THE GREAT RATE DEBATE - MATE

The true cost of running a small van as an owner driver.

What rate should you charge? You decide.

I entered the expenses below in one of the many vehicle running cost calculators found on the web. Note: because these calculators are to determine vehicle running cost and not business expense costs I grouped and entered expenses such as phone, postage , miscellaneous expenses and subscription fees etc in to the repairs and maintenance box on the site.

The figures assume you are VAT registered and I believe they are typical although not exact for most.

VEHICLE COST: 7500

CHANGE VEHICLE: 2 years

RESALE VALUE: 2500

ANNUAL MILEAGE: 80,000

MILES PER GALLON: 53

FUEL PRICE PER LITRE: 1.17

ROAD FUND LICENSE: 200

VEHICLE SERVICE COSTS: 1800

VEHICLE INSURANCE: 1800

GIT AND PL INSURANCE: 230

PRINTING, STATIONARY, POSTAGE, PHONE, ACCOUNTANTS, SUBSCRIPTION FEES, MACDONALDS

AND

MISCELLANEOUS EXPENSES: 1900

RESULT:

Five days a week , 80,000 miles a year in your van.

Will cost £312 a week . £62 a day or 20p a mile.

Example: If your sales are £600 in a week your pre tax profit would be £290. Example: If your sales are £900 in a week your pre tax profit would be £588

200 mile round trip @ 30p mile = £60 cost 20p per mile £40.00 profit before tax £20

200 mile round trip @ 32.5 mile = £65 cost 20p per mile £40.00 profit before tax £25

200 mile round trip @ 35p mile = £70 cost 20p per mile £40.00 profit before tax £30

200 mile round trip @ 37.5 mile = £75 cost 20p per mile £40.00 profit before tax £35

Keeping the vehicle for 4 years with a resale value of £1500 based on 80,000

Will cost £232 a week

£58 a day or 19p a mile

The vehicle service costs would probably rise due to the high mileage 320,000 Should you do say 120,000 miles a year the cost per mile reduces but the daily cost increases due to the extra fuel used.

Conclusion: It doesn't matter how much you charge those cost will always be there.

It's better to look at yearly figures rather than weekly as some weeks you might do £500 and some weeks you might do £1000 but one thing is certain the cost per mile will always exist.

All the above is based on single dedicated deliveries and doesn't include back loads or co loading. Anybody that becomes an owner driver and assumes he or she will get back loads is living dangerously.

With regards to tax I would have thought it's a good idea to look at the business mileage rate scheme rather than the conventional P&L system.

Source www.carplus.org.uk

Regards

Paul

If you were doing a business plan I would say it is optimistic to assume 5 days a week work and 80k miles.

My experience is of 2 years and 50k and 60k per year. I worked out from sat nav log that I averaged 37 mph and when loading, unloading, waiting were taken into account it was closer to 30mph average speed. Ok I do a fair (too much) amount of London work but to do 80k miles it would take 52 hours every week.

Obviously if you spend more time on a motorway it is easier to clock up the miles.

AM - PM

I see your point. When I started as an owner driver in 1985, yes 1985. I worked for a company called Yellow Express in Harrow who later went on to become Business Post, god knows who they are now.

We were radio controlled and used to park up in Wealdstone every morning at 8am, then you'd get the call on the radio. 972, 972. You want IBM Harrow picking up job for EC1, call me POB.

Then used to spend all day in London doing jobs W1 to W2 etc. Hardly clocked up any mileage but front brake discs and pads, use to wear out like no tomorrow.

When you get away from London into the Midlands and beyond most jobs tend to be mileage and I'm sure that up this part of the country 80k is reasonable mileage. I met a guy the other day in Nottingham who'd done 180K in one year.

I see you are in Chinnor and I guess because of its close proximity to London, that's probably where most local business in your area have customers.

Sorry but I think what the guy in Nottingham told you was bollocks!

