Can an LLC Write Off a Car Purchase?
For many small business owners, the idea of writing off a car purchase through an LLC feels like unlocking a hidden tax advantage.
The short answer?
Yes, an LLC can write off the purchase of a car.
And timing matters. October is when next year’s models hit the showrooms, which means dealers are motivated to move current-year inventory, and buyers are out there..
For entrepreneurs considering an LLC vehicle purchase, this season can be the perfect moment: stack competitive pricing with first-year write-off opportunities like Section 179 and bonus depreciation, and the savings can be dramatic.
From Section 179 deductions to bonus depreciation and mileage write-offs, there are multiple ways to reduce your taxable income with a business vehicle.
Section 179 Deduction Explained
Section 179 of the IRS Code is one of the most powerful tools available to business owners. It allows your LLC to deduct the purchase price of qualifying equipment — including vehicles — in the year it’s put into service.
- For 2025, heavy vehicles (over 6,000 pounds GVWR) qualify for up to $31,300 in Section 179 deductions.
- Lighter passenger vehicles have lower limits, but the write-off can still be substantial.
- To qualify, the vehicle must be used more than 50% of the time for business.
Example: If your LLC buys a new SUV weighing 6,200 pounds and uses it 80% for business, you could deduct the majority of the purchase price under Section 179.
IRS Topic 510 — Business Use of Car covers the specifics, and resources like Kelley Blue Book highlight which SUVs and trucks typically qualify.
Bonus Depreciation Rules in 2025
In addition to Section 179, LLCs can take advantage of bonus depreciation. For 2025, thanks to the One Big Beautiful Bill Act, 100% bonus depreciation is permanent for qualifying new business vehicles.
That means your LLC can deduct the remaining value of the car in its first year of service — after applying Section 179. This is especially beneficial for heavy trucks and SUVs used in industries like construction, logistics, or farming.
Bonus depreciation can dramatically reduce your taxable income, but only if you keep accurate records showing the car’s business use percentage.
Actual Expense Method vs. Standard Mileage Rate
When it comes to ongoing vehicle deductions, the IRS gives LLCs two main options:
- Actual Expense Method
- Deducts the business-use portion of fuel, insurance, maintenance, repairs, and depreciation.
- Requires meticulous record-keeping.
- Works best for high-cost vehicles or heavy business usage.
- Standard Mileage Rate
- Instead of tracking every dollar, deduct a flat rate per mile driven for business.
- The IRS sets this rate each year (for 2025, it will be announced in December 2024).
- Easier to manage, but may result in a smaller deduction for expensive vehicles.
Only business miles count — commuting from home to your office doesn’t qualify. Tools like mileage apps or old-school logbooks are essential for staying audit-ready.
For an accessible overview, see TaxAct’s guide on vehicle write-offs.
Lease vs. Purchase Considerations
Not every LLC chooses to buy outright. If your company leases a vehicle, lease payments can be written off as a business expense based on the percentage of business use.
- Leasing tends to spread deductions evenly over the term.
- Purchasing with Section 179 and bonus depreciation can front-load tax savings.
The right choice depends on your cash flow, long-term plans, and whether you want immediate tax relief or steady annual deductions.
2025 Tax Updates for Business Vehicles
The landscape for vehicle write-offs has shifted slightly for 2025:
- 100% Bonus Depreciation is now permanent for qualifying new vehicles.
- Only the business-use portion of any deduction can be claimed.
- If business use drops below 50% after claiming Section 179 or bonus depreciation, the IRS requires recapture — meaning some of the deduction must be repaid.
- Selling the vehicle early can also trigger recapture rules.
For a deeper dive, 1-800Accountant’s guide provides examples tailored to LLCs.
Frequently Asked Questions, Answered.
How much can an LLC write off for a car?
It depends on the vehicle and its business use. Under Section 179, an LLC can deduct up to $31,300 in 2025 for heavy vehicles over 6,000 lbs GVWR. For lighter passenger cars, the limits are lower, and only the business-use percentage qualifies
What are the benefits of buying a car under an LLC?
Titling the car under your LLC can unlock tax deductions, streamline depreciation, and provide liability protection. It also ensures expenses are clearly separated from personal finances, which is especially helpful for audits and accounting.
Can you write off 100% of a 6,000 lb vehicle?
Yes — if the vehicle is used more than 50% for business, an LLC can combine Section 179 and bonus depreciation to write off up to 100% of the purchase price in the first year. SUVs, trucks, and vans that exceed the 6,000 lb threshold are the most common candidates.
Is it better to buy a car through your business or personal?
It depends on how you use the car. If the vehicle is primarily for business, purchasing through the LLC maximizes deductions and separates liability. If it’s mostly for personal use, buying it under your name is usually the better move, since the IRS only allows deductions for business use.
Ready to make your next car work harder for your business?
At Ride Legal, we believe ownership is more than paperwork — it’s about confidence and freedom on the road. Whether you’re structuring an LLC, registering a new purchase, or making sense of complex rules, we handle the details so you can focus on the drive, the build, and the lifestyle.
Start with Ride Legal today.
