Key Factors in Determining Vehicle Value for CCA
Purchase Price
If you bought your vehicle new or used, the purchase price includes:
The base price of the vehicle.
Additional features or upgrades (e.g., navigation system, winter tires).
Any sales tax paid on the purchase.
Fair Market Value (FMV)
If you already owned the vehicle before using it for business purposes, use the fair market value at the time you started using it for work.
FMV is the amount someone would reasonably pay for your vehicle in its current condition.
Trade-In Value
If you traded in a vehicle as part of the purchase, the value of the new vehicle for CCA is the total purchase price minus the trade-in allowance.
Eligible Costs
Include costs directly related to acquiring the vehicle, such as:
Freight charges.
Import duties (if applicable).
Registration fees required for purchase.
Exclusions
Do not include financing costs or interest in the CCA value. These are claimed separately under vehicle expenses.
How to Use Vehicle Value for CCA Calculation
Determine the Class of Your Vehicle
Most passenger vehicles fall under Class 10 or Class 10.1 with a maximum cost limit of $36,000 (before taxes) for 2024.
Vehicles that cost more than $36,000 before taxes are placed in Class 10.1, and excess costs are not deductible.
Apply the CCA Rate
The CCA rate for Class 10 and 10.1 vehicles is 30% on a declining balance basis.
Adjust for Business Use
Multiply the CCA amount by the business-use percentage of your vehicle.
Example: If your vehicle’s CCA for the year is $9,000 and your business-use percentage is 50%, you can deduct $4,500 as CCA.
Documentation to Keep
Purchase agreement or bill of sale
Receipts for additional costs, such as upgrades or freight charges
Vehicle appraisal or valuation documents for FMV (if applicable)
Logbook
Why This Matters
Correctly determining your vehicle’s value for CCA ensures you claim the right amount and stay compliant with CRA rules. Proper calculations maximize your tax savings while avoiding potential penalties.