Is Car Loan Interest Tax Deductible? Under the New Law, It Just Might Be

Between Apple News Alerts and social media scrolls, it’s easy to fill your days with new information on happenings within the White House. Signing the dotted line on Executive Orders is not unheard of in the Oval Office, but signing 147 within the first 100 days of the presidency is a record feat. 

One of the most well-known changes to come from the White House is the passing of the One, Big, Beautiful Bill Act, a law that affects federal taxes, credits, and deductions–including taxes on your car loan. 

How will this new bill impact your car loan moving forward? Keep reading to find out! 

The One, Big, Beautiful Bill Car Loan Interest Deduction

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The One, Big, Beautiful Bill contains four provisions: No tax on tips, no tax on overtime, deductions for seniors, and no tax on car loan interest. 

The new law now allows many drivers the opportunity to deduct up to $10,000 in auto loan interest, giving you the chance to save thousands on your next visit to our Ford dealership in Red Wing. 

Am I Eligible for a Car Loan Interest Tax Write Off? 

The tax break runs from 2025 through 2028, and while it is one of the most significant tax breaks, it comes with specific requirements. 

To qualify for this tax benefit, the following criteria must be met: 

• You must secure your vehicle with a loan — that means replacing a search for current Ford lease deals with a visit to our Ford Finance department to determine your loan options. 
• The vehicle must undergo final assembly in the U.S. 
• Income limits may apply: $100,000 for single filers and $200,000 for joint filers (Discuss your eligibility with a tax professional). 
• The deduction applies to all types of vehicles used for personal purposes, ranging from powerful pickups to reliable sedans. 

While the criteria may sound complicated, the actual process is quite simple: 

1. Pick a U.S.-built car (any from House Ford in Red Wing fits the bill!) 
2. Visit our finance department to discuss your loan options and explore our ongoing Ford finance specials and deals for added savings. 
3. Keep detailed records of your payments throughout the life of the loan. 

Voila! By following these steps, you may be able to qualify for a $10,000 tax deduction for car loan interest! 

What is “Final Assembly?” 

One of the main incentives of the act is not only to provide financial relief to car buyers, but also to refocus efforts on purchasing products made in the U.S. with a little monetary motivation. 

According to the IRS, determining the location of final assembly is relatively simple. 

“The location of final assembly will be listed on the vehicle information label attached to each vehicle on a dealer’s premises.” Taxpayers can also utilize the VIN decoder tool provided by the National Highway Traffic Safety Administration to determine where the vehicle was assembled in order to find out if it will be eligible for the tax deduction. 

Made in the USA, Made For You–Visit House Ford Today! 

Whether you’ve set your sights on the Ford F-150 or the family-friendly Explorer, we’ve got the vehicle that’s right for you, with the Ford financing deals and tax incentives you’re looking for. 

As the leading Ford dealership in Red Wing, MN, our team is here to help you find your dream ride at a price you can smile about. Browse our online inventory of new Ford vehicles, then visit House Ford for a test drive today! 

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