Know What Your Truck Is Worth — And What the IRS Lets You Deduct
Calculate semi truck depreciation schedule and Section 179 tax deductions. See year-by-year market value decline and how MACRS or Section 179 reduces your tax burden.
Reviewed by TruckLeap Editorial Team — Trucking Industry Researchers & Writers
Data current as of
Planning your next truck purchase? Use the Truck Payment Calculator to model financing costs alongside this depreciation schedule.
Truck Depreciation Benchmarks
| Section 179 deduction limit (2026) | $1,160,000 | first-year full deduction |
| Bonus depreciation (2026) | 40% | phases down from 80% in 2023 |
| MACRS recovery period (trucks) | 5 years | IRS GDS depreciation schedule |
| Average resale value loss yr 1 | 15–25% | new Class 8 truck |
| Typical book life (owner-op) | 8–12 years | before engine overhaul |
Sources: IRS Publication 946 (Depreciation), ATBS equipment cost data
Quick Answer
A Class 8 truck loses 15–25% of its market value in year one and roughly 10–15% per year after that. On a $150,000 truck, that's $22,500–$37,500 in first-year value loss — separate from the tax deduction you claim via Section 179. This calculator shows both market depreciation and tax depreciation side-by-side on the same year-by-year schedule.
The difference between what your truck is worth and what the IRS lets you deduct — and why both matter
Most owner-operators think about truck depreciation as a single number. In reality, there are two completely separate concepts happening simultaneously — and confusing them leads to bad decisions about both taxes and equipment strategy.
Market depreciation is what your truck is actually worth on the open market. It's the number that matters when you sell, trade in, or need to get financing on your next truck. Market depreciation is driven by age, mileage, maintenance history, demand for that equipment type, and prevailing freight market conditions. It has nothing to do with what you deduct on your tax return.
Tax depreciation is the amount the IRS allows you to deduct from your taxable income each year as the truck loses value. This number is calculated according to IRS schedules — it's a formula, not a reflection of actual market conditions. The IRS doesn't care whether used truck prices have risen or fallen; your tax deduction follows a fixed schedule based on your purchase price.
Take a new Class 8 semi purchased for $180,000. In year one, market depreciation runs approximately 20% — the truck is worth around $144,000. That's a $36,000 drop in the first year alone. By year two, it's worth roughly $122,400 (15% off the year-one value). At year five, assuming average maintenance and mileage, the market value sits around $82,000-$88,000 — less than half the original price.
By year ten, a well-maintained Class 8 semi bought for $180,000 is typically worth $45,000-$60,000. The truck has lost more than $120,000 in market value over a decade. That's $12,000+ per year in real wealth erosion — money that needs to come from somewhere if you plan to replace the truck.
On the tax side, using MACRS 5-Year: Year 1 deduction is $36,000 (20%), Year 2 is $57,600 (32%), Year 3 is $34,560 (19.2%), Year 4 is $20,736 (11.52%), Year 5 is $20,736 (11.52%), Year 6 is $10,368 (5.76%). Total tax deductions over 6 years: $180,000. The IRS lets you deduct the entire purchase price — just spread across 5-6 years.
The market depreciation rates in this calculator are industry averages. A truck running 150,000+ miles per year depreciates faster in dollar terms than one running 80,000. A truck with documented maintenance, clean inspection records, and no major accidents holds value better than a neglected one.
High-mileage trucks — those crossing the 500,000-mile mark — see an accelerated value drop at that milestone because the clock on engine overhaul is ticking. Buyers know this and price accordingly. The benchmark is approximately $0.10-$0.15 per mile in market value loss over the truck's useful life. At 100,000 miles per year, that's $10,000-$15,000/year in value loss from mileage accumulation alone, stacked on top of the age-based depreciation curve.
A used truck bought for $80,000 that's already three years old has already absorbed the steepest part of the depreciation curve. The buyer gets a truck that depreciates perhaps $4,000-$8,000 per year going forward — versus a new truck at the same price point depreciating $16,000-$20,000 in year one.
This is why experienced owner-operators often prefer 2-3 year old trucks: the prior owner absorbed the biggest value loss, and the truck still has 600,000-800,000 miles of useful life at current maintenance standards. The total cost of ownership — payments plus depreciation — can be significantly lower than buying new, especially when new truck payments are running $3,000-$3,500/month.
Smart operators treat market depreciation as a real expense, even though they don't write a check for it each month. Setting aside $800-$1,200/month into a dedicated truck replacement fund — separate from operating accounts — means the down payment for the next truck is being funded from operating cash flow rather than requiring new debt.
This matters when lenders evaluate your next truck purchase. A buyer who shows up with $25,000-$40,000 in cash for a down payment gets better terms than one who needs 100% financing. The monthly discipline of treating depreciation as a real cost changes the long-term financial picture of running a trucking business.
Lenders look at the market value of your truck as collateral. A truck with $60,000 in remaining market value supports less borrowing than one worth $120,000. If you need a line of credit for unexpected repairs or a bridge between loads, the value of your existing equipment determines what you can borrow against.
