Overview
- The draft rules implement a deduction of up to $10,000 in car loan interest for brand-new vehicles assembled in the United States, applying to loans taken after Dec. 31, 2024 and available for tax years 2025 through 2028.
- Qualifying vehicles must be under 14,000 pounds and include cars, SUVs, pickups, vans, minivans or motorcycles, and the loan must be secured by the vehicle with the VIN provided when filing.
- To confirm eligibility, buyers would use the vehicle information label showing final assembly location or run the VIN through the National Highway Traffic Safety Administration database, under the proposal.
- For 2025, lenders may satisfy reporting by providing borrowers the total interest paid via their website or app, with a formal IRS information form required starting in 2026 under the proposed rules.
- Independent analysis cited in the coverage estimates a roughly $31 billion cost over ten years, with modest per-buyer savings and phaseouts starting at $100,000 for single filers and $200,000 for married filers.