The deduction covers interest on a new, personal-use vehicle with final assembly in the United States, on a loan secured by the vehicle and originated after December 31, 2024. Not sure where your vehicle was assembled? Check the VIN with the NHTSA VIN decoder linked in the result.
Enter your filing status, modified AGI, car loan interest paid, loan origination date, vehicle use, and final-assembly answer to estimate your car loan interest deduction for 2025 through 2028.
About the car loan interest deduction estimator
The car loan interest deduction estimator shows how much of your car loan interest you may be able to deduct on your federal return. Pick your filing status, enter your modified adjusted gross income (MAGI) and the interest you paid, confirm your loan date, vehicle use, and where the vehicle was assembled, then see an estimated deduction already capped at the legal maximum and reduced for the income phaseout.
The deduction comes from the One Big Beautiful Bill and applies to tax years 2025 through 2028. It covers up to $10,000 of interest per year on a loan used to buy a qualified vehicle. The vehicle must be new (its original use begins with you), built with final assembly in the United States, bought for personal use, and the loan must be secured by a lien on the vehicle and originated after December 31, 2024. The maximum is reduced by $200 for every $1,000 of MAGI above $100,000 for non-joint filers or $200,000 for married filing jointly, reaching $0 at $150,000 and $250,000. The deduction is available whether or not you itemize, and you must report the vehicle identification number (VIN) on your return. This is a planning estimate, not tax or financial advice. Confirm your numbers with a tax professional.
How to use
- Select your federal tax filing status: single or head of household, or married filing jointly.
- Enter your modified adjusted gross income (MAGI).
- Enter the car loan interest you paid during the tax year.
- Enter the loan origination date, then confirm the vehicle is for personal use and whether its final assembly was in the United States.
- Select Estimate car loan interest deduction to see your deduction.
Worked examples
Single, $80,000 MAGI, $3,000 interest, 2025 loan, personal use, US assembly: $3,000 deduction
Interest below the $10,000 cap and MAGI below the $100,000 phaseout, so the full interest is deductible.
Single, $90,000 MAGI, $12,000 interest: $10,000 deduction
Interest above the cap is limited to the $10,000 annual maximum.
Loan originated in 2024, or a business-use or non-US-assembled vehicle: $0 deduction
Loans before 2025, business or mixed use, and vehicles assembled outside the United States are not eligible.
Frequently asked questions
- What is the car loan interest deduction?
- It is a federal deduction created by the One Big Beautiful Bill for tax years 2025 through 2028. It lets eligible buyers deduct up to $10,000 of interest per year on a loan used to buy a qualified new, personal-use vehicle that had its final assembly in the United States. It is available whether or not you itemize, and your actual benefit depends on your full tax return.
- How much car loan interest can I deduct?
- The maximum deduction is $10,000 of interest per year. The deduction cannot exceed the interest you actually paid, and it is reduced by the income phaseout. Interest above $10,000 is not deductible under this provision.
- How does the income phaseout work?
- The maximum deduction is reduced by $200 for every $1,000 (rounded up) that your modified adjusted gross income exceeds $100,000 for non-joint filers or $200,000 for married filing jointly. The deduction reaches $0 once MAGI hits $150,000 (non-joint) or $250,000 (joint). This tool applies that reduction to the cap before comparing it to your interest paid.
- Which vehicles and loans qualify?
- The vehicle must be a car, minivan, van, SUV, pickup, or motorcycle with a gross vehicle weight rating under 14,000 pounds, new (its original use begins with you), assembled in the United States, and bought for personal use. The loan must be secured by a lien on the vehicle and originated after December 31, 2024. Leases and refinances of pre-2025 loans generally do not qualify.
- How do I confirm where my vehicle was assembled?
- Final assembly location is tied to the vehicle identification number (VIN). You can check it with the NHTSA VIN decoder, which the tool links in every result. Only vehicles with final assembly in the United States qualify, and you must report the VIN on your return for any year you claim the deduction.
- Does this calculator give tax advice or store my numbers?
- No. It is a planning estimate based on the published federal rules, and it is not tax or financial advice. The calculation runs entirely in your browser. The tool does not collect your name, VIN, loan documents, lender details, or any income data, and it does not save the values you enter.
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