407-344-1012 
July 18, 2025 
123 views
📢 New 2025 Car Loan Tax Deduction Just Announced!
In this video, we explain how the 2025 Car Loan Interest Tax Deduction works under the One Big Beautiful Bill Act (H.R. 1) signed into law by President Trump. This powerful new tax benefit allows individuals to deduct up to $10,000 annually in car loan interest on qualifying U.S.-assembled vehicles.
🚗 At the end of the video, we reveal the full list of 119 eligible cars that qualify for this deduction — don’t miss it.
🔍 What you’ll learn in this video:
- What the 2025 car loan interest deduction is
- Who qualifies and what vehicles are eligible
- Key requirements under the new tax law
- How to claim this deduction on your tax return
- Full list of 119 qualifying vehicles
💰 If you’re planning to buy a car in 2025, this tax law could save you thousands!
👉 Watch until the end to see if your car qualifies.
☎️ CONTACT US
Phone: 407-344-1012
Email: [email protected]
😃 FOLLOW US ON SOCIAL MEDIA
🔗 OUR WEBSITES
Explore our range of services tailored to meet your needs:
- Freedom Group – https://freedomgroupfl.com/
- Freedomtax Accounting – https://freedomtaxaccounting.com/
- Freedom Insurance – https://freedominsurancefinancial.com/
- Freedom Immigration – https://freedomimmigrationusa.com/
⚠️ DISCLAIMER
This video is intended for education purposes and should not be taken as legal, financial or tax advice. You should consult with a professional about your unique situation before acting on anything discussed in these videos. Freedomtax Accounting and Multiservices Inc., Freedom Insurance Financial Inc., Freedom Realty Source Inc., and Freedom Immigration International Inc. are providing educational content to help small business owners and individuals become more aware of certain issues and topics, but it cannot give blanket advice to a broad audience. Things are always changing, therefore, this channel may not contain the most up-to-date information. Neither Freedomtax Accounting and Multiservices Inc., Freedom Insurance Financial Inc., Freedom Realty Source Inc., and Freedom Immigration International Inc. nor its members can be held liable for any use or misuse of this content.
TRANSCRIPTION
Hello from Freedom Tax Accounting. We’re an accounting firm where we have been providing quality tax and accounting services now for over 20 years. In this video, we’re going to talk about the details of the new car loan interest tax deduction.
As many of you know, President Trump on the 4th of July of 2025 signed the new beautiful, one big beautiful bill. This new bill has over a hundred new tax provisions. But in this video, we are going to only discuss in detail that taxpayers now will be able to deduct the interest that they pay on their car loans.
Now, this new tax law has many requirements. Not every vehicle is eligible. And at the end of this video, we’re going to provide a list of 119 vehicles that are eligible for taxpayers to get this new car loan interest tax deduction.
So let’s go. Okay. So as I said, we are going to discuss the new car loan interest tax deduction.
It’s a new tax law. It’s going to be effective this year, 2025. All right.
And this is what we’re going to talk about. We’re going to talk about the details of the new vehicle interest tax deduction. We are going to provide the requirements that the vehicles need to comply with in order to qualify for this new tax deduction.
Also, the auto loan also has requirements. We’re going to discuss in detail all the requirements that the auto loan must meet in order to take this new tax deduction. And at the end, as I said, we’re going to give you a list of 119 vehicles that qualify.
You’re going to be surprised at the vehicles that do qualify because there’s many misconceptions around what vehicles apply and which ones don’t apply. Okay. So let’s talk about five details of the new auto loan tax deduction.
All right. Number one, the tax deduction amount. The tax deduction is up to $10,000 per year of interest paid in accrued unqualifying loans.
So for example, if for one tax year, you pay $11,000 in car loan interest for that tax year, you will only be able to take up to $10,000 of that. But if that tax year, you only paid $5,000 in car loan interest, you will be able to deduct that $5,000. So it’s up to $10,000.
Okay. Now what tax years are eligible? This tax deduction is going to be eligible for car loans in the tax years 2025, 2026, 2027, and 2028. So basically it’s only these four years.
What does that mean? That if you have a car loan that you started paying that car loan before 2025, you are not eligible to take the tax deduction. So basically it has to be a car loan that started at least in 2025. Okay.
So basically a new car loan. All right. Also, let’s say that you get a car loan in 2025, but your car loan is seven for seven years.
So technically you’re going to end up paying that car loan in 2032. So you’re only going to be eligible to take the tax deduction on the interest that you pay from 2025 to 2028. Since your car loan goes all the way to 2032, the interest that you pay from 2029 to 2032 will not be eligible for the tax deduction.
And once again, maybe in 2028, this may change. They may extend it, but know that you will only be able to deduct from your taxes the interest paid during these four years. It doesn’t matter if your car loan exceeds these four years, you’re only going to be able to deduct the interest within these four years, 2025 up to 2028.
Okay. And remember the car loan must start in 2025, in 2026, 2027, or 2028. So if you have an old car loan before 2025, you will not be able to deduct any interest.
And if you get a vehicle in 2027, so you will only be able to deduct the interest from 2027 and 2028. So I hope you understand that. Now, number three, it has a phase out according to income.
So the deduction is going to be reduced by $200 for each $1,000 by which the taxpayer’s modified adjusted gross income exceeds $100,000. Or if you’re filing joint, then $200,000. Okay.
