Compare the estimated after-tax cost of buying or leasing a vehicle you use for business in Canada. Enter the price, financing and your business-use percentage, and the calculator weighs CCA, interest and lease deductions against each other.
Fill in the form and press Calculate to see your estimate.
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Enter the vehicle and tax details: purchase price, down payment, sales tax rate, business-use percentage, whether you’re a sole proprietor or a corporation, and your estimated tax rate.
Fill in the buy option: loan term and rate, fees, depreciation or resale value, the CCA rate and the CRA limits.
Fill in the lease option: lease term and rate, residual, deposit, the lease deduction cap and running costs.
Compare: the calculator shows the after-tax cost of each option side by side, with a detailed summary you can print.
The 2026 CRA vehicle limits
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Limit
2026 amount
What it means
CCA ceiling, Class 10.1 passenger vehicles
✓$39,000 before tax
The most of a passenger vehicle’s cost you can depreciate, for vehicles acquired on or after January 1, 2026
CCA ceiling, Class 54 zero-emission vehicles
✓$61,000 before tax
The higher ceiling for zero-emission passenger vehicles
Lease payment deduction
✓$1,100 a month before tax
The most you can deduct for lease payments on a new lease entered into in 2026
Interest on a car loan
✓$350 a month
The most interest you can deduct on a new loan entered into in 2026
If you buy, you deduct capital cost allowance (CCA) on the vehicle and the interest on the loan, up to the limits above. A passenger vehicle over the ceiling goes in Class 10.1, which depreciates at 30% a year on a declining balance. If you lease, you deduct the lease payments, up to the monthly cap. Either way, running costs such as fuel, insurance, maintenance and licence fees are deductible too.
Only the business-use share is deductible. If you drive 20,000 business kilometres out of 25,000 in total, you can claim 80% of the eligible costs, so a logbook matters. The CRA explains what you can claim on its motor vehicle expenses page.
Sole proprietor or corporation?
A sole proprietor claims vehicle expenses on the T2125 with their personal return. A corporation claims them on its T2, but if the corporation provides the vehicle to an owner or employee, the personal use can create a taxable benefit on their T4. That benefit often changes which option is cheaper, so it’s worth a conversation before you sign.
T-Ledgers is a CPA-led accounting firm practising since 2020, led by Wajahat Ajmal, CPA, FCCA. We have worked with 202 clients, with a combined $60 million in client revenue.
We can run the numbers with your actual quotes, your tax rate and your business use, and set up the right records in your books from day one. Vehicle claims are part of our bookkeeping, corporate tax and personal tax services.
Reviewed by Wajahat Ajmal, CPA, FCCA. Official sources checked October 2026.
It depends on the price, financing, how long you keep the vehicle and how much you drive for business. Buying lets you deduct CCA and loan interest; leasing lets you deduct the lease payments. The calculator compares the after-tax cost of both.
$39,000 before tax for a Class 10.1 passenger vehicle acquired on or after January 1, 2026, and $61,000 before tax for a Class 54 zero-emission passenger vehicle.
Yes. Choose the corporation tax mode and enter the corporation’s tax rate. If an owner or employee uses the vehicle personally, ask us about the taxable benefit too.
Talk to a CPA about your vehicle
Book a free 30-minute call. We’ll go through your quotes and tell you how each option affects your taxes.
Call (866) 254-5368 or email info@tledgers.ca. A 24/7 receptionist answers, so a real person picks up.
