When it comes to choosing a vehicle for your business or personal use, the decision between a van and a car can be a tough one. While both serve the purpose of transportation, there are significant differences in their running costs that can impact your budget. In this article, we’ll delve into the various factors that influence the overall expenses associated with owning and operating a van or a car, helping you make an informed decision based on your specific needs and financial considerations. We’ll also explore the topic of using work vans for personal use and discuss the cheapest vans to insure.
Purchase Price: Vans vs Cars
One of the first aspects to consider when comparing the running costs of vans and cars is the initial purchase price. On average, vans tend to be more expensive than cars, with prices starting from around £18,000 for a basic, smaller model like a Ford Transit Courier or Renault Kangoo. Larger panel vans can cost upwards of £25,000 when bought new, with high-end models reaching up to £50,000.
In contrast, small hatchback cars can be purchased new for as little as £12,000, making them a more affordable option for those with a limited budget. However, it’s essential to consider your specific requirements, as a car may not always be suitable for your business needs, especially if you require ample cargo space or the ability to transport heavy goods.
Insurance Costs: Commercial Van Insurance vs Car Insurance
Another significant factor that contributes to the running costs of cars and vans is insurance. Commercial van insurance tends to be more expensive than car insurance, with annual premiums ranging from £1,100 to over £2,000, depending on factors such as the size and type of van, its intended use, and the driver’s personal circumstances, including age, driving history, and location.
By opting for a telematics-based policy, which monitors driving behaviour through a small device installed in the van, you could potentially save money on your premiums by demonstrating safe and responsible driving habits. This can be particularly beneficial for those seeking cheaper van insurance.
Car insurance, on the other hand, is generally less expensive than commercial van insurance, as cars are typically smaller, less powerful, and fall into a wider range of insurance groups. However, if you plan to use your car for business purposes, such as making deliveries or attending work-related events, you may need to obtain additional coverage, which can increase your insurance costs.
When considering the cheapest vans to insure, it’s essential to look at factors such as the van’s size, engine power, and safety features. Smaller vans with lower engine capacity and better safety ratings often fall into lower insurance groups, resulting in more affordable premiums.
Fuel Efficiency and Costs
Fuel costs are a substantial ongoing expense for both van and car owners. Due to their larger size and weight, vans generally consume more fuel than cars, resulting in higher running costs. Petrol vans typically achieve around 30-40 miles per gallon (mpg), while diesel vans can range from 30 mpg to over 55 mpg, depending on the model and driving conditions.
In comparison, petrol cars often achieve between 40-55 mpg, with diesel cars reaching 50-65+ mpg. To minimise fuel costs, it’s crucial to consider the type of journeys you’ll be making and choose a vehicle with good fuel economy that suits your needs.
Tax and MOT Expenses
When it comes to taxation, vans and cars are subject to different rates. Vans are taxed at a flat rate, with the current Vehicle Excise Duty (VED) for the 2023/24 tax year being £320 for 12 months or £176 for six months. In contrast, car tax varies based on the vehicle’s CO2 emissions, with prices ranging from around £150 to over £500 per year.
MOT test fees are the same for both cars and vans weighing under 3,000kg, with the standard rate currently set at £54.85. However, keep in mind that vans may incur higher costs for repairs and replacements due to their larger size and the potential for more wear and tear, especially if used for commercial purposes.
Maintenance and Servicing
While servicing costs for vans and cars are relatively similar, there are some differences to consider. Vans that carry heavy loads and cover large distances may experience faster tyre wear, resulting in more frequent replacements. Additionally, MOT repairs for vans can be more expensive if heavy-duty parts are needed, although labour costs are generally comparable to those of cars.
To keep your vehicle in good condition and avoid unexpected repair costs, it’s essential to follow the manufacturer’s recommended servicing schedule and address any issues promptly.
Using Work Vans for Personal Use
If you’re considering using a work van for personal use, it’s crucial to understand the implications on insurance and taxation. While it is generally allowed to use a work van for personal journeys, you may need to inform your insurer and obtain the appropriate level of coverage. Additionally, using a work van for personal use may result in a Benefit-in-Kind (BiK) tax, which is calculated based on factors such as the van’s CO2 emissions, fuel type, and the extent of personal use.
When deciding between a van and a car for your business or personal use, it’s crucial to consider the various factors that contribute to their running costs. While vans offer greater cargo capacity and versatility, they tend to be more expensive to purchase, insure, and fuel compared to cars. However, for businesses that require the transportation of goods or equipment, a van may prove to be more cost-effective in the long run.
To make an informed decision, assess your specific needs and budget, and compare the costs associated with each option. Consider factors such as the initial purchase price, insurance premiums, fuel efficiency, tax obligations, and maintenance expenses. By carefully evaluating these aspects and seeking advice from professionals, such as Zego for commercial van insurance, you can choose the vehicle that best suits your requirements and minimizes your overall running costs.
Are vans more expensive to insure than cars?
Yes, commercial van insurance is typically more expensive than car insurance due to factors such as the van’s size, weight, and intended use. Insurance premiums for vans can range from £1,100 to over £2,000 per year, while car insurance is generally less costly.
How do fuel costs compare between vans and cars?
Vans generally consume more fuel than cars due to their larger size and weight. Petrol vans typically achieve around 30-40 mpg, while diesel vans can range from 30 mpg to over 55 mpg. In contrast, petrol cars often reach 40-55 mpg, and diesel cars can achieve 50-65+ mpg.
Are there differences in tax rates for vans and cars?
Yes, vans are subject to a flat rate of Vehicle Excise Duty (VED), which is £320 for 12 months or £176 for six months in the 2023/24 tax year. Car tax, however, varies based on the vehicle’s CO2 emissions, with prices ranging from around £150 to over £500 annually.
Do vans and cars have the same MOT test fees?
Yes, the standard MOT test fee is the same for both cars and vans weighing under 3,000kg, currently set at £54.85. However, vans may incur higher repair costs due to their size and potential for increased wear and tear.
How can I save money on commercial van insurance?
To save on costs of van insurance for business, consider opting for a telematics-based policy from providers like Zego. By installing a small device that monitors your driving behaviour, you can demonstrate safe and responsible habits, potentially leading to lower premiums. Additionally, compare quotes from multiple insurers and choose a van with good safety features and a lower insurance group rating.
Article written by Thomas Mark at Tmr Digital
