New Tax Law Offers Auto Loan Interest Deduction | JQJO

A new tax law allows a deduction of up to \$10,000 annually on interest paid for new, US-assembled vehicles from 2025-2028. This applies to personal use only, excluding fleets or commercial vehicles. Income limitations exist, phasing out for individuals earning between \$100,000 and \$150,000, or joint filers between \$200,000 and \$250,000. An estimated 3.5 million new vehicle loans could qualify. While some believe it will boost sales, others are skeptical, noting the average annual savings may be less than a monthly payment. The deduction could also impact state income taxes.