Car Loan Interest Deduction Calculator
For the first time in decades, personal car loan interest is deductible — up to $10,000 a year through 2028, if your vehicle passes five tests. Check your eligibility and see the real multi-year math for your loan.
Your Loan
Deduction window: 2025–2028
Phaseout starts at $100,000 ($200,000 married filing jointly)
Vehicle & loan eligibility
Total deductible interest (2025–2028)
$6,179
≈ $1,359 in federal tax savings at your 22% rate
Year by year
Payment: $767/mo$4,060 of interest falls after 2028, when the deduction ends under current law.
Frequently Asked Questions
Which vehicles qualify for the car loan interest deduction?
New cars, minivans, vans, SUVs, pickups, and motorcycles under 14,000 lbs GVWR, purchased for personal use, with final assembly in the United States. Used and certified pre-owned vehicles do not qualify, and neither do leases. Brand nationality is irrelevant — a Toyota Tundra built in San Antonio qualifies while some "American" models assembled in Mexico or Canada do not. Check the vehicle information label on the driver's side door jamb.
How much car loan interest can I deduct?
Up to $10,000 of interest per year for tax years 2025 through 2028. The deduction phases out by $200 for every $1,000 of modified AGI above $100,000 (single) or $200,000 (married filing jointly) — fully gone at $150,000 / $250,000.
Do I need to itemize to claim it?
No. The deduction is claimed on Schedule 1-A on top of the standard deduction. You will need the vehicle's VIN on your return, and starting with tax year 2026 your lender sends Form 1098-VLI showing the interest you paid.
Does refinancing kill the deduction?
No — refinancing a qualifying loan keeps the deduction, but only up to the remaining principal of the original loan. Cash-out amounts beyond that balance do not generate deductible interest.
What if I use the car partly for business?
This deduction is for personal-use vehicles. If you use a vehicle in your business, the business deduction (standard mileage or actual expenses) is usually worth far more — but you cannot claim both on the same use. Run our Vehicle Deduction calculator to compare.
When does this deduction end?
After tax year 2028, unless Congress extends it. Interest paid in 2029 and later is not deductible under current law, even on a loan that qualified earlier.
Using the vehicle in your business? The business deduction usually beats this one — compare with the Vehicle Deduction calculator →
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