The OBBB Act adds a new deduction for the interest paid on qualifying auto loans, available through 2028. Taxpayers may deduct up to $10,000 in interest when purchasing a new vehicle, provided the car undergoes final assembly in the United States.
The deduction phases out for:
Individuals earning over $100,000
Married couples earning over $200,000
While the benefit may reduce borrowing costs for many taxpayers, the income limits and U.S.-assembly requirement mean not all buyers will qualify. Those considering a new purchase between now and 2028 may find this provision particularly valuable, especially if they are financing a new vehicle with higher interest rates.
Sources 1. Congress.gov, July 4, 2025 2. Internal Revenue Service, July 25, 2025. 3. Internal Revenue Service, July 25, 2025.