Think about it

If one travelled for example from London to Warsaw in Poland the mileage would be in the region if 2000. If that was done EVERY week of the year the mileage would be 104k.

I defy anyone to do that journey more than once a week. I have done it a few times and even though there are now no border restrictions it is getting on for 4 days, if you catch a few hours sleep. Ok if someone else drove it as well, maybe slightly more would be achievable.

I'd agree with you Rapid, it probably was bull.

RAPID LIGHT TRANSPORT LTD. said:

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Sorry but I think what the guy in Nottingham told you was bollocks!

Think about it

If one travelled for example from London to Warsaw in Poland the mileage would be in the region if 2000. If that was done EVERY week of the year the mileage would be 104k.

I defy anyone to do that journey more than once a week. I have done it a few times and even though there are now no border restrictions it is getting on for 4 days, if you catch a few hours sleep. Ok if someone else drove it as well, maybe slightly more would be achievable.

He could of been an astronaut

180K a year would be the equivalent of a run from Bedford to Glasgow & return everyday 5 days a week for 50 weeks of the year. 12 hours non stop daily.

I currently have a run that equates to 160K a year, but its only for 4 weeks, one person cant do it!

Anyway. I think the 180k thing has now been discredited and put to bed.

I'd be interested to hear members views on whether they agree with the running costs of around 19 - 20p a mile for a small van.

MK BIKES said:

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180K a year would be the equivalent of a run from Bedford to Glasgow & return everyday 5 days a week for 50 weeks of the year. 12 hours non stop daily.

I currently have a run that equates to 160K a year, but its only for 4 weeks, one person cant do it!

I guarantee you would not want to do that on your own for 50 weeks!

RAPID LIGHT TRANSPORT LTD. said:

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MK BIKES said:

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180K a year would be the equivalent of a run from Bedford to Glasgow & return everyday 5 days a week for 50 weeks of the year. 12 hours non stop daily.

I currently have a run that equates to 160K a year, but its only for 4 weeks, one person cant do it!

I guarantee you would not want to do that on your own for 50 weeks!

I know I don't even think you can do it the week, its mind nummingly boring same route every day

Coalville Courier said:

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Anyway. I think the 180k thing has now been discredited and put to bed.

I'd be interested to hear members views on whether they agree with the running costs of around 19 - 20p a mile for a small van.

My combo works out at 25p /mile over 110k

Your legally allowed to do 10 or 11 hrs a day

80 thou a year means 320 or so a day 5 days a week, return miles means 640 a day

Your simply not going to manage 60-64 miles par hour on the uk`s roads, mix in pee breaks, loading and unloading ,breakdowns, servicing, maccys stops and you will need to near double this speed to 120-130 mph over this 10-11 hour time frame and thats assuming the jobs there first thing every day, not likely so it must impact the hours instead So 640 dragged over a day assuming its not the same run day in day out your looking at 14 hrs mini but more likely 16 hours so your already breaking the law and thats without the same fuel stops, handaball, pee stops dragging it out another couple of hours

180K only in a plane so lets ignore that

50 is possible to do but tends to be 16 hr days

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So the price has to reflect this, it is possible to happly chug along at 60pplm but your going to go broke, you need at some point those better paid job or regular well rewarded runs

A E Delivery said:

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Your legally allowed to do 10 or 11 hrs a day

80 thou a year means 320 or so a day 5 days a week, return miles means 640 a day

Your simply not going to manage 60-64 miles par hour on the uk`s roads, mix in pee breaks, loading and unloading ,breakdowns, servicing, maccys stops and you will need to near double this speed to 120-130 mph over this 10-11 hour time frame and thats assuming the jobs there first thing every day, not likely so it must impact the hours instead So 640 dragged over a day assuming its not the same run day in day out your looking at 14 hrs mini but more likely 16 hours so your already breaking the law and thats without the same fuel stops, handaball, pee stops dragging it out another couple of hours

180K only in a plane so lets ignore that

50 is possible to do but tends to be 16 hr days

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So the price has to reflect this, it is possible to happly chug along at 60pplm but your going to go broke, you need at some point those better paid job or regular well rewarded runs

You mention the word chug, have you got a Ford Connect?

