Van Running Cost Calculator

Summary

Most tradespeople know roughly what they spend on fuel each month, because it's the cost they pay most often and notice most directly. Far fewer have an accurate figure for their van's total cost per mile — and that gap matters because it directly affects whether a day rate, callout charge, or mileage-based pricing structure is actually profitable once every vehicle cost is accounted for, not just fuel.

The costs that get missed most often are finance/depreciation (the van loses value or costs monthly finance payments whether it's driven 5,000 or 25,000 miles a year) and insurance (commercial van insurance for trade use is materially more expensive than a private car policy, and rises further with tools/stock carried and no-claims history). Maintenance and tyres are usually estimated too low, particularly for vans doing high mileage on worksite access roads and rough ground. Getting an accurate all-in cost per mile is the only reliable way to check whether your pricing — whether that's an explicit mileage charge, a callout fee, or simply "how far will I travel for this job" — actually covers what the van costs you to run.

This calculator walks through the full cost stack and a worked example, then compares the result against HMRC's Approved Mileage Allowance Payment (AMAP) rate — the tax-free rate self-employed traders and employers can claim/pay for business mileage — so you can see whether your own costs sit above, at, or below that reference point.

Key Facts

• HMRC Approved Mileage Allowance Payment (AMAP) rate — from 6 April 2026, 55p per mile for the first 10,000 business miles in the tax year, then 25p per mile thereafter — this was the first increase since 2011 (previously 45p/25p)
• AMAP is a tax-free reimbursement rate, not a legal minimum or maximum for what you charge a customer — it exists so a self-employed trader or employee using their own vehicle for business can claim a standard mileage cost without tracking every individual expense receipt
• Using AMAP vs tracking actual costs (self-employed) — a sole trader can choose to claim simplified mileage expenses (AMAP rates) OR track actual vehicle running costs (fuel, insurance, finance interest, maintenance, apportioned by business-use percentage) — not both, and not switchable year to year for the same vehicle once chosen
• Fuel cost per mile — varies by vehicle and driving pattern; a typical diesel panel van returning 35–40mpg at current diesel prices works out to roughly £0.17–£0.22 per mile in fuel alone — ****
• Finance/depreciation — often the largest single cost category and the most commonly underestimated; a van on a 4-year PCP/HP agreement or leasing deal typically costs £300–£550/month depending on size and spec, which alone is £0.24–£0.44 per mile at 15,000 miles/year even before any other cost is added
• Commercial van insurance — typically £800–£2,000+/year for trade use, varying hugely by driver age/history, van value, security features, and whether tools/stock cover is included — carrying tools in the van usually requires separate tools-in-transit cover, which is a frequently-missed add-on cost
• Servicing and maintenance — budget roughly £500–£1,200/year for routine servicing, brakes, and wear items on a van doing significant mileage, more for older vans or those doing rough-ground site access regularly
• Tyres — a set of van tyres commonly costs £400–£800 and needs replacing roughly every 20,000–30,000 miles depending on load and driving style — easy to forget as a recurring annual cost when budgeting
• Road tax (Vehicle Excise Duty) — a fixed annual cost (varies by van weight/emissions class) that doesn't scale with mileage, so it has a bigger proportional impact on low-mileage vans' cost-per-mile
• MOT and compliance costs — annual MOT fee, plus any remedial work identified, should be budgeted as a predictable annual cost
• Low Emission Zone / Clean Air Zone charges — if regularly working in London's ULEZ, or other UK city Clean Air Zones, non-compliant vans face daily charges that should be factored into the cost-per-mile for jobs in those areas specifically — ****
• The "hidden" cost of low utilisation — a van driven fewer miles doesn't cost proportionally less, because fixed costs (finance, insurance, road tax) don't scale down with mileage — a low-mileage van has a higher cost per mile than a high-mileage one, which matters when comparing cost-per-mile across tradespeople with very different work patterns

Quick Reference Table

Detailed Guidance

Worked example: calculating your own cost per mile

Take your van's actual costs over a 12-month period (or reasonable estimates for each category above) and add them together for an annual total. Divide that total by your actual business mileage for the same period. This gives your true all-in cost per mile, which you can then compare against:

1. What you currently charge for callout fees, travel time, or any explicit mileage charge — are you actually covering this cost, or subsidising travel out of your labour margin without realising it?
2. The HMRC AMAP rate (55p/mile for the first 10,000 miles, 25p above that) — if your actual cost per mile is close to or above 55p/mile, you're in the higher-cost-structure end of the range (often driven by newer vehicle finance payments or high insurance), and a mileage charge set below AMAP is very likely undercharging relative to your real costs.

