Tax Benefits of Used Commercial Truck Purchases in Canada

Purchasing a used commercial truck isn’t just a strategic asset move—it can be a smart tax-saving decision. Whether you're an owner-operator or managing a fleet, understanding how to leverage tax deductions and incentives can significantly reduce your operating costs.

This guide breaks down the main tax benefits available when you finance or purchase used trucks for business use in Canada, including write-offs, depreciation, and capital cost allowances.

Immediate Write-Offs and Section 179-Style Deductions

Under Canadian tax laws, most used commercial trucks qualify as depreciable property. If the truck is acquired for business use, you may be able to deduct a portion—or in some cases, the full amount—of its cost through:

• Capital Cost Allowance (CCA): This is Canada’s version of depreciation. It lets businesses claim a percentage of an asset’s value each year.
• Accelerated Investment Incentive: In recent years, CRA has allowed for a higher first-year CCA deduction on qualifying assets like used heavy vehicles.

Buying a used truck typically puts you in Class 10 or Class 16, with CCA rates up to 30% and 40%, respectively. That means you can write off a substantial part of the cost early in the asset's life.

Learn more about eligible equipment types here.

Comparing New vs Used Truck Depreciation

Used trucks depreciate more slowly after their initial drop in value, which happens during the first few years of ownership. Buying used allows you to claim useful tax deductions without the heavy hit of new-truck depreciation.

Here’s a comparison:

GST/HST Input Tax Credits

If your business is registered for GST/HST, you may be able to claim input tax credits (ITCs) on the purchase of a used commercial truck—if it was sold by another registrant and HST was charged.

This allows you to recover the HST paid on the truck as a credit against your business’s HST liability.

Financing a Used Truck? You Can Still Claim the Same Benefits

Whether you purchase your used truck outright or finance it through an equipment loan or lease, you still gain access to depreciation and write-off benefits.

If you lease, the monthly payments may be deductible as operating expenses. If you finance, interest on the loan may also be deductible.

Estimate your payment using our truck financing calculator.

Real-World Example: Maximizing Tax and Cash Flow

A mid-sized Ontario logistics firm bought two used Freightliners for $110,000 total, using asset-based lending for 80% of the purchase price.

• They claimed 40% depreciation via CCA Class 16 in Year 1.
• They deducted loan interest from taxable income.
• They recovered $13,000+ in HST through input tax credits.

This allowed them to reinvest the savings into trailer upgrades and expand their fleet—without needing to raise new capital.

Additional Resources and Related Pages

• Transportation & Trucking Industry
• Refinancing & Sales-Leaseback
• Eligible Equipment List
• About Mehmi Financial
• Contact Us

Frequently Asked Questions

1. Can I claim depreciation if I finance the truck?
Yes. As long as you own the vehicle and use it for business purposes, you can claim CCA—even if it’s financed.

2. Do I need to buy from a dealership to claim tax benefits?
No. You can buy from private sellers or commercial dealers, but you must document the sale and ensure it’s for business use.

3. What class does my truck fall into for CCA purposes?
Most used heavy-duty trucks fall into Class 10 (30%) or Class 16 (40%). Check with your accountant.

4. What if I lease instead of buy?
You can’t claim depreciation, but lease payments are deductible as a business expense.

5. Can I get input tax credits if I buy a used truck privately?
Not unless the seller is an HST-registered business. Input tax credits apply only to purchases where HST was charged.

6. What if I sell the truck later?
You may face recapture or terminal loss depending on the sale price versus the remaining undepreciated value. An accountant can help you report this correctly.

If you're planning to purchase or finance a used commercial truck for your business, understanding the tax benefits is essential. Feel free to speak to a financing advisor at Mehmi Financial Group to see how your truck investment can pay off—on the road and at tax time.

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