TRAC Lease & Tax Deductions

 

What is TRAC Leasing?

TRAC stands for Terminal Rental Adjustment Clause, a type of lease specifically designed for commercial vehicles like the Mercedes-Benz Sprinter. Unlike traditional leases, a TRAC lease provides businesses with more flexibility and potential ownership options at the end of the lease term. It allows the lessee to agree upfront on the vehicle’s estimated residual value and gives the option to purchase the vehicle at that price—or potentially share in the proceeds if it sells for more.
Because it’s structured with business use in mind, TRAC leasing is ideal for companies looking to manage monthly expenses, maintain newer fleet vehicles, and take advantage of potential tax benefits. It’s commonly used in industries that rely heavily on transportation and logistics, where vehicle turnover and operational costs must be optimized.

Benefits of TRAC Leasing with Sprinter

1. Lower Monthly Payments

With a TRAC lease, monthly payments are typically lower compared to traditional financing. This can free up capital for other business needs while still giving you access to a premium Mercedes-Benz Sprinter van.

2. Flexible End-of-Term Options

At the end of the lease, you can purchase the van for the pre-agreed residual value, extend the lease, or walk away. If the vehicle is sold for more than the agreed residual, your business may share in the profit—an opportunity not available in standard leases.

3. Full Tax Deductibility

Since TRAC leases are structured for business use, your lease payments may be fully tax-deductible as a business expense (consult your tax advisor to confirm your eligibility).

4. Improved Cash Flow Management

TRAC leasing helps preserve cash flow by reducing upfront costs. There’s typically little or no down payment required, allowing you to invest more in your operations or fleet expansion.

5. Always Driving Newer Vehicles

Leasing allows you to regularly update your fleet to newer, more efficient Sprinter models—keeping your business image sharp while benefiting from the latest safety, tech, and fuel efficiency features.

6. Customizable for Fleets

Whether you operate one vehicle or an entire fleet, TRAC leasing can be tailored to your unique business model, including mileage terms, vehicle upfits, and maintenance plans.

Section 179 Deduction

Business owners looking to keep their fleets current are always looking for tax savings. Mercedes-Benz of San Antonio is happy to tell you that if you’re looking to save on taxes on your next new vehicle purchase, you should consider the Section 179 deduction. This applies to a Mercedes-Benz over 6,000 pounds that you use for business purposes, but there’s more context we think you should know about.

San Antonio fleet managers should come to San Antonio to have a chat with our experts regarding your options.

What Is the Section 179 Deduction?

The United States Internal Revenue Service allows businesses in Alamo Heights and the rest of the United States to deduct the full purchase costs of a qualifying vehicle under Section 179. This means that if you’ve bought or leased a vehicle that fits the criteria, you can subtract the expense from your income taxes. However, there are a few steps to follow to take advantage of these tax savings that you can read about below.

How Does It Work?

When you buy a Mercedes-Benz over 6,000 pounds, you can maximize your tax savings with the Section 179 deduction. You can deduct up to $30,500 from a qualifying vehicle from your business’s gross income in the same tax year. You might have the option to deduct the full purchase price, but your situation is best discussed with a tax professional.

Does My Business Qualify?

To get the Section 179 deduction, San Antonio business owners will have to fulfill these conditions:

  • Your business has purchased or financed new or used business equipment (your vehicle) during the current tax year.
  • The vehicle has a gross vehicle weight rating (GVWR) between 6,000 and 14,000 pounds.
  • The vehicles are used for business purposes, not personal transportation.
  • You put the equipment into service between January 1 and December 31 of the relevant tax year.
  • You spent less than $3,500,000 total on the equipment.

Here are a few pieces of advice on the dollar amounts in question:

  • You can write off a maximum of $1,000,000.
  • The total amount of equipment purchased can’t exceed $2,500,000. You have a dollar-for-dollar phase-out after that; as a result, past the $3,500,000 mark, the deduction goes away entirely.

Mercedes-Benz of San Antonio Is Your Finance Team

Vehicles such as the G-Class and GLS SUVs might qualify for the Section 179 deduction because they can be outfitted as a Mercedes-Benz over 6,000 pounds. If you still have questions, Mercedes-Benz of San Antonio is a short drive from Shavano Park and ready to serve you. Contact us today with all your questions, and we’d be more than happy to answer them.

 

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