The Real Cost of Running a Service Van (Fuel, Tools, Insurance, Wear)

Your service van is one of the most expensive assets in your business, and most contractors don't know what it actually costs to operate. They know the monthly truck payment. They notice when they fill the tank. But the full number, fuel plus insurance plus maintenance plus depreciation plus tools, rarely gets calculated.

That number matters because it belongs in your overhead. If you're not pricing the cost of running a service van into your jobs, you're charging less than your work actually costs.

This post breaks down the real cost of running a service van in 2026, category by category, so you can see the full picture and know what to track.

Why Most Contractors Underestimate Van Costs

The payment on a new van is easy to see. Everything else is scattered: fuel receipts, insurance auto-pay, the tire rotation in March, the brake job in October, the toolbox you bought to organize the back.

According to 2025 fleet cost benchmarks from Easitrack, the median total cost of ownership for a service fleet vehicle runs about $9,584 per year. That figure covers fuel, maintenance, insurance, and depreciation but often doesn't include the tools, parts inventory, and equipment a trade contractor carries.

For a well-equipped trade van, the real all-in number sits higher, often $15,000 to $25,000 per year when you add specialty tooling and inventory.

The IRS uses 72.5 cents per mile as its 2026 standard mileage rate, an estimate that accounts for fuel, maintenance, insurance, and depreciation on a typical business vehicle. If you're driving 15,000 business miles a year, that's $10,875 in recognized operating cost before your cargo and tooling.

Fuel

Fuel is the most visible line item. A full-size cargo van gets 14 to 18 miles per gallon in mixed city/highway driving. At $3.50 per gallon and 15,000 business miles per year at 16 mpg, you're buying roughly 940 gallons. That's about $3,290 per year in fuel.

Factors that move that number:

• Drive patterns: Stop-and-go city driving is harder on mileage than highway runs
• Vehicle load: A heavily loaded van burns more fuel per mile than a lightly loaded one
• Maintenance: Under-inflated tires and a dirty air filter reduce fuel economy noticeably
• Route efficiency: Unplanned backtracking and wasted trips add miles and cost

Route planning in Bit & Grain helps you sequence jobs and stops to minimize total drive distance. Even saving 5 miles of driving per day across 250 working days is 1,250 fewer miles per year, worth about $219 in fuel and $906 in IRS deduction value.

Insurance

Commercial auto insurance for a work van or truck runs $250 to $400 per month for most light-duty contractor vehicles in 2026, based on 2026 commercial auto cost data. That's $3,000 to $4,800 per year.

Your personal auto policy doesn't cover business use. If you're driving a van to job sites and billing clients, you need commercial coverage. This isn't optional and it's not expensive relative to the risk.

Factors that affect commercial auto cost:

• Vehicle type and value: A new cargo van costs more to insure than an older pickup
• Driver history: Tickets and at-fault accidents increase premiums
• Multi-vehicle discount: If you add a second van, bundling on one policy often reduces the per-vehicle rate
• Coverage limits: Higher liability limits cost more; set them to match your actual exposure

Maintenance and Repairs

This category is the most unpredictable and the one contractors most often forget to budget for.

Routine maintenance for a work van includes oil changes every 5,000 to 7,500 miles, tire rotation every 10,000 miles, tire replacement every 40,000 to 60,000 miles (sooner if you're on rough sites), brake service, fluid changes, filters, and belts.

For a van running 15,000 business miles per year:

• Oil changes: 2 to 3 per year at $80 to $120 each, roughly $300
• Tires: One set of four every three to four years at $600 to $1,000 per set, annualized to $175 to $300 per year
• Brakes: Every two to three years at $300 to $500 per axle, annualized to $250 per year
• Other maintenance (filters, fluids, belts, wiper blades): $300 to $600 per year

Routine maintenance alone runs $1,000 to $1,500 per year for most vans in regular use. Non-routine repairs, things like a transmission, alternator, or air conditioning compressor, can be $1,000 to $4,000 per incident.

A realistic annual maintenance and repair budget for a work van is $2,000 to $3,500 in a normal year. Plan for a bad year every three to five years.

Depreciation

Depreciation is real money even though it doesn't come out of your bank account monthly.

A new full-size cargo van costs $35,000 to $55,000. Most vehicles depreciate about 15 to 20% in year one and roughly 10 to 15% per year after that. On a $45,000 van, year-one depreciation is about $7,000 to $9,000. By year five, that van is worth $18,000 to $25,000. You've lost $20,000 to $27,000 in value.

Spread over five years, that's $4,000 to $5,400 per year in depreciation cost. This is what you're consuming when you use the vehicle. It's why vehicle purchases belong in your long-term financial planning: when the van needs replacing, the cost to replace it is real.

Tools and Equipment

The contents of your van are often worth more than the van itself.

A fully equipped trade contractor van, with power tools, hand tools, organizational systems, ladders, specialized equipment, and parts inventory, can represent $15,000 to $50,000 in capital. This isn't a one-time cost; tools wear out, break, get stolen, and need replacing.

