Diesel at a record: should you finance an electric van now?
Electric van finance after the diesel record: the grant the dealer takes off the price, hire purchase or lease, charging at your depot, and when to wait.
Reading time5 min read
CategoryBusiness guides
Written byThe bizbritain team
According to the RAC, diesel hit a record 199.18p a litre on 28 September. If your van is due for replacement, electric van finance is now worth pricing properly. A new electric van comes with up to £5,000 off at the dealer. What matters is whether the monthly payment beats the fuel you would save, on your own routes.
This guide works through the sums for one van, how the grant is applied, hire purchase or lease, charging at your depot, and when it makes sense to wait.
Section 01
What does one diesel van cost to fuel now?
The RAC's figure is an average across UK forecourts. The previous high was 199.09p, in June 2022.
Take one van covering 20,000 miles a year at 35 miles per gallon. That is about 2,600 litres of diesel a year. At 199.18p, it now costs about £5,170 a year to fuel.
In August, at 183.4p a litre, the same van cost about £410 a year less. This is an illustration, not a forecast. Put your own mileage into the sum.
An electric van swaps that bill for electricity. What it costs depends on your tariff and where you charge. Ask your energy supplier for the rate before you compare.
Section 02
How the electric van grant works
The government's plug-in van grant is a discount, not a payment to you. The dealer takes it off the price when you buy. There is no paperwork for you to fill in.
It only applies to new vans at first registration. Small vans under 2,500kg can get up to £2,500 off. Larger vans between 2,500kg and 4,250kg can get up to £5,000 off.
Not every model qualifies, and the number of grants is limited. Ask the dealer whether the van you want is on the list, and what the price is after the grant.
A lower price means less to borrow. So the grant cuts your monthly payment as well as the price.
Section 03
Electric van finance: is hire purchase or a lease worth it?
Both spread the cost, but they work differently.
With hire purchase, you pay a deposit and monthly instalments, and the van is yours at the end. With a lease, you pay to use the van and hand it back. Our guide to hire purchase and leasing explains the difference in full.
Before you sign either, put the two vans side by side.
The monthly payment
Compare it after the grant has come off the price.
The fuel you would save
Use your own mileage and your own electricity rate, not an average.
Range against your routes
Check the van covers your longest regular day without a stop.
Payload
Check it can still carry your tools and stock once the battery weight is counted.
Where you will charge
Charging at home, at your depot or in public changes the running cost.
Section 04
Charging at your depot
If you run vans from a yard or unit, a charger there is often the cheapest way to charge.
The government's Depot Charging Scheme can cover up to 70% of the cost of installing chargers for vans and lorries, up to £1m. It opens in application windows, so check whether one is open before you plan around it.
A charger is equipment, so it can often be funded on its own terms rather than from your cash.
Section 05
When does it make sense to wait?
If your diesel van has years of life left and runs well, you do not have to switch now. A newer van is only worth it when the numbers work.
The Budget is on 28 October. The RAC warns that pump prices will rise by about 5p a litre by the spring if the current cut in fuel duty is fully reversed as planned. Knowing what the Budget says will firm up your sums.
If a van is due for replacement anyway, price both options now. A broker can look at the deal across a wider range of lenders. We can help you compare business growth finance for a van, a charger or both.
This guide is general information, not financial advice. Applications are subject to status, affordability and lender criteria.
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