Buying a Business Vehicle in 2026

Buying a Business Vehicle in 2026? Know the New IRS Depreciation Limits

The IRS has issued depreciation caps for “luxury” business vehicles placed in service in 2026. The depreciation caps are: $20,300 for Year 1 (including bonus depreciation), $19,800 for Year 2, $11,900 for Year 3 and $7,160 for Year 4 through Year 6. They apply to passenger cars and many SUVs, trucks and vans. The IRS also announced lease inclusion amounts for lessees of these types of vehicles if first leased in 2026 and the vehicle’s fair market value when leased is more than $62,000. The depreciation caps and lease inclusion amounts don’t apply to SUVs, trucks or vans with a gross vehicle weight rating (GVWR) of more than 6,000 pounds.