A down payment on a lease business vehicle should be generally considered a part of the purchase price.
It may be deducted to the extend of the business use of the vehicle.
You generally has two options to deduct your transportation expenses - actual expenses or based on the standard mileage rate.
If you choose to deduct actual expenses - you will depreciate the purchase price.
Let me know if you need any help.
So, If I go with the actual expense method do I write off the percentage of business use for the down payment in the first year? And can I write off depreciation as well as lease payments at the same time?
If you lease a car, truck, or van that you use in your business, you can use the standard mileage rate or actual expenses to figure your deductible expense.
If you choose to use actual expenses, you can deduct the part of each lease payment that is for the use of the vehicle in your business.
If you lease a car, truck, or van that you use in your business for a lease term of 30 days or more, you may have to include an inclusion amount in your income for each tax year you lease the vehicle. To do this, you do not add an amount to income. Instead, you reduce your deduction for your lease payment. (This reduction has an effect similar to the limit on the depreciation deduction you would have on the vehicle if you owned it.)
You might find examples for deducting actual expenses for leased vehicles in IRS publication 463 page 24 - http://www.irs.gov/pub/irs-pdf/p463.pdf