A gearbox does not usually fail without warning. It gets noisy, then notchy, then it goes on a Tuesday morning on the way to a job in the next county. What follows is a recovery truck, a garage that cannot look at it until Thursday, a parts delay, and three weeks in which the business does not really exist.
Every trade knows this story. Very few have ever costed it, which is why it keeps being treated as bad luck rather than as a predictable event to plan for.
The repair bill is the small number
Put illustrative figures on a self-employed electrician who bills an average of £320 a day.
Sixteen working days off the road is £5,120 of work not done. The gearbox repair is £1,900. A hire van, once one is found locally, is £55 a day plus insurance, so roughly £700 for the fortnight it is needed. Two jobs move to another firm because the customer cannot wait, and one of them was a repeat customer worth a few hundred pounds a year.
Direct cost of the breakdown: around £7,700, of which the repair — the only part most people think about — is under a quarter.
And the costs do not stop when the van comes back. The work did not disappear, it queued. Three weeks of jobs now have to be squeezed into the following month alongside the month that was already booked, which means evenings, a rushed job or two, and customers who were promised a date that has already slipped once.
The repair invoice is the receipt. The cost is the fortnight of days you could not bill and the two customers who found somebody else.
What actually leaves you stranded
Three specific gaps turn a mechanical problem into a business problem, and all three are fixable on a quiet afternoon.
The first is the replacement vehicle. Many commercial vehicle policies treat a courtesy or replacement van as an optional extra rather than something included as standard, and the ones that do include it often provide a car rather than a van, which is useless if you are carrying racking and stock. Read the schedule for your own policy, and if there is no replacement commercial vehicle in it, get a quote for adding one — it is usually a small annual sum against a £5,000 exposure.
The second is breakdown cover that stops at the roadside. Recovery to the nearest garage is not the same as onward travel or recovery to a garage you actually trust, and for a van a hundred miles from home on a Tuesday that difference is a day and a half.
The third is the tools. If the van goes to a garage with everything in it, the equipment goes out of service too, and access depends entirely on the garage's opening hours. It is worth knowing what comes out of the van before it gets handed over.
The planning that makes it survivable
The financial answer is unglamorous: a downtime fund. Work out what a fortnight off the road costs — for the electrician above, comfortably over £5,000 — and hold that in a separate account that is not the tax pot. It is not an emergency fund for everything; it is specifically for the thing that stops the money.
Then write the list. On one side of A4: what stops the business earning tomorrow morning? Van, tools, phone, licence, the one certificate that lets you sign off your own work. For each, the answer to "and then what?" should be a name and a number, not a shrug. The mobile mechanic who will look at it same day. The hire firm two towns over that stocks Transits. The mate in the trade who can cover a job at short notice, on the understanding that you would do the same.
Timing matters too. A van bought outright and run into the ground has the lowest monthly cost and the highest downtime risk; the older it gets, the more days a year it takes out of the business. That is the real trade-off behind asset finance versus buying outright — not just the interest cost, but what a breakdown costs a business with no spare capacity. Replacing a van at seven years rather than eleven looks like an expensive decision on the profit and loss and is often a cheaper one in practice.
The insurance conversation to have before you need it
Two things are worth checking on your own cover this week. Whether business interruption applies to a vehicle at all — on many small policies it does not, because it is tied to damage at your premises rather than to a van on a motorway. And what the excess is on the van policy, because a £750 excess on a claim worth £1,900 changes whether claiming is even sensible.
The wider lesson from anyone who has been through it: the claim rarely covers what you assumed it covered, and the time to find that out is not while standing on a hard shoulder. That is exactly the pattern in the insurance claim that was only half paid, and it repeats across every kind of small business cover.
None of this is about being pessimistic. A van doing 25,000 miles a year will have a bad week eventually; that is not a risk, it is a schedule. The businesses that handle it well are not luckier. They have simply decided in advance what happens on the Tuesday morning it goes, and they have the cash to make that decision without borrowing to do it. Everything else — the pricing, the quoting, the day rate — assumes a working van, which is a good reason to make sure there is always one.
Common questions
Does my van insurance include a replacement vehicle?
Only if the policy schedule says so. Many commercial vehicle policies treat a replacement or courtesy vehicle as an optional extra rather than a standard inclusion, and some that do include one provide a small car instead of a van, which is of limited use if you carry racking, stock or heavy tools. Read your own schedule rather than assuming, and ask specifically about a like-for-like commercial replacement and how long it is provided for. Adding the cover usually costs a modest annual sum, which compares favourably with the several thousand pounds a fortnight off the road typically costs a one-van business.
Can I claim for lost earnings while my van is being repaired?
Usually not under a standard van policy. Business interruption cover on small commercial policies is generally tied to damage at your premises rather than to a vehicle being unavailable, so lost billing while a van is in the garage often falls outside it entirely. Where the breakdown was caused by another driver, loss of earnings can form part of a claim against their insurer, but you will need evidence such as diary entries, quotes accepted and invoices you were unable to raise. The practical protection for most trades is a cash reserve rather than an insurance product.
Is it cheaper to hire a van or use the money to repair faster?
Compare both against the daily value of the work, not against each other. If a day's work is worth £320 and a hire van costs around £55 a day, hiring pays for itself several times over on the first day, so the question is really whether one can be sourced quickly and whether it can carry your kit. Paying a garage a premium to prioritise the job is worth it on the same arithmetic. The mistake is deciding based on which invoice looks smaller rather than on which option gets you earning sooner.
How much should a trades business keep as a downtime fund?
A reasonable target is the cost of two weeks off the road, held separately from the money set aside for tax. Work it out from your own numbers: average daily billing multiplied by ten working days, plus a realistic repair figure and a fortnight of hire costs. For a sole trader billing £320 a day that lands somewhere above £5,000. Build it gradually as a fixed transfer each month rather than trying to fund it in one go, and treat it as a business cost of running a vehicle rather than as savings you are free to spend elsewhere.
