US EditionHere’s Who Will — and Won’t — Qualify for the New Car Loan Interest Deduction
BROWN COUNTY, WISCONSIN, JUL 8 – The new tax law permanently extends the $750,000 mortgage interest limit and introduces a vehicle loan interest deduction benefiting millions of taxpayers with income limits applied.
- President Donald Trump signed a mega tax-and-spending cuts bill last week that includes a temporary deduction for loan interest on new vehicle purchases in 2025 through 2028.
- The deduction is limited to new vehicles assembled within the United States and excludes both used cars and interest on loans obtained from relatives or friends.
- Eligible buyers can deduct up to $10,000 in annual interest on vehicle loans regardless of itemizing, but the benefit phases out for single filers over $149,000 and joint filers over $249,000 MAGI.
- The average new-vehicle loan interest paid in 2025 was about $9,851 over 69.5 months, and a $10,000 interest deduction at 22% tax rate would save up to $2,200 in taxes.
- Experts say the deduction offers limited relief against rising vehicle costs, likely benefiting higher-income borrowers with large loans more than low- and middle-income buyers.
16 Articles
16 Articles
There’s a new tax deduction for car loans in Trump’s ‘big, beautiful bill.’ Here’s who’s eligible—and what’s the catch
While the “No Tax on Tips” provision in President Donald Trump’s One Big Beautiful Bill Act has been making headlines for its tax deductions on tips and overtime, there are plenty of other write-offs tucked into the massive 940-page bill—including one aimed at car owners financing new vehicles with loans. Now that the bill is law, here’s what to know. Rules for the new car loan tax deduction Like the “No Tax on Tips” provision, this deduction ha…
The U.S. President Donald Trump’s bill of tax and expense cuts, which became law last week, contains many new tax provisions. One of them is the new temporary deduction of income tax for interest paid on loans for the purchase of qualified passenger vehicles. This provision will only apply to purchases made in 2025, 2025, 2025, 2027 and 2028. The provision limits the types of vehicles and loans they qualify. It also limits the amount of interest…
Have a mortgage? Trump’s tax law might give you new deductions. - Overpasses For America
Learn more: Standard deduction vs. itemized — Which approach is best for you? Shop Top Mortgage Rates Powered by Money.com – Yahoo may earn commission from the links above. Learn more: What is mortgage insurance, and how does it work? Read more: Mortgage insurance tax deduction — How it works and when it makes sense Claire Boston is a Senior Reporter for Yahoo Finance covering housing, mortgages, and home insurance. Sign up for the Mind Your M…
Scrap the mortgage interest deduction, the General Audit Office advised. That would leave billions to solve other urgent problems in our country. But how exactly does the mortgage interest deduction work, and what are the consequences for homeowners if it is abolished? Thomas de Leeuw, founder of online mortgage advisor Frits, explains.
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