Guide
A second van costs more than most contractors think once you add it all up. Here's how to work out exactly how many extra jobs it needs to generate, and how to check that number against reality before you sign anything.
Most contractors size up a second van by the monthly payment alone. That's the wrong number. The van payment is maybe half of what a second vehicle actually costs you in a year. Insurance, fuel, maintenance and the stock you have to put in it before it can earn anything all add up fast, and none of that shows up on the finance quote.
Before you talk to a lender or a driver, work out the full annual cost of running van two. Then work out how many extra jobs that van has to produce just to break even. Then check that number against jobs you've actually turned down, not jobs you hope will show up.
Here's a realistic build-up for a work van added to a small service business, not a luxury fit-out:
| Cost item | Typical annual range | Notes |
|---|---|---|
| Loan payment or depreciation | $4,800 - $7,200 | Used cargo van financed over 4-5 years, or the depreciation hit if paid cash |
| Commercial insurance | $1,800 - $3,500 | Depends on driver age, claims history, and what's carried in the van |
| Fuel | $2,000 - $4,000 | Based on real route miles, not the 12,000-mile default. Local trade routes often run 15,000-25,000 miles a year |
| Maintenance and tyres | $800 - $1,500 | Higher in year one of ownership if buying used |
| Initial stock and tools | $1,000 - $3,000 one-off | Ladders, fittings, a duplicate set of core tools so the crew isn't sharing |
Add those up and you land at roughly $9,000 to $16,000 a year, before you've paid a single hour of the person driving it. That's the number most quotes leave out.
If you already track job numbers on the job profitability calculator, pull your average gross profit per job from there rather than guessing it. That figure drives everything below.
The formula is simple:
Break-even jobs per year = Annual van cost ÷ Gross profit per job
Gross profit per job means revenue minus materials and direct labour for that job, not revenue alone. If you're not sure what your real gross profit per job looks like once labour and materials are stripped out, that's exactly what the calculator above is for.
Take a mid-range HVAC or plumbing outfit. Annual van cost comes to $14,000 once financing, insurance, fuel and a stock top-up are counted. Average gross profit per job, after materials and the tech's labour, is $190.
$14,000 ÷ $190 = 73.7 jobs, call it 74.
Spread over a working year of roughly 48-50 weeks, that's about 1.5 extra jobs a week that the second van and its driver need to bring in, on top of what your current crew is already doing, just to cover the van's own cost. Everything above that is what actually improves your profit.
Change either input and the number moves a lot. Drop gross profit per job to $130 (common in cleaning or smaller handyman jobs) and you need 108 jobs a year, over 2 a week. Push it to $260 on higher-ticket electrical or HVAC work and you're down to 54 jobs, just over 1 a week. Run your own numbers through the break-even calculator before you commit to a figure.
The maths above tells you what the van needs to do. It says nothing about whether that demand exists. This is where most second-van decisions go wrong: the owner does the calculation, gets a plausible-looking number, and assumes the jobs will turn up because the number "works".
Before buying, count only demand you can actually point to:
If that list adds up to fewer than your break-even number for a full year, the van is a bet on future growth, not a response to current backlog. That's not automatically wrong, but it's a different decision, and you should know which one you're making.
Backlog first, van second. Buy the van because you already have more confirmed work than one crew can handle, not because you think a second van will generate the work to fill it. A van sitting half-empty still costs the full $9,000-$16,000 a year. A backlog with no van just means slower delivery, which is a cheaper problem to have while you sort out financing.
If the backlog is real but you're not confident it's permanent, there's a middle step. Pay a subcontractor who runs their own vehicle to cover the overflow. You lose some margin per job compared to running it in-house, but you carry none of the fixed costs above; no loan, no second insurance policy, no van sitting idle in a slow month.
This works well as a 3-6 month test. If the sub is consistently busy on your overflow work and turning down other jobs to take yours, that's a strong signal the demand is durable enough to justify buying. If the work is patchy, you've avoided locking in $9,000-$16,000 of fixed cost for a demand pattern that doesn't support it. Compare the ongoing cost of hiring against ownership on the hire cost comparison before deciding either way.
A second van can be one of the best moves a growing contractor makes. It can also be the thing that quietly eats your margin for two years while you wait for demand to catch up. The difference isn't luck. It's whether you ran the numbers before you ran the ad for a driver.
The Small Business Operations Kit ($19) turns guides like this one into fill-in-once worksheets: rate card, quoting sheet, job costing, payment terms and follow-up templates.