Use Vehicle Deductions to Your Advantage

The One Big Beautiful Bill Act (OBBBA) expanded the deductions available for business vehicles in 2025. Timing and vehicle type are critical.

Heavy SUVs, Pickups, and Vans

 These vehicles with a gross vehicle weight rating (GVWR) over 6,000 pounds may qualify for:

• 100 percent bonus depreciation

• Section 179 expensing up to $31,300 for SUVs and $2.5 million for trucks and vans

• No luxury limits

  
  

 Example. A $50,000 SUV used 90 percent for business produces a $45,000 deduction this year.

Standard-Weight Vehicles

Cars (and lighter SUVs with GVWRs of 6,000 pounds or less) face luxury depreciation caps allowing only up to $20,200 in first-year deductions.

Act Before Year-End 

To qualify, you must own the vehicle and place it in service by December 31st, meaning it’s ready and being used for business. Driving it even one business mile before midnight proves eligibility.

Note. Electric-vehicle tax credits ended September 30, 2025.

Don’t Overlook Deductions Hidden in Your Current Vehicles 

Your existing vehicles can still produce valuable deductions before year-end.

Sell older business vehicles. You’ll capture deductible losses, especially for those with declining business use.

Check vehicles purchased before 2018. If you traded cars under the old like-kind exchange rules, you may have unclaimed losses built up over multiple trades. Selling now could unlock a sizable deduction.