Both truck dealers, lenders, original equipment manufacturers (OEMs), and buyers are set to gain from the reinstatement and expansion of 100% bonus depreciation under the newly passed One Big Beautiful Bill.
Businesses can once again claim 100% bonus depreciation on eligible assets, including heavy machinery and commercial trucks, that are put into use after January 19. This legislation, approved by President Donald Trump on July 4, halts the previously planned phase-out and raises the rate from 40% to 100% for qualifying assets.
While the permanent increase in bonus depreciation encourages larger and more frequent truck acquisitions, the implications of the 2017 tax bill, enacted during Trump’s first term, differ significantly from those of the 2025 tax plan due to contrasting market conditions during their respective rollouts, according to Avery Vise, vice president of trucking at the transportation research firm FTR, during a July 10 webinar.
“The 2017 tax bill and the 2025 tax bill cannot be compared because the former was a new tax cut, whereas the recent legislation primarily works to retain existing benefits,” he stated.
“This situation is more about preserving benefits than generating new opportunities.” — Avery Vise, vice president of trucking at FTR
Moreover, the 2025 tax bill introduces a fresh 100% bonus depreciation for qualified production property within the U.S., covering manufacturing assets for property that enters service from 2025 to 2029. This new manufacturing-focused bonus depreciation aims to promote immediate investment in machinery, equipment, and manufacturing facilities over the next four years.
Ongoing Challenges in Trucking
Despite the potential support from bonus depreciation, it is unlikely to reverse existing market trends independently due to tariffs and other pressures, Vise noted. The decline in truck orders is expected to persist, even with the 60% increase in bonus depreciation scheduled for 2025.
“The anticipated reduction in orders will likely continue at least through the fall, impacted by when orders are placed and built. This situation will exert pressure on the trucking sector as we advance,” he remarked. “Ultimately, none of this will have impact unless we see an increase in freight volume, which is the fundamental issue.”
Current freight activity is down compared to last year, with overall spot truck postings declining by 22.4% year-on-year in June, as reported by Beaverton, Oregon-based DAT Freight & Analytics, a company that monitors freight and spot rates. However, flatbed spot rates saw a year-on-year increase of 1.6%, and van spot rates rose by 0.5% in June, suggesting some positive trends for larger carriers, Vise added.
“The larger carriers have largely adjusted their capacities to align with market demand. Yet, a significant number of smaller carriers are still active, predominantly working for brokers,” he concluded.
Register here for the free Equipment Finance News webinar “Technologies to Advance Your Equipment Financing Business” scheduled for Thursday, July 17, at 11 a.m. ET.
