel	£3,500	Running
Total	£9,560

In this example, if the van does 15,000 miles a year, that's about 64p per mile all-in, before the driver. If it's out delivering 1,000 hours a year, the fixed costs alone are about £4.76 per hour. These are illustrative only.

From cost per mile to cost per drop

Once you know your van's cost per mile and per hour, add driver time and divide a typical day by its number of drops. That's your cost per drop, which tells you which customers are profitable and what minimum order or delivery charge to set. The delivery cost calculator does the sum, and how to price delivery rounds explains what to do with the answer.

The cheapest mile is the one you don't drive

Most van costs scale with miles. Grouping drops by area and putting them in a sensible order reduces every running cost at once. Our route planning guide covers how, and the free route planner will order your stops for you. RoundSorted does the same for each day's run automatically.