If your small business needs transport – whether its for deliveries or picking up supplies – you’ll have a choice to make. Do you buy your own van, or make use of man and van services?

Cost will inevitably be one of the main considerations, but you’ll also need to think about factors such as flexibility, convenience and control.

Here, we’ll take a look at the key costs involved with both options, to discover which could be the
most cost-effective for your business.

Option 1: Owning a van

Your first impulse may be to simply purchase your own company van. After all, this gives you complete control, along with the convenience of having a vehicle ready and waiting whenever you need it. It can also be branded with your logo, and driven by your own staff.

However, buying and running a company van can be a lot more expensive than you may think. You’ll have to shell out a large sum initially, and there are also ongoing fixed expenses – as well as legal and staffing responsibilities. These don’t disappear during quiet periods, so you could end up paying a lot for times when your new van is sat idle.

Option 2: Using man and van services for businesses (UK)

Another option to consider is making use of a man and van service on a regular basis. There are companies such as us here Kiwi Movers which offer dedicated and tailored services for businesses, whether it’s support for a one-off project or daily deliveries.

You might imagine that this kind of service is prohibitively expensive to use as more than just a one-off, but you might be surprised.

One of the main benefits is no upfront investment is required, and no long-term commitment either. Any costs flex with demand, so you’re not paying extra during quiet periods.

Van hire vs. ownership – the main costs compared

Owning a van

Let’s start with how much it costs to own a company van. There are a few different costs to look at, including:

Upfront purchase costs

You may pay anywhere between £15,000 and £40,000 to buy a new van. If you opt for financing, your monthly payments could be around £200 to £600 depending on the agreement, make and model. You should also consider depreciation, which can be around 20% to 35% especially in the first year.

Insurance

You can expect to pay between £600 and £2,000 a year to insure your new van

Fuel

It all depends on your mileage, but an average business could pay between £2,400 and £3,600 a year for fuel (based on 20,000 miles a year).

ULEZ and emissions charges

You’ll need to pay a flat rate of £345 a year in Vehicle Excise Duty (VED) for most vans. And if you’re based in London and your van isn’t compliant, you could be facing extra charges of £12.50 per day. Congestion charges may also apply.

Parking and fines

When you own your vehicle, you are solely responsible for parking charges, as well as paying fines and penalties. These may be small costs, but they can add up fast.

Maintenance, repairs, MOTs and servicing

Annual maintenance for a typical company van can reach £1,000 or even £2,000 a year, which includes costs relating to servicing, MOTs, tyres and unexpected repairs – as well as breakdown cover. You may also lose money while your vehicle is temporarily out of action.

Staffing and employment costs

If you have a company van, you’ll need someone to drive it. This means paying a salary, along with National Insurance and pension contributions, holiday and sick pay. There may also be training and additional insurance costs.

Using man and van services

If you make use of man and van services, you don’t need to pay any upfront costs. You also don’t need to pay for insurance, fuel, parking, ULEZ or emissions charges, maintenance or any staffing costs. It’s all included in the hourly or daily rate you’re quoted by the company you use.

But how much does it cost to use man and van for business services in the UK? It’s really important to get a quote tailored to your needs, but you could pay as little as £35-£50 per hour.

So which is the most cost-effective option?

If your business has scheduled deliveries all day, every day, it could be argued that owning a van is the more suitable option.

However, if your business only needs occasional deliveries, has quiet as well as peak periods, and needs flexibility – using a man and van service could be by far the most cost-effective option.

It doesn’t tie you into expensive ongoing costs, and there’s nothing to pay upfront. It’s a pay-as-you-go option that could suit the way your business works.

Find out more about our trusted commercial services here at Kiwi Movers.