you say 100% business use for the new vehicle. but you also seem to be saying this will be your personal vehicle which means a certain portion will not be business use. (commuting is personal use) if the use was all business then it would own and pay for it and bear all its costs. similarly, his vehicle would be retitled in the name of the business which would pay him the Fair Market Value. all expenses for this vehicle would also be born by the business. thus if the business were to fold each would be entitled to 50% of the FMV of each vehicle. some days he would use the new one while you would use the old one.
another option is for you to buy your vehicle while he retains ownership of his vehicle. then you two would have to agree on how to reimburse each of you for the business use of your vehicle including all the associated costs such as wear and tear (depreciation), gas, grease, oil, tires, repairs and maintenance, insurance, and any other costs.
if you establish an accountable plan (basically periodic mileage and expense reports submitted to the business for reimbursement at least once a month) there would be no reporting required on your personal returns for the vehicle business use.
another method but not 50 /50 splitting is for each of you to bear the entire costs for your vehicle then each of you deducts on your schedule E as unreimbursed partnership expenses the vehicle costs.
there is no right answer. come to an agreement before you go into business together.
