What Are Farm Vehicles?

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QuickTakes:

• What qualifies as a farm vehicle?
• How far can you drive a farm-use vehicle?
• What is farm-vehicle insurance?
• What are the financial benefits of farm vehicles?

From low registration and insurance costs to potential tax deductions, there can be plenty of automotive opportunities for farm-vehicle owners to save money. However, these vehicles have their own unique set of rules and state regulations.

By understanding the financial benefits of farm vehicles, first-time buyers as well as farmers looking to maximize the value of their current vehicles can better understand how to get the most from their investment.

What Qualifies as a Farm Vehicle?

In many states, farm vehicles, or covered farm vehicles (CFV), are defined as trucks or truck tractors used specifically for agricultural purposes. These vehicles often require a special farm-use license plate that they can only qualify for if they meet certain requirements. Farm-use license plates are not available for passenger vehicles like cars and vans, even if those vehicles are used for farm-related purposes.

For a vehicle to qualify as a CFV, it will likely have to meet certain conditions laid out by the U.S. Department of Transportation. These conditions require that the vehicle:

• Be a straight truck or articulated vehicle
• Be operated by an owner or operator of a farm or ranch, family member, or employee of the owner or operator
• Transport agricultural commodities, livestock, machinery, or supplies to or from a farm or ranch
• Not be used in for-hire motor carrier operations, such as rideshare services, unless a vehicle owned and operated by a tenant farmer and is used to transport the landlord’s portion of the crops under a crop-share agreement
• Not transport hazardous materials that require placarding
• Weigh less than 26,001 pounds — if it weighs more, it can't be operated outside of its home state or more than 150 air miles away from the operator's farm

Farm vehicles are different from other pieces of farm equipment, which are vehicles specifically designed to perform farm duties, such as combines, tractors, and grain haulers.

How Far Can You Drive a Farm-Use Vehicle?

Farm vehicles have a limited radius of operation. Most farmers can only drive these vehicles within 150 miles of their farm. If they need to go farther, drivers are required to have a commercial driver's license. While there are some federal exemptions to the operational regulations for these vehicles, they depend on the intended use of a vehicle.

Understanding Farm-Vehicle Insurance

Farm-vehicle owners will also need to secure insurance — some states penalize farm-vehicle owners with a fee if they don't get insurance at the same time as registration.

Farm-vehicle insurance covers everything from bodily injury to property-damage liability to collision repairs, but typically costs less than standard auto insurance. Since farm vehicles won't spend as much time on the road as a typical truck, they have less implied financial risk for insurance companies.

Additional Financial Benefits of Farm Vehicles

Beyond insurance savings, farm vehicle owners will also typically pay lower registration costs compared with a non-work-related vehicle, with states such as Virginia only requiring half the typical payment.

Farm vehicles are also subject to business-vehicle tax deductions under IRS Publication 463. However, there are limits on the amount of purchase value an owner can deduct from their taxes for farm vehicles over 6,000 pounds. These limitations do not, however, extend to depreciation, which can help owners get more of their money back over time.