New Auto Loan Interest Deduction
New Auto Loan Interest Deduction – What Car Shoppers Need to Know
Updated: July 18, 2025
Car shoppers now have a new reason to finance their next purchase. A recently passed tax law – part of the One Big Beautiful Bill – introduces an Auto Loan Interest Deduction that could save buyers thousands over the next few years.
Key Points About the Deduction
- Effective Dates: Applies to new vehicles purchased on or after January 1, 2025. Claimable on tax years 2025 through 2028. The bill was signed into law on July 4, 2025.
- Deduction Limit: Deduct up to $10,000 per year in interest on qualifying auto loans.
- Eligible Vehicles: Must be new, assembled in the U.S., and under 14,000 lb.
- Income Phase-Outs: Full deduction available for single filers ≤ $100,000 and joint filers ≤ $200,000.
- Above-the-Line Deduction: No itemizing required.
- Loan Requirements: Standard secured auto loans; VIN required.
What This Means for You
- Financing a new U.S.-assembled vehicle may provide additional tax savings.
- Confirm assembly location with your dealer.
- Income thresholds may impact eligibility.
- Program runs through 2028.
U.S.-Assembled Models That Qualify
| Brand | Eligible U.S.-Assembled Models |
|---|---|
| Genesis | GV70 (Gas & Electrified) |
Effective Dates at a Glance
| Event | Date |
|---|---|
| Eligible Purchases Start | January 1, 2025 |
| Law Signed | July 4, 2025 |
| Deduction Claimable For | 2025–2028 Tax Years |
| Program Ends | December 31, 2028 |
