Archive · 26 Jul 2025
New Tax Deduction on Auto Loans Explained
A new tax law is offering a tax break for people who take out loans to buy cars.
You might be able to deduct up to $10,000 of the interest you pay on your car loan each year.
However, the car has to be new and assembled in the U.S. Also, there are income limits: single people making under $100,000 and couples under $200,000.
The deduction starts in 2025 and lasts until 2028.
The amount you save depends on your loan's interest rate and size.
New tax law offers deductions on auto loan interest.
Deduction is up to $10,000 annually for eligible loans.
Eligibility requires the vehicle to be new and U.S.-assembled.
The deduction is available for single filers with income up to $100,000, and joint filers up to $200,000.
The tax break will start in 2025 and end in 2028.
- Who
- Car buyers who meet specific criteria.
- What
- A new tax deduction on auto loan interest.
- When
- Starts in 2025 and runs through 2028.
- Where
- N/A
- Why
- To provide a tax break for auto loan interest.
- Type of Deduction
- Auto Loan Interest
- Maximum Deduction
- $10,000 per year
- Eligibility: Vehicle
- New, U.S. assembled
- Eligibility: Single Filers
- AGI up to $100,000
- Eligibility: Joint Filers
- AGI up to $200,000
- Start Year
- 2025
- End Year
- 2028