Cargo Van Business Start Up Cost
The cost to start a cargo van business depends almost entirely on whether you already have a suitable van. If yes, total startup is under $5,000. If no, the vehicle dominates the budget. This article walks through three real budgets. It's part of the Cargo Van Business guide.
The three budgets
| Setup | Total | Who it's for |
|---|---|---|
| Lean (already own van) | $1,000 - $5,000 | Side hustle, testing, weekend work |
| Standard (buying used van) | $20,000 - $35,000 | Full-time intent, used van |
| Full commercial (newer van + upfit) | $35,000 - $60,000 | Established intent, professional setup |
Budget 1: Lean (Already Own Van) - $1,000 - $5,000
You already have a cargo van or a suitable pickup. You're starting the business around your existing vehicle.
| Line item | Low | High |
|---|---|---|
| LLC formation | $50 | $300 |
| EIN from IRS | $0 | $0 |
| Business bank account | $0 | $25 |
| General liability insurance (year 1) | $400 | $800 |
| Commercial auto insurance (year 1) | $0 | $2,500 |
| Vehicle inspection and minor maintenance | $200 | $500 |
| Hand truck, dollies, straps, blankets | $200 | $600 |
| Vehicle decals or basic signage | $50 | $300 |
| Business cards | $20 | $80 |
| Initial fuel float | $100 | $300 |
| Buffer | $200 | $500 |
| Total | $1,220 | $5,905 |
The commercial auto insurance line is the biggest variable. If your existing personal auto policy already allows business use (rare), you can stay on personal auto with a business endorsement. If not, you'll need a separate commercial auto policy, which is the larger number.
Budget 2: Standard (Buying Used Van) - $20,000 - $35,000
You're buying a used cargo van and starting the business around it.
| Line item | Low | High |
|---|---|---|
| Used cargo van (Ford Transit, RAM ProMaster, or similar, 2018-2021, 80-130K miles) | $15,000 | $25,000 |
| Vehicle inspection, immediate maintenance | $300 | $1,000 |
| Vehicle title transfer, registration, fees | $200 | $800 |
| Commercial auto insurance (year 1) | $2,000 | $4,000 |
| General liability insurance (year 1) | $400 | $800 |
| LLC, EIN, banking | $250 | $400 |
| Basic shelving and equipment racks | $300 | $1,500 |
| Hand truck, dollies, straps, blankets, ramps | $400 | $1,200 |
| Vehicle decals or basic signage | $100 | $500 |
| Business cards, basic marketing | $50 | $200 |
| Initial fuel and operating cash | $300 | $600 |
| Buffer | $700 | $1,500 |
| Total | $20,000 | $37,500 |
Most operators in this budget land around $25,000-$30,000.
Budget 3: Full Commercial - $35,000 - $60,000
A more recent or better-equipped vehicle, professional upfit, and a higher operating buffer.
| Line item | Low | High |
|---|---|---|
| Used cargo van (newer, lower mileage) | $25,000 | $40,000 |
| Vehicle inspection and immediate service | $500 | $1,500 |
| Title, registration, fees | $300 | $1,000 |
| Commercial auto insurance (year 1) | $3,000 | $6,000 |
| General liability insurance | $600 | $1,200 |
| LLC, EIN, banking | $300 | $500 |
| Custom shelving and racking system | $1,500 | $5,000 |
| Tools, hand trucks, dollies, blankets, straps, ramps | $800 | $2,500 |
| Vehicle wrap or premium decals | $1,000 | $3,000 |
| Marketing budget for first 90 days | $300 | $1,500 |
| Operating capital buffer (3 months expenses) | $3,000 | $8,000 |
| Total | $36,300 | $70,200 |
What's missing from every budget
- Vehicle loan payment if you finance the van. A $25,000 van financed over 60 months at 9% APR is roughly $520/month or $6,240/year.
- Self-employment tax at 15.3% on net earnings.1
- Vehicle maintenance reserves for the long term. A used van running 30,000-50,000 miles per year of delivery work needs $2,500-$6,000/year in maintenance, more in years 3-5 of ownership.
- Tire replacements. A set of 4 commercial-rated tires runs $600-$1,400 and they wear faster on delivery duty than personal use estimates.
- Cell phone and software. Route planning apps, delivery tracking, scheduling tools, communication.
What we'd actually do
For a first-time cargo van business owner with $5,000 and an existing van: Lean budget. About $3,000 spent, $2,000 reserve. Start with gig delivery and direct customer outreach.
For a first-time owner without a van and $30,000 budget: Standard budget. Used Ford Transit or RAM ProMaster, modest setup, focus on getting the business operating with minimal frills.
For a first-time owner with $60,000+ budget who plans to go full-time from day one: Full commercial budget. Better vehicle, professional upfit, real operating buffer.
The trap to avoid: financing a brand-new $50,000+ van as a first-time operator with no customer base. The monthly payment plus the slow customer ramp creates negative cash flow that kills first-time operators.
Next steps
- Cargo Van Business: How It Actually Works - the four types
- Best Cargo Vans for Small Business - the vehicle decision
- Cargo Van Business Plan - what to put on paper
Or back to the Cargo Van Business guide for the rest.