How to Calculate Car Loan Interest Deduction
Up to $10,000 of interest on a US-assembled new vehicle is deductible. See how much of yours qualifies.
How this number is built
Calculating it yourself
Step 1
Check final assembly location using the VIN — the NHTSA VIN decoder shows the plant country.
Step 2
Confirm the vehicle is new to you; used purchases are excluded regardless of the loan date.
Step 3
Confirm the loan originated after 31 December 2024, and that it is secured by the vehicle.
Step 4
Take the interest actually paid this calendar year, not the total over the loan.
Step 5
Apply the $10,000 cap, then reduce by $200 for every $1,000 of MAGI above your threshold.
What people ask next
Does refinancing keep the deduction?
Refinanced loans can qualify, but the original loan must still meet the origination-date and vehicle rules. Check the current IRS guidance for your situation.
Does a lease qualify?
No. The deduction applies to interest on a loan secured by a vehicle you own, not to lease payments.
Searches this page answers
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