Donna Genie explains a new tax rule for 2025: you can now deduct up to $10,000 a year in car loan interest on US-assembled vehicles, even if you use the car personally. The limit is per tax return, not per vehicle.
Starting with the 2025 tax year.
Up to $10,000 per year.
The vehicle must be assembled in the United States.
The limit is per tax return (not per vehicle).
One Big Beautiful Bill Act.
Starting in 2025, you might be able to write off part of the interest on your car loan, even if you're not using the car for business purposes. Yep, it's part of the new tax law called One Big Beautiful Bill Act. And for a lot of folks, this could mean more money back in your pocket when you file your taxes. Under the old rules, car loan interest was only deductible if you used your vehicle for business or if you were self employed. But under the new tax law, that's changing. Beginning with 2025 tax year, individuals can now deduct up to $10,000 per year in interest paid on a car loan, as long as the vehicle meets one big requirement, it has to be assembled in the United States. So if you're financing a vehicle that was built in the United States, whether it's a Ford, a Chevy, a Tesla, or any other eligible make, you could claim a deduction for the interest you're paying on that loan, even if you're just using the car for regular personal driving. Now, this deduction is per tax return, not per vehicle. So if you have two US Assembled vehicles in the household, you can still only deduct up to $10,000 in total car loan interest in each year.
