LAS VEGAS (KTNV) — Americans purchasing new vehicles assembled in the United States can now claim a tax deduction on their auto loan interest, potentially saving thousands of dollars over the next four years.
WATCH | Understanding the tax benefit
The tax benefit, part of President Trump's budget reconciliation bill, allows buyers to deduct interest on vehicle loans for cars purchased between 2025 and 2028.
"If you buy a new vehicle assembled in the US, the interest on that car loan is tax deductible for the next 4 years. You can deduct up to if you have a loan big enough, you can deduct up to $10,000 a year off your taxes on the interest on the car loan." — Tyler Corder, CFO of Findlay Auto Group.
The deduction comes with specific requirements. The vehicle must have final assembly in the United States and be used exclusively for personal purposes.
Vehicle make and model will significantly impact eligibility. Last year, 78% of Ford vehicles and just 44% of Chevrolets sold were assembled in the U.S.
The amount saved depends on the loan interest rate. For example, at a 9.3% interest rate, buyers could save approximately $2,200 on taxes over the four-year period.
This new tax benefit arrives as the previously available electric vehicle tax credit is being phased out.
Related: Clean Vehicle Tax Credit ends in less than 2 months
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