What It Actually Costs to Run a Van in Ireland

Ask a small operator what their van costs to run and you will usually get a fuel figure. Ask what it cost last year, all in, and the answer is a shrug. That gap matters, because every quote you give is priced off an assumption about running costs, and if the assumption is low you are buying work at a loss without knowing it.

Here is how to build a number you can actually quote from.

The costs that are easy to see

These are the ones that arrive as invoices, so they tend to get captured:

• Fuel or electricity, by far the largest variable cost
• Motor tax, an annual or six-monthly fixed cost that varies enormously by tax class
• Insurance, fixed per vehicle per year
• CVRT testing, an annual fixed cost once a commercial vehicle is a year old
• Scheduled servicing, roughly predictable from the manufacturer's interval

Add these up and divide by the kilometres covered, and you get a number. It will be too low, usually by a wide margin.

The costs that quietly get left out

• Tyres. A set on a working van is a four figure cost that arrives every couple of years, and rarely gets attributed to the vehicle that wore them out
• Unscheduled repairs. Clutches, injectors, DPFs, batteries and bodywork. These are not rare events across a fleet, they are a running average
• Depreciation. The single largest cost on a newer van and the one almost nobody counts, because no invoice ever arrives for it
• Downtime. A van off the road for two days is two days of work not done, plus whatever the replacement cost
• Cleaning, tolls, parking, and the driver's time spent on any of the above

Depreciation is the one worth dwelling on. A van bought at 30,000 euro and sold five years later at 9,000 euro cost 21,000 euro to own, which is over 4,000 euro a year before a wheel turned. If your cost per kilometre does not include that, it is not a cost per kilometre.

Building the number

1. Pick a period, ideally a full twelve months, so seasonal work and an annual test are both inside it
2. Total the fixed costs for that period: tax, insurance, testing, finance or lease payments
3. Total the variable costs: fuel, servicing, tyres, repairs
4. Add depreciation for the period, estimated as the fall in the vehicle's value across those twelve months
5. Divide the total by the kilometres the vehicle actually covered in the period

What comes out is a cost per kilometre for that vehicle. Do it per vehicle rather than as a fleet average, because the averages hide the problem: it is almost always one or two vehicles carrying the repair bill for the whole fleet.

What to do with it

• Quote from it. If you are pricing jobs on a figure you last checked three years ago, diesel prices alone have moved it
• Compare vehicles honestly. The cheap old van with no finance payment often loses to the newer one once repairs and downtime are counted
• Time your replacements. There is a point where annual repair cost crosses what the same money would cover in payments on a newer vehicle. You can only see that crossing point if you have the history
• Check the outliers. A vehicle running well above the fleet's cost per kilometre is telling you something, whether that is a mechanical problem, a driving style, or a route

Why the odometer is the whole exercise

Every figure above is divided by distance covered. If the mileage is a guess, the cost per kilometre is a guess, and so is every decision you make from it. This is the least glamorous piece of fleet admin and the one that makes the rest of it possible.

Keeping the history in one place

FleetMain keeps a service history per vehicle with the cost and the odometer reading at the time of each job, so the repair and servicing spend builds up against the vehicle that incurred it rather than disappearing into a folder of receipts. Vehicles also carry a value field for asset tracking, and mileage updates can be prompted on a schedule you choose, weekly, monthly or every two months, so the readings behind your cost per kilometre stay current.

The Reports page totals service spend across the fleet, so you can see which vehicles are earning their place and which are quietly costing you the price of a replacement.

This article is a general guide to costing commercial vehicles, not tax or accounting advice. Treatment of depreciation, capital allowances and deductible motoring expenses should be confirmed with your accountant and with Revenue.