Case Study: How a Car Wash Business Expanded with Section 179 Deduction

This is a case study of a car was business which invested in autos over 6000 pounds and benefitted from the Section 179 tax deduction.

The Challenge 

Clean Ride Auto Spa, a growing car wash and detailing company, faced increasing demand for their services. To maintain their reputation for excellence and efficiency, the business needed to: 

• Upgrade their car wash equipment to handle higher customer volumes. 

• Purchase a vehicle for mobile detailing services, such as heavy-duty cars over 6000 lbs or other eligible vehicles over 6000 lbs. 

• Install advanced water recycling systems to reduce costs and meet environmental standards. 

However, the upfront costs of these purchases posed a significant challenge. Clean Ride Auto Spa’s management needed a way to make these necessary investments without straining their finances. 

The Solution

After consulting with their tax advisor, Clean Ride Auto Spa discovered the Section 179 deduction, a tax incentive that allowed them to deduct the full cost of qualifying equipment and vehicles over 6000 pounds in the year they were purchased. 

This enabled the company to make the necessary investments while minimizing their tax liability. Section 179 vehicles like the Ford Transit Connect, which qualifies as a commercial vehicle exceeding 6000 pounds, were eligible for the full deduction. This made it the perfect solution for their mobile detailing service. 

Learn more: IRS list of vehicles that qualify for the Section 179 deduction. 

The Investment in vehicles over 6000 GVWR

In 2024, Clean Ride Auto Spa made the following investments: 

• Automated car wash equipment: $200,000 

• Ford Transit Connect for mobile detailing (vehicles classified as 6000 lbs): $35,000 

• Advanced water recycling systems: $50,000 

Total Investment: $285,000 

The Results 

By applying the Section 179 Deduction to vehicle purchases over 6000 pounds, print and delivery firms can reduce taxable income and reinvest savings into growth.

Thanks to the Section 179 tax deduction, Clean Ride Auto Spa was able to deduct the full $285,000 from their taxable income, resulting in: 

• Tax Savings of $99,750 (based on a 35% tax rate) 

• Reduced financial strain, allowing for reinvestment in marketing and staff training. 

A spokesperson from Clean Ride Auto Spa shared: 

“The Section 179 deduction gave us the confidence to invest in our future. The tax savings were substantial, allowing us to expand our operations faster than we had anticipated.” 

The Business Impact – Benefits of Section 179

With the new equipment and vehicle, Clean Ride Auto Spa saw the following improvements: 

• 40% Faster Service Times: The automated equipment reduced customer wait times significantly. 

• New Revenue Streams: The mobile detailing service, powered by a tax-deductible vehicle over 6000 lbs, captured a new market segment, increasing revenue by 15% in the first year. 

• Sustainability Goals: The water recycling systems reduced water usage by 30%, cutting operational costs and aligning with environmental standards. 

Takeaway 

Clean Ride Auto Spa’s success demonstrates how small businesses in service industries can benefit from the Section 179 tax code. By reducing tax liability and reinvesting in operations, businesses can enhance efficiency, meet customer demand, and drive growth. 

For companies considering major investments in heavy vehicles like SUVs over 6000 lbs or work trucks exceeding 6000 lbs, the Section 179 deduction provides a valuable opportunity for significant tax savings. 

Learn how Section 179 tax deductions and the eligible vehicle list can help your business shine! Read our full blog to discover how your business can benefit! 

Have questions about Section 179 or need expert tax advice? Contact NexGen Taxes today to explore how we can help your business maximize tax savings and growth opportunities!