What is a Commercial Vehicle?

Commercial Trucks Lined Up

Different organizations utilize differing commercial vehicle definitions, so answering the question, “What is a commercial vehicle?” isn’t as straightforward as one might expect! In general, a commercial vehicle is any vehicle that is used for business purposes (unless you’re only driving it to and from work). However, it’s still important to know what is considered a commercial vehicle in each area where it might be relevant.

Your Insurance Company’s Commercial Vehicle Definition

Any vehicle used for business purposes may qualify as a commercial vehicle–at least according to your insurance company. Whether you’re delivering pizzas or carrying heavy loads of cargo to job sites near Northern Chicago or Milwaukee, your personal auto insurance may not cover you in the event of an accident. You’ll need commercial auto insurance, too.

There are a couple of important differences between commercial auto insurance and personal auto insurance:

  • The most important being is that the former commercial insurance follows the vehicle, not the driver. Any employee or owner who drives the vehicle is covered.
  • Commercial auto insurance also usually covers business assets, while personal insurance does not.

Commercial Vehicles and the Tax Code

Any new vehicle that’s used more than 50% of the time for business purposes can allow the owner to benefit from a tax deduction.

The amount that you can deduct is determined by your usage, so if a new vehicle is used for commercial purposes 70% of the time, you can deduct 70% of the vehicle’s value from your tax bill. See section 179 of the U.S. Tax Code for more information. If you’re comparing buying vs. leasing, you should know that this tax incentive is more useful to those who finance.

Interstate and Intrastate Commerce

Even if your vehicle does not qualify as a commercial vehicle in other respects, you need to meet the federal qualifications for commercial vehicles if you use it for interstate commerce. Visit the Federal Motor Carrier Safety Administration (FMCSA) website if you want to be sure that your vehicle meets the requirements.

If you never use the vehicle to move from one state to another, check the unique requirements for your state or locale. You may not have to meet federal restrictions, but if your vehicle qualifies as commercial in other respects, you will likely have to follow similar guidelines.

Does My Commercial Vehicle Require a CDL?

Some drivers may only consider a vehicle to be “commercial” if they need to have a commercial driver’s license in order to operate it. Of course, some vehicles which fit into the definitions given above, and qualify as commercial vehicles in certain areas, may not require a CDL.If you’re wondering whether you need a special permit, see the following qualifications:

  • If your Gross Vehicle Weight Rating is higher than 26,000 pounds, you need a CDL.
  • If you need to tow more than 10,000 pounds, and that weight would push your total GVWR above 26,000 pounds, you need a CDL.
  • Vehicles which are used to transport hazardous materials often require a CDL, but this may depend on the quantities that you’re handling.
  • Any vehicle designed to seat sixteen passengers or more (including the driver) requires a CDL.
Commercial Truck on Highway Near Lake

Classifying Your Commercial Truck

Confused by the GVWR guideline above? Although any trucks can be commercial if they’re used for work, only some trucks require a CDL. Here’s a quick reference so you can find out where your truck falls:

  • GVWR Up to 6,000 pounds: Class 1
  • GVWR of 6,001 to 10,000 pounds: Class 2
  • GVWR of 10,001 to 14,000 pounds: Class 3
  • GVWR of 14,001 to 16,000 pounds: Class 4
  • CVWR of 16,001 to 19,500 pounds: Class 5
  • GVWR of 19,501 to 26,000 pounds: Class 6
  • GVWR of 26,001 to 33,000 pounds: Class 7
  • GVWR of 33,000 pounds and Up: Class 8

Once again, you’ll only need a CDL for trucks with a GVWR of 26,001 pounds or more, or for trucks which have a similar GVWR when they’re towing. While you’re doing research, find out how your vehicle’s axle ratio will impact its performance.

The Lynch Truck Center is Your Source for Commercial Vehicles

If you’re looking for a new commercial vehicle near Waterford or Racine, start your search at the Lynch Truck Center. We’ll help you find exactly what you need, and answer all of your financing and insurance questions along the way, and even teach you a thing or two about commercial truck telematics. Whatever you need, we’re here to help.

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