Understanding where your truck sits in its depreciation cycle tells you what your real net worth looks like — not just your bank balance, but your total asset position. Owner-operators who track market value alongside income are better positioned to make buy/sell/upgrade decisions at the right time in the market cycle.
When to take the big first-year deduction vs. spreading it out — with real tax impact examples
The choice between Section 179 and MACRS is one of the most valuable tax decisions an owner-operator makes in the year of a truck purchase. Get it right and you can save tens of thousands of dollars in the first year. Get it wrong and you leave money on the table or create a tax liability you weren't prepared for.
Section 179 of the IRS tax code allows businesses to immediately expense — deduct in full — the cost of qualifying property in the year it's placed in service. For 2024, the maximum Section 179 deduction is $1,160,000. A truck costing $180,000 placed in service in 2024 can be deducted in full: $180,000 off your taxable income in year one.
The eligibility requirements are straightforward for truckers: the vehicle must be used more than 50% for business purposes (commercial hauling easily qualifies), it must be placed in service during the tax year, and you must have taxable income at least equal to the deduction (Section 179 cannot create a loss — any excess carries forward to the next tax year).
The 2024 phase-out threshold is $2,890,000. If your total capital expenditures for the year exceed this amount, the Section 179 limit begins to reduce dollar-for-dollar. For most owner-operators buying one or two trucks, this threshold is irrelevant.
Here's what three depreciation methods look like on a $150,000 truck at a combined 37.3% tax rate (22% federal income + 15.3% self-employment):
Section 179: - Year 1 deduction: $150,000 - Year 1 tax savings: $55,950 - Years 2-6 deductions: $0 - Total tax savings over 6 years: $55,950
MACRS 5-Year: - Year 1 deduction: $30,000 (20%) - Year 1 tax savings: $11,190 - Year 2 deduction: $48,000 (32%), savings: $17,904 - Years 3-6 deductions: $29,400, $17,280, $17,280, $8,640 - Total tax savings over 6 years: $55,950 (same total — the timing differs, not the amount)
Straight-Line (5 Years): - Years 1-5 deduction: $30,000/year each - Annual tax savings: $11,190/year - Total tax savings over 5 years: $55,950
The total tax savings are identical across all three methods — you're deducting the same $150,000 either way. What changes is the timing of those savings. Section 179 puts $55,950 back in your pocket this year. MACRS front-loads year two (32%) but spreads the rest. Straight-line is perfectly even.
Section 179 is the right choice when you have high taxable income in the year of purchase and want to reduce your tax bill as aggressively as possible. The classic scenario: an owner-operator who had a great year running premium lanes, made $120,000 in net business income, and is buying a replacement truck in December. Section 179 turns that $150,000 purchase into a $150,000 deduction, slashing their taxable income from $120,000 to nothing (with the remainder carrying forward).
First-year owner-operators with startup expenses and moderate income should be cautious — Section 179 cannot create a net operating loss from that deduction alone, and it requires current-year business income to offset. If your taxable income is only $60,000, a $150,000 Section 179 deduction gives you $60,000 this year and $90,000 carried forward (which is still valuable, just not all in year one).
MACRS 5-Year is the standard choice for most operators because it provides steady deductions each year without requiring a large lump of income in year one. The year-two spike (32%) is notable — it often exceeds the year-one deduction, which helps operators who are still ramping revenue in their first year and expect higher income in year two and three.
MACRS also interacts better with bonus depreciation (currently 40% for 2025, phasing down from 100% in prior years). You can take bonus depreciation on top of MACRS in the first year, further accelerating deductions without the Section 179 income limitation.
If your deductions exceed your income in a given year, you have a Net Operating Loss (NOL). Under current tax law, NOLs can be carried forward indefinitely but are limited to 80% of taxable income in the carry-forward year. This changes the math on large Section 179 elections for operators with lower income — the deduction doesn't disappear, but it may not all benefit you in year one.
Straight-line depreciation divides your cost evenly over 5 years. It's the easiest to model and produces the most predictable tax deductions. For operators who want certainty in their quarterly estimated tax payments and don't need to maximize any single year's deductions, it's a defensible choice. But it's rarely the most tax-efficient option — MACRS front-loads deductions better (especially the 32% in year two), and Section 179 beats both for high-income years.
Bonus depreciation allows an additional first-year deduction on top of regular MACRS. It was 100% from 2017-2022, has been phasing down since, and is 40% for assets placed in service in 2025. A $150,000 truck in 2025 with bonus depreciation: $60,000 in bonus (40%), then regular MACRS applies to the remaining $90,000 basis. Total first-year deduction: $60,000 + $18,000 (20% MACRS on remaining basis) = $78,000. Combined with Section 179, you may be able to exceed this amount, subject to income limitations.
Depreciation elections are irrevocable for the tax year. Once filed, you cannot go back and switch from MACRS to Section 179. Before making this decision on a major truck purchase, run the numbers with a CPA who specializes in owner-operator or small fleet taxes. The cost of an hour of tax planning advice is a rounding error compared to the tens of thousands at stake in a depreciation election on a $150,000-$200,000 truck.
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