Buy a Vehicle for Tax Deductions

Buying a Vehicle for Tax Purposes: What Delaware Business Owners Should Know

Posted on January 29, 2026

Buying a Vehicle for Tax Purposes: What Delaware Business Owners Should Know

If you're a small business owner, self-employed professional, or contractor in Delaware, purchasing a vehicle may offer more than just transportation—it could offer real tax savings. Certain vehicles that meet IRS weight and usage criteria can qualify for tax deductions under Section 179 and Bonus Depreciation rules.

In this guide, we break down how vehicle purchases can impact your taxes, which types of vehicles qualify, and what buyers around Wilmington, Dover, and Newark need to consider before purchasing.

Understanding Section 179 Deduction

Section 179 of the IRS Tax Code allows businesses to deduct the full purchase price of qualifying equipment—including certain vehicles—used for business purposes during the tax year.

For 2025, the deduction limit is $1,220,000, and the vehicle must be placed in service during the year it’s claimed.

(Reference: IRS Publication 946 – https://www.irs.gov/publications/p946)

Which Vehicles Qualify for Business Tax Deductions?

To qualify for full Section 179 deduction or bonus depreciation, the vehicle typically must:

Have a gross vehicle weight rating (GVWR) over 6,000 lbs
Be used over 50% for business purposes
Be purchased and placed in service within the tax year

Common qualifying vehicles include:

Chevrolet Suburban, Tahoe
Ford F-150, F-250
GMC Sierra 1500, Yukon
RAM 1500, 2500

(Reference: IRS Publication 463 – https://www.irs.gov/publications/p463)

Bonus Depreciation in 2024–2025

Bonus depreciation allows businesses to deduct a percentage of the cost of eligible new or used vehicles beyond Section 179 limits. In 2024, bonus depreciation allows for a 60% write-off in the first year for qualifying property (down from 80% in 2023), and is scheduled to phase down further in 2025.

(Reference: https://www.irs.gov/newsroom/businesses)

Important Considerations Before Buying a Vehicle for Tax Savings

Always consult a tax advisor or CPA to ensure compliance and proper documentation.
Ensure the vehicle’s GVWR is clearly stated (usually on the driver-side door sticker).
Keep detailed mileage and business usage logs to defend your deduction.
Confirm that used vehicles also qualify, as long as they meet IRS criteria.

Using a local dealership like My Car in Wilmington ensures transparency on GVWR, title history, and vehicle condition—so you can buy with confidence.

Final Thoughts: Maximize Deductions, Minimize Confusion

Purchasing a qualifying SUV or truck can offer meaningful tax deductions if you’re a Delaware business owner. With the right documentation and vehicle choice, you could offset a significant portion of your purchase.

Explore our inventory at My Car or speak with your CPA about which models could be a smart investment for your business in 2025.