Worked example: A plumber's van costs £450/month on PCP (£5,400/year), £1,200/year insurance, £150/year road tax, £45 MOT, £800/year servicing, £300/year tyres (amortised), and £2,900/year fuel at current diesel prices and 16,000 business miles. Total: £5,400 + £1,200 + £150 + £45 + £800 + £300 + £2,900 = £10,795/year. Divided by 16,000 miles = £0.67 per mile. This is above the HMRC AMAP blended rate for that mileage (10,000 miles at 55p + 6,000 miles at 25p = £5,500 + £1,500 = £7,000, or £0.44/mile blended) — meaning this tradesperson's actual costs are running well above what AMAP would reimburse, largely driven by the finance payment on a relatively new van.

Choosing between AMAP and actual-cost tracking (self-employed traders)

If you're self-employed, you must choose one method for a given vehicle and stick with it for that vehicle's ownership period — you cannot switch between claiming AMAP mileage rates and tracking actual costs year to year for the same van. AMAP is simpler (no need to apportion fuel, insurance, finance interest, and maintenance receipts by business-use percentage) and tends to favour lower-cost, higher-mileage vehicles. Actual-cost tracking tends to favour newer, more expensive vans with high finance/depreciation costs, where the real cost significantly exceeds AMAP rates — as in the worked example above. Run the comparison for your specific vehicle and mileage pattern before defaulting to whichever method you used last time, particularly after a vehicle change. ****.

Using this to set a mileage or callout charge

If you quote a standard callout or travel charge rather than itemising mileage, use your calculated cost-per-mile figure multiplied by your typical round-trip distance as a sanity check against what you currently charge — not necessarily as the charge itself, since callout pricing also needs to reflect your time, not just vehicle cost. A common mistake is setting a callout fee based on a years-old mental estimate of fuel cost alone, which under-recovers the much larger finance/depreciation and insurance components identified above.

Reviewing the calculation annually, not just at vehicle purchase

Fuel prices, insurance premiums, and finance costs all move over time, and a cost-per-mile figure calculated when a van was purchased can be significantly out of date two or three years later — particularly if insurance has risen after a claim, or if the van has moved from the manufacturer warranty period into a higher-maintenance-cost phase. Re-run this calculation at least annually, ideally at the same time you review your overall pricing.

Frequently Asked Questions

Should I charge customers a separate mileage fee, or build travel cost into my day rate?

Either approach can work, but whichever you choose, make sure the real cost (calculated as above) is actually covered somewhere in your pricing. A flat day rate that doesn't vary with distance implicitly assumes an "average" travel cost across all jobs — fine if your job locations are genuinely similar in distance, risky if you sometimes travel much further for less profitable work without charging for it.

Why is my actual cost per mile so much higher than the HMRC AMAP rate?

This usually means your finance/depreciation or insurance costs are high relative to your mileage — a relatively new, high-value van on finance, driven a modest number of miles per year, will often cost well above AMAP per mile, because the fixed costs (finance, insurance, road tax) are spread over fewer miles. A higher-mileage, older or lower-value van tends to sit closer to or below AMAP rates, since fixed costs are spread over more miles even though fuel/maintenance cost is higher in total.

Does leasing a van instead of buying change this calculation much?

Not fundamentally — a lease payment simply replaces the finance/depreciation line with a fixed monthly cost, which you calculate the same way. The comparison is still worth doing explicitly, since lease agreements sometimes bundle maintenance (reducing the separate maintenance line) or have mileage caps with excess-mileage charges that should be factored in if you regularly exceed the agreed annual mileage.

Do electric vans change this calculation significantly?

Yes, meaningfully — electricity cost per mile is typically much lower than diesel fuel cost per mile, and servicing costs are often lower (fewer moving parts, no exhaust/emissions system), but finance/depreciation costs are often higher for an electric van's higher purchase price, and public charging (versus home charging) can be expensive enough to significantly narrow or eliminate the running-cost advantage depending on charging pattern. Run the full calculation specifically for an electric van rather than assuming savings — see electric van for tradespeople for the fuller comparison.

Regulations & Standards

• HMRC Approved Mileage Allowance Payments (AMAP) — statutory simplified mileage rate scheme; rate reviewed periodically, currently 55p/25p (from 6 April 2026)

• Income Tax (Earnings and Pensions) Act 2003 — statutory basis for mileage allowance relief

• Vehicle Excise Duty (VED) — Finance Act provisions governing road tax rates by vehicle weight/emissions class

• GOV.UK — Mileage Allowance Payments and Approved Mileage Allowance Payment rates — official current AMAP rates and rules

• GOV.UK — Simplified expenses if you're self-employed — official guidance on choosing AMAP vs actual-cost tracking

• GOV.UK — Vehicle tax rate tables — current VED rates by vehicle class

• electric van for tradespeople — electric vs diesel van running cost comparison and grant availability

• expenses allowable self employed trades — what vehicle costs are tax-deductible for self-employed traders

• pricing labour — general pricing methodology this calculator's output feeds into

• self employment tax — broader self-employed tax treatment of vehicle and travel costs