Section 179 Deduction on Used Commercial Vehicles: Get More Benefits for Your Business

How the Section 179 Tax Deduction Works

You may be well aware that taxes can be a major expense. However, there is a tax provision that can help you save money and invest in your business. This provision is known as Section 179 Internal Revenue Code. The Section 179 purpose is to encourage entrepreneurs to invest in themselves and grow by allowing them to deduct the purchase price of a qualifying commercial vehicle or other equipment from gross income. The idea is that if companies can retain more of their profits, they will have more likelihood of investing in business and creating more jobs.

Section 179 can be a powerful tool for businesses of all sizes, from a single owner to large corporations. Read further to understand the rules and limitations of the provision to maximize your tax savings and benefits.

Which Vehicles Does Section 179 Cover?

The Section 179 deduction was once called the “Hummer tax deduction”. This nickname meant for business owners the possibility to utilize the generous limits to purchase costly trucks. Initially, the deduction was restricted to vehicles weighing less than 6,000 pounds. This impacted the tax implications for many high-end cars. Larger SUVs can be quite heavy, and they were not subject to these regulations. Today, a lower limit for SUVs is included in Section 179. To ascertain if your car qualifies for the Section 179 deduction, check several key factors that come into play in determining its eligibility. 

Commercial Vehicles Eligible for Full Section 179 Deduction

In 2025, the commercial vehicles that qualify for the full Section 179 deduction are those specifically designed for business use and generally not intended for personal passenger transport. Vehicles eligible for the full deduction (up to $2,500,000, subject to phase-out above $4 million in total equipment purchases) include:

• Work trucks over 14,000 lbs GVWR, such as heavy-duty pickup trucks, dump trucks, and delivery trucks.
• Specialized vehicles like cement mixers, garbage trucks, cranes, forklifts, skid steers, and buses designed for carrying 20+ passengers behind the driver’s seat.
• Cargo vans with permanent commercial modifications (enclosed cargo area, no seating behind the driver).
• Tractors and specialized farm vehicles, ambulances, and hearses.
• Pickup trucks with beds longer than six feet, which are not subject to SUV caps.

Heavy SUVs (between 6,000 and 14,000 lbs GVWR) are subject to a $31,300 Section 179 cap, with the remaining basis eligible for bonus depreciation. All vehicles must be used for business purposes over 50% of the time, with proper documentation required.

Qualifying Models For Section 179 Deduction in 2025

Can Used Vehicles Qualify for Section 179 Deduction?

Used vehicles can qualify for Section 179 if they meet the condition “new-to-you.” A van, truck, or SUV must be acquired through a transaction at fair market value, and either bought outright or financed with certain leases and loans. Importantly, the vehicle must be registered under the company's name and should be utilized for business purposes for at least 50% of its usage.

Used EVs Are Also Eligible

The previous version of the EV tax credit faced criticism due to its exclusion of pre-owned vehicles. Starting in 2023, eligible used EV acquisitions could entitle taxpayers to a credit of up to $4,000, capped at 30% of the vehicle's cost.

Additional criteria include:

• The used vehicle must be a plug-in electric or fuel cell car with a minimum battery capacity of 7 kilowatt hours.
• Applicable only for the first transfer of ownership.
• The purchase price of the vehicle must not exceed $25,000.
• The vehicle's weight must be under 14,000 pounds.
• The vehicle must be at least two model years older than the year of purchase (for 2025, vehicles 2023 model year or older qualify).
• The credit can be claimed once in three years.
• The credit applies only for the first transfer of ownership after August 16, 2022, and only if purchased from a licensed dealer.
• The credit can be claimed once every three years by a taxpayer.
• Income limits apply: $150,000 for joint filers, $112,500 for heads of households, and $75,000 for single filers.
• Private sales do not qualify; the vehicle must be bought through a dealer.

If you are looking for a high-quality used vehicle for your business, at Indy Auto Man, Indianapolis, you will find an array of trucks, vans, and SUVs that can qualify for Section 179 deduction and serve you well for years. Check our inventory and contact us to get your best car-buying experience.