Does your car qualify for the car loan interest deduction?

It must be new (original use starts with you), bought for personal use, a car, minivan, van, SUV, pickup or motorcycle made primarily for public roads, with a gross vehicle weight rating under 14,000 lbs, and with final assembly in the United States. Brand doesn't matter: plenty of foreign-brand vehicles are assembled here, and some American-brand vehicles are not.

IRS Publication 6126 lists three ways: the information label on the vehicle at the dealer, the VIN, or NHTSA's VIN Decoder. This tool reads the plant location from NHTSA's database. If it comes back blank, check the window sticker or your purchase paperwork.

Up to $10,000 of interest per year for 2025 through 2028. The cap is reduced by $200 for every $1,000, or part of $1,000, that your modified AGI is over $100,000 ($200,000 if married filing jointly). It reaches zero at $150,000 single or $250,000 joint.

No. A deduction lowers your taxable income; your actual savings is roughly the deduction times your tax bracket. $3,000 of deductible interest in the 22% bracket saves about $660.

No. It goes on Schedule 1-A and works with the standard deduction. You'll need to report the VIN on your return.

Used vehicles and leases don't qualify. The loan must be taken out after December 31, 2024 to buy the vehicle and be secured by a first lien on it. Loans from related parties generally don't qualify.

A refinance of a qualifying loan generally still qualifies if it's secured by a first lien on the vehicle and the new starting balance doesn't exceed the old loan's ending balance. Interest on any cash-out above that doesn't count.

No. Interest you deduct as a business expense can't also be claimed under this deduction. Self-employed people sometimes come out ahead claiming the business share as a business expense; that's a question for your tax preparer.