Whether to lease or buy delivery vans for a small business fleet depends mostly on how many miles the vans will run, what the tax benefits are worth to you in the first year, and the resale value you can count on at the end. Buying tends to cost less over the life of a hard-working van, while a closed-end lease keeps cash in the business and hands the resale risk to the lessor. Tax figures are for 2026 unless noted and aren't tax advice, so confirm yours with a tax professional.
Should a small business lease or buy its fleet of delivery vans?
Delivery routes pile up miles, vans get shelving, racks and wraps, and many owners keep them until the repair bills outgrow the payment. Each of those habits pushes toward owning, because a closed-end lease usually prices in a mileage allowance and a return-condition standard that vary by lessor.
| Question | Points toward buying | Points toward leasing |
|---|---|---|
| Annual miles per van | High or hard to predict | Steady and inside the allowance |
| Upfits and wraps | Permanent shelving, racks, refrigeration | Stock van, removable equipment |
| Resale risk | You're comfortable selling used vans | You want the lessor to carry it |
| Tax position | You have income to offset this year | Level yearly deductions suit you |
A purchase is usually financed with an equipment loan secured by the vans, which our guide to trucking and fleet financing covers, and equipment lease vs. equipment financing compares the two structures.
A three-van example: loan payments, lease payments and resale value
Picture a business adding three cargo vans at $52,000 each. Every figure is an assumption, and real quotes vary by lender, lessor, credit and vehicle.
- Loan: 10% down ($5,200 per van) and $46,800 financed over 48 months at an assumed 9.00% fixed rate. The WSJ prime rate was 7.00% on October 5, 2026.
- Lease: a 48-month closed-end lease at the same 9.00% implied rate, nothing down, month-end payments, an assumed 35% residual ($18,200), a 20,000-mile annual allowance and an assumed $0.25 per excess mile.
Per van, that's $1,164.62 a month on the loan and $977.61 on the lease. Over 48 months you'd pay $61,102 on the loan, down payment included, and own the van, or $46,925 on the lease and hand it back. For three vans the loan takes $15,600 down and $3,493.86 a month, against $2,932.83 on the lease. Which costs less depends on how the term ends.
| Assumed outcome per van | Buy, net of resale | Lease, with mileage charges | Lower cost |
|---|---|---|---|
| 20,000 miles a year, resells for $18,200 | $42,902 | $46,925 | Buy, by about $4,000 |
| 20,000 miles a year, resells for $10,000 | $51,102 | $46,925 | Lease, by about $4,200 |
| 30,000 miles a year, resells for $12,000 | $49,102 | $56,925 | Buy, by about $7,800 |
The third row adds 40,000 excess miles at $0.25, or $10,000 per van. At normal mileage the breakeven resale value is about $14,200, roughly 27% of the price, and buying costs less in total dollars above it. The comparison leaves out taxes, the time value of money, sales tax, registration, insurance, maintenance, lease fees, wear charges, early termination costs and other uses for the $15,600 down payment.
▦Estimate your equipment financing paymentsRun the numbers in the equipment financing estimator →▸How vehicle weight changes Section 179 and bonus depreciation in 2026
Owners recover a van's cost through depreciation, and the IRS sorts vehicles by weight. IRS Publication 463 (2025 edition, reviewed April 30, 2026) defines a car for depreciation purposes as a four-wheeled vehicle, including a truck or van, of not more than 6,000 pounds gross vehicle weight. Many full-size cargo vans are rated above that and compact vans often aren't, so check each rating.
| Vehicle | Rule for owners |
|---|---|
| Truck or van rated at 6,000 pounds or less | Capped. Placed in service in 2026: $20,300 in year one with bonus depreciation ($12,300 without), $19,800 in year two, $11,900 in year three and $7,160 in each later year |
| Over 6,000 and up to 14,000 pounds, primarily designed or used to carry passengers | Section 179 limited to $32,000 for tax years beginning in 2026 |
| Over 6,000 pounds with a fully enclosed driver compartment and load area, no seating behind the driver's seat and no body section protruding more than 30 inches ahead of the windshield | The $32,000 limit doesn't apply |
| Qualified nonpersonal use vehicle, such as a van specially modified with permanent shelving and painted to display the company's name, or a vehicle used directly in the business of transporting persons or property for pay or hire | Not treated as a car for the caps |
The caps come from Rev. Proc. 2026-15 (Internal Revenue Bulletin 2026-13, March 23, 2026). The SUV limit and its exceptions are in IRS Publication 946 (2025 edition, reviewed April 30, 2026), which also exempts vehicles designed to seat more than nine passengers behind the driver's seat and vehicles with a cargo area, open or enclosed by a cap, of at least 6 feet in interior length that isn't readily accessible from the passenger compartment.