A reasonable annual budget for tool replacement and addition runs 10 to 15% of your total tool value per year. On $25,000 in tools, that's $2,500 to $3,750 per year.

The equipment tracking tools in Bit & Grain let you log your tools and equipment with purchase dates, costs, and assignment to specific jobs. That record serves two purposes: it supports depreciation and replacement planning, and it documents equipment for insurance and tax purposes.

Putting the Numbers Together

Here's a realistic annual operating cost breakdown for a well-equipped trade contractor van in 2026:

Divide that by your billable hours to get your per-hour van overhead. If you bill 1,500 hours per year, your van cost is $9.86 to $13.83 per billable hour. That number belongs in your pricing.

What This Means for Your Pricing

If your van costs $17,000 per year to operate and you bill 1,500 hours, the van is costing you $11.33 per hour of work. That's overhead you need to recover in your rate.

Most contractors have a rough sense of material and labor costs but undercount overhead. Vehicle costs are often the biggest gap. A shop running two vans at $17,000 each is carrying $34,000 per year in vehicle overhead alone.

When you do a full overhead calculation (vehicle plus insurance plus shop space plus software plus tools plus admin), and you divide by your billable hours, you get your break-even rate per hour. Charge less than that and you're losing money. Charge more and you're building a business.

The Hidden Costs: Permits, Tolls, and Parking

Fleet data and IRS rates capture the big categories, but small costs add up too. Across a year, these tend to be invisible unless you're tracking them:

Tolls: A contractor running regular routes through toll corridors might pay $20 to $50 per week in tolls. At $35 per week times 50 working weeks, that's $1,750 per year, fully deductible as a business travel expense.

Parking: Job site parking fees, client location parking, supply house lots that charge. $10 to $20 per week isn't unusual. $750 per year, deductible.

Inspection and registration: Annual commercial vehicle registration fees, DOT inspections where required, weight or emissions testing. $200 to $500 per year depending on state and vehicle type.

Permits and oversize loads: For contractors hauling equipment or materials, occasional permit fees are real costs.

None of these are large individually. Together, they add $2,500 to $4,000 per year to your total van operating cost, and they're all deductible. Contractors who track them claim them. Those who don't just eat the cost.

Planning for Replacement

Your van won't last forever. A work van that's well-maintained might run 200,000 to 250,000 miles before major systems start failing. At 15,000 business miles per year, that's 13 to 16 years of service. But "last forever" and "cost-effective to operate" diverge around 100,000 to 150,000 miles, when maintenance costs start climbing.

Smart van economics means setting aside a replacement fund. If your current van is worth $25,000 today and you plan to replace it in five years with a van that costs $45,000, you need to save $4,000 per year above depreciation to bridge the gap.

Most contractors don't do this. The van payment ends. The "extra" cash flow doesn't get allocated. Then the van needs replacing and there's no reserve.

Building a van replacement line into your overhead calculation, even a small one ($100 to $200 per month into a dedicated account), turns an irregular large expense into a predictable small one.

The Tax Angle

Every dollar in your van cost breakdown is potentially deductible.

Fuel is deductible as an actual expense or captured through the standard mileage rate. Maintenance and repairs are deductible. Insurance premiums are deductible. Tools and equipment are deductible, often fully in the year of purchase under Section 179.

You can either track actual expenses or use the standard mileage rate (72.5 cents per mile for 2026). The mileage rate is simpler. The actual expense method is sometimes better for high-cost vehicles. You need to choose in the first year you use the vehicle for business and cannot switch freely.

The mileage tracking feature in Bit & Grain makes it easy to log business miles and keep the documentation the IRS requires. The Grain AI assistant can help you review your vehicle costs, categorize them, and flag what belongs on your Schedule C at tax time.

How Bit & Grain Helps

Your van is a profit center or a cost center depending on how you manage it. The tools in Bit & Grain give you visibility into the real operational data:

• Mileage tracking captures every business mile automatically, connected to specific jobs, so you have clean IRS-ready records and a real picture of your drive cost per job
• Equipment tracking keeps a record of tools and equipment with purchase costs and job assignments, supporting both insurance documentation and depreciation planning
• Grain AI helps you analyze job-level costs, identify which jobs are profitable, and surface patterns in your vehicle and equipment spend

At $29/month, the software costs about a dollar a day. The van costs $40 to $57 per day just to operate. Knowing what that $40 to $57 actually looks like in your job economics is worth far more than the software cost.

The Bottom Line

The real cost of running a service van is $15,000 to $21,000 per year for a typical trade contractor operation, once you count fuel, insurance, maintenance, depreciation, and tools. Most contractors only think about the truck payment and the gas station.

That full number belongs in your overhead calculation and in your pricing. A contractor who doesn't account for van costs in their rate is subsidizing their clients without knowing it.

Track your fuel, log your miles, document your equipment, and budget for maintenance and depreciation. The van is doing work for your business. Make sure your pricing reflects what that work actually costs.