A E Delivery,

80 thousand miles is the total miles covered in the vehicle per year over a 5 day week. 253 working days per year. 80k divided by 253 working days a week = 316 miles per day. 316 is the total miles the van has covered.

My van, which was brand new on the 17th September 2013 has now done 36k. So, that's roughly, five months. (including Jan and Feb this year which have been quiet.)

One assumes that the next 5 months I will do another 36K. So that's 72K and still leaving 2 months.

Shall we be generous and say I will only do 4k in the other 2 months giving a total of 76k. I know for a fact that it will cost me 20p a mile to run my van this year even before I bought it, because I worked it out beforehand.

That equates to £15,200 before I make a profit. My sales/turnover this year based on the above is £30,200, projected net profit is 15,000.

Take home pay after tax and NI: £13,091 = £251 per week.

WE NEED TO CHARGE MORE FOR OUR SERVICES OR THE COME AND GO OWNER DRIVER WILL CONTINUE.

WE NEED TO CHARGE MORE FOR OUR SERVICES OR THE COME AND GO OWNER DRIVER WILL CONTINUE.

So true, the odd one or two are willing to pay a FAIR rate but like all things these days its all about cheap.

Margret Thatcher would have called it competition driving prices down, I was no fan of Thatcher. I am also no fan of 55pplm... You know who you are.

There will always be those that expect people to do stuff for nothing, and there will always be those that take work on that doesn't pay.

There are also those whose Business Model depends on the naive, the newbies, and the uninsured who feel they have to cut corners to survive.

To those I say you have no Business, if it depends on taking advantage of others.

There comes a time when every Business finds its own level re pricing, and sometimes that means the service on offer can no longer be achieved... I. E its gone too cheap

In other industries it means the boots you bought for £20 fall apart after 2 weeks, the meat pie is full of gristle and little meat, and that cheap holiday villa is on a building site.

DOES THIS COVER IT?

If you only ever drive vehicles that are under 3,500kg GVW there is no legal requirement to keep records of your working or driving hours.

You can drive for up to 10 hours per day, breaks aren’t included in the 10 hours, nor is loading and unloading or waiting time with the engine switched off. You can ‘work’ for up to 11 hours per day, breaks aren’t included but all other work is included (unless you’re self-employed when some work doesn’t count). The ‘day’ lasts for 24 hours from the time you start work. So if you start at 10.00am today and work for 11 hours then you can’t do any more work until 10.00am tomorrow. There are no record keeping requirements for drivers of vans under 3,500kg. There is a requirement under the Working Time Directive and Health & Safety laws for drivers to have adequate rest.strong text

Bedford to Glasgow five times would be a slack week at UK Express/Nighttrunkers. I think some guys there might even be getting on for 200,000 miles a year No I am not making this up. I know a guy who drives Coventry/ Inverness / Coventry straight through.

Nightrider said:

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Bedford to Glasgow five times would be a slack week at UK Express/Nighttrunkers. I think some guys there might even be getting on for 200,000 miles a year No I am not making this up. I know a guy who drives Coventry/ Inverness / Coventry straight through.

You can cover silly milleages when your young, when you get an old fart like me you like to take things a little easier, I once did 8, 000 miles in a fortnight in my fiat I wanted it to break down so I could have a day off, funny enough it didn't.

I always thought FIAT stood for Fix It Again Tomorrow. Possibly not

GeeGee vans said:

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I always thought FIAT stood for Fix It Again Tomorrow. Possibly not

I have owned 2 fiats both where new agrande punto van and a doblo, I can honestly they say they where the comfiest vans I have ever owned, but it stops there, I had so many sleepless nights I got rid.