Auto Loan Interest Deduction
Save More When You Finance a U.S.-Final-Assembled New Vehicle
New federal tax benefit (2025–2028): Eligible buyers may be able to deduct up to $10,000 per year in auto loan interest paid on a qualifying new vehicle—even if you take the standard deduction.
Quick note: This page is educational only. Eligibility depends on your tax situation and the specific vehicle/loan. Please confirm with your CPA or tax professional.
The Benefit
Deduct up to $10,000 of interest paid per year on a qualifying auto loan (subject to income limits).
The Vehicle
New vehicle (original use), personal use, Final Assembly in the U.S., and under 14,000 lbs GVWR.
The Loan
Must be secured by a lien and originated after Dec 31, 2024. Leases do not qualify.
Income Limits
Benefit begins to phase out for Single filers $100k MAGI or Joint filers $200k MAGI.
The U.S.-Final-Assembly Auto Loan Interest Deduction
A new federal provision may allow eligible taxpayers to deduct interest paid on a qualifying auto loan—if the vehicle’s final assembly occurred in the United States and the loan/vehicle meet the IRS requirements. This can be especially helpful when customers are comparing higher interest rates, because a deduction may reduce taxable income (subject to limits and phaseouts).
Which Clark Hyundai Models Are Commonly U.S.-Final-Assembled?
Availability can vary by model year and specific unit. We will help you verify final assembly for the exact VIN you are considering.
Hyundai Tucson (Gas/Hybrid)
Commonly assembled in Alabama
Hyundai Santa Fe
Commonly assembled in Alabama
Hyundai Santa Cruz
Commonly assembled in Alabama
Hyundai IONIQ 5 (select model years/units)
U.S. production has been announced; verify by VIN/label
Hyundai IONIQ 9 (select model years/units)
U.S. production has been announced; verify by VIN/label
How to Confirm Whether a Specific Vehicle Qualifies
Because eligibility is vehicle-specific, the best practice is to verify final assembly on the vehicle itself. We recommend this simple check:
- Look at the window sticker / vehicle information label for the “Final Assembly” line.
- If needed, confirm the manufacturing details using the NHTSA VIN decoder.
Keep in mind: some VIN patterns may be indicators, but they are not a substitute for confirming final assembly on the label.
Pro Tip
Your tax return will require the vehicle’s VIN, so we recommend saving a copy of the window sticker and your loan documents.
Real-World Savings: What Could This Mean?
This is a deduction, so the value depends on how much interest you actually pay and your marginal federal tax rate.
Simple Estimate (Illustrative Only)
Potential Federal Tax Reduction ≈
Interest Paid × Your Marginal Federal Tax Rate
(up to $10,000 of interest paid per year, subject to phaseouts)
Example:
If you paid $2,500 in interest and your marginal federal rate is 22%, the deduction could reduce federal tax by approximately $550.
*Actual results vary based on your full tax profile.
Frequently Asked Questions
Do I need to itemize to claim this deduction?
No. This is structured so eligible taxpayers may claim it even if they take the standard deduction.
Does this apply to used vehicles?
No. The vehicle must be new (original use begins with the taxpayer).
Does this apply to leases?
No. Lease payments do not qualify for this deduction.
Is it based on when I bought the vehicle or when the loan starts?
The IRS guidance focuses on the loan being originated after December 31, 2024 and secured by a lien, along with the vehicle meeting “new,” “personal use,” and “U.S. final assembly” requirements.
What documents should I keep?
Keep your purchase/loan documents, a copy of the window sticker (showing final assembly), and your lender’s year-end interest statement. You’ll also need the vehicle’s VIN for your tax filing.
Can I claim this for a business vehicle or work truck?
This specific provision is for personal use. Business-use vehicles may follow different tax rules. Please consult your CPA or tax professional.
Calculate Your Savings
Estimate your annual tax return benefit.
Estimated Annual Tax Savings
$0
Does not account for amortization curve. 1st year estimate.
Have Questions?
Our finance team in Kalispell is ready to help you navigate these new benefits.
Ready to See What You Qualify For?
Visit Clark Hyundai in Kalispell and let us help you confirm U.S. final assembly on the exact VIN you’re considering and structure your financing options.
