Many small business owners use the same vehicle for both personal and business purposes. The CRA allows deductions for business driving — but only when they are properly tracked and calculated. Done right, this can be one of the most valuable deductions you claim.

What counts as business driving

Examples of eligible business use:

• Driving to meet clients
• Picking up supplies or tools
• Banking or mailing business documents
• Traveling between different work locations

Driving to your regular workplace or home is personal, even if you take a call on the way.

The mileage log

A mileage log is required to claim vehicle expenses.
It should include:

• Date
• Starting and ending odometer readings
• Destination and purpose
• Kilometres driven for business

Without a log, CRA can — and often does — deny the entire claim.

What expenses can be deducted

Once your business-use percentage is established, you can apply it to eligible costs:

• Fuel and oil
• Insurance
• Repairs and maintenance
• Parking fees (business only)
• Registration and licence fees
• Lease payments or CCA for owned vehicles
• Interest on a vehicle loan (limited amounts)

Fines and tickets are never deductible.

Lease vs. ownership

If you lease a vehicle:
A portion of your monthly lease payment is deductible (subject to monthly limits).

If you own a vehicle:
You cannot claim the purchase price all at once. Instead, you claim depreciation using CCA over time.

Both options allow deduction of operating costs — based on business-use percentage.

GST/HST on vehicle expenses

GST/HST is recoverable only on the business-use portion of:

• Fuel
• Repairs
• Insurance (in provinces where it applies)
• Lease payments or loan interest

Again — the business percentage must be supported by a mileage log.

If you use multiple vehicles

Track mileage separately for each vehicle.
CRA does not allow estimates or blended percentages.

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