Publication 946 puts the Section 179 limit at $2,560,000 for tax years beginning in 2026, reduced once the cost of qualifying property placed in service passes $4,090,000, and the deduction can't exceed your taxable business income. It also says a 100% special depreciation allowance, usually called bonus depreciation, applies to certain qualified property acquired and placed in service after January 19, 2025.
In the example, three qualifying heavy cargo vans could produce up to $156,000 of first-year deductions, against $60,900 if the passenger automobile caps applied. Listed property, which covers most vehicles, must be used more than 50% for qualified business use to claim either deduction, and Section 179 property must be acquired by purchase. Our Section 179 guide explains how that works with financed equipment.
Resale has a tax side too: Publication 463 says any gain on disposing of a vehicle is treated as ordinary income up to the Section 179 deduction and depreciation you claimed, so a van written off in full and later sold for $18,200 generally adds $18,200 to taxable income.
What you can deduct on a leased van, and when the lease inclusion amount applies
Publication 946 says you generally can't depreciate property you lease for your business. Under Publication 463 you deduct the part of each lease payment that's for business use, and you can't deduct payments that are really to buy the vehicle, whatever the contract calls them. In the example, three vans used only for business would yield about $35,194 of payment deductions a year.
The lease inclusion amount reduces that deduction on expensive vehicles. It can apply to leases of 30 days or more when the fair market value at the start tops a threshold: $62,000 for passenger automobiles, including trucks and vans, leased in 2024 or 2025 under Publication 463, and Table 3 of Rev. Proc. 2026-15 also starts above $62,000 for 2026 leases. The amounts are small, running from $8 in the first tax year to $27 in the fifth and later years for a value over $62,000 and up to $64,000, before proration for days and business use. A heavier van that isn't a passenger automobile follows a separate Publication 946 rule, which adds an inclusion amount only if qualified business use falls to 50% or less.
The standard mileage rate is rarely open to a fleet. The IRS rate table (reviewed July 28, 2026) lists 72.5 cents per business mile for January 1 through June 30, 2026 and 76 cents for July 1 through December 31. Publication 463 says you can't use it if you use five or more cars at the same time, such as in fleet operations, or once you've claimed Section 179 or the special depreciation allowance on the vehicle. For a leased vehicle, choosing the rate means using it for the entire lease period.
Canadian fleets: CCA classes and the 2026 leasing limit
Canadian owners claim capital cost allowance (CCA) instead. The CRA's class list (modified August 31, 2026) puts motor vehicles and some passenger vehicles in Class 10 and passenger vehicles costing more than a prescribed ceiling in Class 10.1, both at 30%. The Department of Finance announced on January 14, 2026 that the Class 10.1 ceiling is $39,000 before tax for vehicles acquired on or after January 1, 2026, with deductible leasing costs staying at $1,100 a month before tax for new leases entered into from that date. Whether a work van counts as a passenger vehicle depends on the CRA's definitions, so ask your accountant which class applies.
Mileage limits, wear charges and what to check in a fleet lease
Federal consumer leasing disclosures won't cover a fleet. Regulation M (read October 2026) defines a consumer lease as one made to a natural person primarily for personal, family or household purposes, for more than four months and up to a dollar threshold that is adjusted each year, and it excludes leases for agricultural, business or commercial purposes and leases made to an organization. Read these lease terms closely.
- Mileage allowance and excess charge. Compare the allowance with each van's route data.
- Open-end or closed-end. Commercial fleet leases are often open-end, sometimes with a terminal rental adjustment clause (TRAC). They typically carry no mileage cap, but you settle the gap between the agreed residual and the sale price, so resale risk stays with you.
- Wear and upfits. Ask how drilled floors, shelving, wraps and dents are charged at return.
- Early termination. Find the formula for ending a lease early.
- Fees and guarantees. Look for acquisition, disposition and documentation fees, plus any personal guarantee.
The practical way to decide is to price both structures on the same vans. With EQ Funding, one application reaches a network of lenders that compete for your deal, so you can set equipment financing and lease offers side by side. Lenders assess credit and repayment ability, and approval and terms vary by lender.