I lose count of how many sellers message me from the road, halfway to a dealership, asking whether they should put the truck through the business. The text almost always lands after they have watched a 60-second video promising a free G-Wagon, and almost never before. So here is the one question to ask before you sign anything, plus the honest version of how this works when you run a company from a laptop and a carry-on.
The one question that decides it
Will you drive this car for personal use, even a little? Groceries, a weekend away, the school run. If the answer is yes, and for most of us living this life it is, the "write it all off" dream gets complicated immediately. The CRA does not care that the car is owned by your company. It cares how the car is actually used.
Why the TikTok math does not work in Canada
Most of that advice is American, and it quietly assumes American rules. A few of the greatest hits I see on repeat:
- "Buy it in your LLC and write it off." We do not have LLCs in Canada. We have corporations, sole proprietorships, and partnerships. The whole framing is borrowed from a country with different tax law.
- "If it weighs over 6,000 pounds you can expense the whole thing." That is a US deduction. Canada has nothing like it. Our system writes a vehicle off slowly over several years, not in one heroic lump.
- "Just put your logo on it and deduct 100 percent." A decal does not turn your weekend driving into a business expense. Usage is what counts, not what is printed on the door.
The part the clip never mentions
Here is what blindsides people. When your corporation owns a vehicle that is available to you for personal use, the CRA adds a taxable benefit to your personal income. It is charged for every month the car is simply available to you, not only the months you actually drive it for fun. Park it in the driveway all of January and it still counts. On top of that, if the company pays for gas, insurance, and maintenance, a second personal benefit gets layered on.
The result surprises almost everyone the following spring. The car the company "paid for" pushes your personal tax bill up, sometimes by thousands of dollars. People walk in excited, we run the real numbers, and the excitement quietly leaves the room.
When it actually can make sense
This is not a never. There is a real version that works, and it usually looks like high business mileage, low personal use, and a sensible vehicle rather than a luxury one. A cargo van for a seller hauling pallets to a fulfillment centre is a very different story from a loaded SUV that mostly sees the cottage. The point is that it depends entirely on your numbers, not on a creator's hot take.
Before you buy, ask first
One conversation beats a year of regret. The number of people who buy the car first and ask their accountant second is staggering, and by then the options are gone. We wrote the full breakdown, with the actual standby-charge percentages and the per-kilometre operating-cost numbers, over on our firm's site: Should You Buy a Car Through Your Corporation in Canada? Read that, plug in your own mileage and vehicle cost, and then walk into the dealership. Future you will be a lot calmer at tax time.
Running a business from a beach and never quite sure what is deductible? That is exactly the stuff we untangle, in plain English, in the newsletter. Join us here.