Enter your vehicle cost, choose lease or finance, and see exactly how much you can write off for tax purposes — including CRA caps, CCA depreciation, and interest limits.
When you use a vehicle for business, the CRA allows you to deduct a portion of the costs — but there are strict limits depending on whether you lease or finance, and what type of vehicle you drive.
The CRA distinguishes between passenger vehicles (cars, most SUVs) and motor vehicles (pickup trucks, cargo vans designed primarily for goods/equipment). Motor vehicles are not subject to the prescribed cost caps, meaning you can depreciate the full purchase price. Most pickup trucks with a GVWR over 6,000 lbs qualify as motor vehicles.
The AIIP enhanced first-year CCA for new vehicle purchases. Instead of the half-year rule (15% in year 1 for Class 10), AIIP allowed up to 45% in the first year. This incentive is being phased out:
Only the business-use portion of vehicle expenses is deductible. The CRA expects you to keep a mileage log for at least one full year to establish your business-use percentage. If audited, you'll need to demonstrate the split between personal and business kilometres.
CRA prescribed limits sourced from Canada Revenue Agency. For full personal and corporate Alberta tax rates or to compare sole prop vs corporation structures, use our other calculators.
Vehicle tax deductions have complex rules that change every year. Our team can help you structure the purchase or lease for maximum tax benefit.
Book a ConsultationThe CRA caps deductible lease payments. For 2026, the maximum monthly lease deduction is approximately $1,050. If your vehicle's manufacturer's suggested list price exceeds the CRA prescribed limit, the deduction is further reduced proportionally. Business-use percentage also applies.
Class 10.1 applies to passenger vehicles that cost more than the CRA's prescribed limit (e.g., $39,000 for 2026). The CCA rate is 30% declining balance, but the depreciable amount is capped at the prescribed limit plus sales tax. Each Class 10.1 vehicle gets its own separate CCA class, and no terminal loss is allowed on disposition.
Yes. If the truck qualifies as a motor vehicle (typically pickup trucks and vans designed to carry goods, especially those over 6,000 lbs GVWR), it falls under CCA Class 10 with no cost cap. You can depreciate the full purchase price at 30% declining balance. If it's classified as a passenger vehicle, the CRA's prescribed cost limit applies.
It depends on the vehicle cost, lease payments, and your tax situation. Financing generally provides larger upfront write-offs through CCA depreciation (especially with the Accelerated Investment Incentive), while leasing provides consistent annual deductions. For expensive vehicles above the CRA limit, leasing can sometimes be more advantageous since the lease formula may allow a higher effective deduction.
