New Tax Laws Impacting Car Loan Deductions and American-Built Vehicles
The new temporary tax deduction for interest on car loans, applicable for purchases from 2025 to 2028, is limited to new, US-assembled vehicles for personal use, with a cap of $10,000 on interest deductions and income-based restrictions that may limit benefits for higher earners. The deduction excludes loans from family, leasing, or used vehicles, and is unlikely to benefit those with higher tax rates or low tax liabilities. The actual benefit may be modest, especially considering potential vehicle price increases due to tariffs.