Tax Deduction for Large Vehicle Purchase: How to Maximize Your Tax Savings

If you’re considering purchasing a large SUV, truck, or van for business use, you could save thousands of dollars with the right tax deduction strategy. The IRS allows business owners and self-employed individuals to deduct a portion—or even the full cost—of a qualifying vehicle using Section 179, Bonus Depreciation, and Standard Mileage/Actual Expense deductions.

Under Section 179, eligible businesses can deduct up to $28,900 for certain heavy SUVs and potentially the full cost of qualifying trucks and vans that meet weight requirements. Additionally, Bonus Depreciation allows further deductions on new and used vehicles. However, to take full advantage of these tax savings, you must understand the IRS guidelines, business-use requirements, and depreciation limits.

How Does the Tax Deduction for Large Vehicle Purchases Work?

When you purchase a large vehicle primarily for business use, the IRS allows you to claim deductions in two main ways:

Option 1: Section 179 Deduction

✔ Deduct up to $28,900 (2025 limit) for certain SUVs over 6,000 lbs GVWR
✔ Deduct 100% of the cost of qualifying trucks and vans over 6,000 lbs GVWR
✔ Vehicle must be used at least 50% for business

Option 2: Bonus Depreciation

✔ Allows businesses to deduct additional depreciation on new and used vehicles
✔ Bonus Depreciation is 60% in 2025 (previously 80% in 2023)
✔ No cap on deduction for heavy vehicles used 100% for business

Both options help reduce taxable income, but they have different rules and limits depending on the type of vehicle.

What Types of Vehicles Qualify for the Deduction?

To claim a tax deduction for your large vehicle purchase, the vehicle must:
✔ Be used at least 50% for business purposes
✔ Have a Gross Vehicle Weight Rating (GVWR) over 6,000 lbs
✔ Be purchased (not leased) for business use

Common Vehicles That Qualify:

🚗 SUVs (Partially Deductible under Section 179, Fully Deductible under Bonus Depreciation)

• Cadillac Escalade
• Chevrolet Tahoe
• Ford Expedition
• GMC Yukon
• Tesla Model X

🚛 Trucks (Often Fully Deductible)

• Ford F-150, F-250, F-350
• Chevrolet Silverado 2500+
• RAM 2500+
• Toyota Tundra

🚐 Vans (Often Fully Deductible)

• Ford Transit
• Mercedes Sprinter
• RAM ProMaster

Check your vehicle’s GVWR rating to confirm if it meets 6,000 lbs or higher before making your purchase.

How Much Can You Deduct in 2025?

Vehicle Type	Deduction Type	2025 Deduction Limit
Heavy SUVs (6,000-14,000 lbs)	Section 179	Up to $28,900
Heavy SUVs (6,000+ lbs)	Bonus Depreciation	Up to 60% of cost
Trucks & Vans (6,000+ lbs)	Section 179	100% deductible
Trucks & Vans (6,000+ lbs)	Bonus Depreciation	100% deductible

If the vehicle is used less than 100% for business, the deduction is adjusted based on business-use percentage.

Section 179 vs. Bonus Depreciation – Which Is Better?

Feature	Section 179	Bonus Depreciation
Deduction Limit	Up to $28,900 for SUVs	No cap (60% in 2025)
Business-Use Requirement	50% or more	50% or more
Applies to New & Used Vehicles	Yes	Yes
Fully Deductible in Year 1?	Yes, for qualifying trucks/vans	Yes, up to 60%
Can Be Used Together?	Yes	Yes

For most businesses, combining Section 179 + Bonus Depreciation offers the best tax savings.

How to Claim the Deduction?

1️⃣ Determine if your vehicle qualifies (GVWR over 6,000 lbs, 50%+ business use).
2️⃣ Decide between Section 179 or Bonus Depreciation (or both).
3️⃣ Track vehicle expenses (keep records of mileage and business use).
4️⃣ Report deductions on IRS Form 4562 when filing taxes.

Tip: Consult a tax professional to ensure you maximize deductions while following IRS rules.

Common Mistakes to Avoid

❌ Not verifying GVWR – Check the door sticker or manufacturer’s website.
❌ Not keeping mileage logs – IRS requires proof of business use.
❌ Leasing instead of buying – Section 179 only applies to purchases.
❌ Using the vehicle too much for personal use – Business use must be 50% or more.

FAQs