Accurate detection of genomic alterations using high-throughput sequencing is an essential component of precision cancer medicine. We characterize the variant allele fractions (VAFs) of somatic single nucleotide variants and indels across 5095 clinical samples profiled using a custom panel, CancerSCAN. Our results demonstrate that a significant fraction of clinically actionable variants have low VAFs, often due to low tumor purity and treatment-induced mutations. The percentages of mutations under 5% VAF across hotspots in EGFR, KRAS, PIK3CA, and BRAF are 16%, 11%, 12%, and 10%, respectively, with 24% for EGFR T790M and 17% for PIK3CA E545. For clinical relevance, we describe two patients for whom targeted therapy achieved remission despite low VAF mutations. We also characterize the read depths necessary to achieve sensitivity and specificity comparable to current laboratory assays. These results show that capturing low VAF mutations at hotspots by sufficient sequencing coverage and carefully tuned algorithms is imperative for a clinical assay.