So if you are single and your MAGI, your modified gross income, if you’re single and you make less than $100,000 a year, you don’t have a phase out in the deduction. You can deduct the full amount of the interest. Okay.
But if you’re single and you make over $100,000, for each $1,000 over $100,000, the tax deduction of the interest is going to be reduced by $200. Okay. For each $1,000 or fraction.
But if you’re a married filing joint, then you have until $200,000. If you make over $200,000 and you’re married filing joint, then every $1,000 over $200,000, then the tax deduction gets reduced by $200 for each $1,000 or fraction. Okay.
Now, what’s the complete phase out? Okay. The deduction is fully phased out if you’re making $150,000 single or $250,000 joint. So if you’re single and you’re making over $150,000, you won’t be able to take the deduction.
If you’re married filing joint, if you’re making a modified adjusted gross income of $250,000, then the deduction is going to phase out and you won’t be able to take it. All right. Now, number four, it is above the line deduction and this is good news.
Okay. What does that mean? That you’re able to take the deduction of the interest that you pay on your car loan, even if you take the standard deduction. Okay.
So this is good. All right. So this is good news.
And number five, information reporting. The auto loan lenders are going to have to file some informational returns to the IRS, similar to what happens with mortgage loans. The mortgage loan lender has to send a report to the IRS and to you with the amount of interest that you paid for that tax year.
And you’re going to use that documentation to report the interest and take the deduction on your tax return. All right. Now let’s talk about the seven requirements for vehicle qualification.
Now the vehicles must meet all of the seven criterias. It’s not one of seven. Every vehicle to be eligible to take this new interest tax deduction, then they must meet all seven requirements.
Number one, it needs to be original use. The original use of the vehicle must commence with the taxpayer. So that means it must be a new vehicle.
It cannot be used, cannot be pre-owned. The first owner of that vehicle must be the taxpayer. All right.
So it has to be a new vehicle that you get a loan for in 2025, 2026, 2027 or 2028. Cannot be used or pre-owned. Number two, it must be manufactured for public roads.
The vehicle must be manufactured primarily for use on public streets, roads, and highways. Vehicles operated exclusively on rails are excluded. So that’s part of the tax law.
Requirement number three, the amount of wheels. It must have at least two wheels. Okay.
Vehicle type. This is requirement number four. Eligible vehicles includes cars, minivans, vans, SUVs, pickup trucks, or motorcycles.
Number five, it must be treated as a motor vehicle for the purposes of Title II of the Clean Air Act. Requirement number six, the weight limit. The gross vehicle weight rating, that’s called the GVWR, has to be less than 14,000 pounds.
And number seven, this is very important, U.S. final assembly. The final assembly of the vehicle must occur within the United States. And this is where most of the confusion is coming from, because people think, and I’ve heard influencers in TikTok and Instagram say that only American brand cars are eligible for this new deduction, and that is false.
The parts can be made anywhere in the world. It can be a foreign brand from Japan or Europe. But if the final assembly is in the United States, the car is eligible for this tax deduction.
All right? So that’s the tax law. Now, those are the seven requirements for the vehicle. Let’s talk about the six requirements of the auto loan itself.
Number one, the loan origination date. The loan must be incurred by the taxpayer after December 31st, 2024. And I know this is kind of confusing, but that’s the language that the IRS uses.
Basically, the loan has to be started at least by January 1st of 2025. All right? So the loan must start 2025, 2026, 2027, or 2028. All right? Any loan before that is not eligible to take the car loan interest tax deduction.
Number two, secured by the vehicle. The loan must be secured by a first lien on the applicable passenger vehicle. Number three, personal use.
The vehicle must be for personal use. It cannot be a fleet car, it cannot be a commercial car, and it cannot be a lease. It has to be a purchase.
You cannot be leasing a car because it will not be eligible to take the car loan interest tax deduction. Number four, VIN reporting. The taxpayer must include the vehicle identification number of the vehicle on the tax return for the year the deduction is claimed.
It’s pretty easy, the VIN number is in the car. And the personal tax return is going to a place where you can put the VIN number. Number five, loan exclusions.
What type of loans are not eligible to take the car loan interest deduction? Here we can see it’s loans for fleet sales, so it cannot be a fleet vehicle. Loans for commercial vehicles not used for personal purposes. Lease finances, only purchases, it cannot be a leased car.
Loans for vehicles with a salvaged title or intended for scraps. And loans from related parties. These type of loans will not be eligible for the new car loan interest tax deduction.
Number six, refinancing. Yes, refinancing of a qualifying loan is permitted but only to the extent that the new loan does not exceed the principal amount of the original qualifying loan and is secured by a first lien on the same vehicle. So that’s the rule if you want to refinance the loan during that time period.
Now let’s talk about the list of 119 cars that are eligible. Now the list is on our website. I’m going to put the direct link to that website and that list on the description of this video.
But you have to go to our website freedomtaxfl.com. So if you go to our website, this is our website, let me shrink myself. You go to our website and on the navigation you basically click news. So you click news, that’s going to take you to our blog.
So here you can see there’s a blog post called car loan interest tax deduction full list of qualifying vehicles. You click on that blog and there’s some information at the beginning. But then you’re going to see this is the list of 119 vehicles and it’s in alphabetical order according to the brand.
And as you can see there’s some Japanese and European cars here because these cars are assembled here in the U.S. So here you can see the Acuras, the BMWs. Interesting that Buick is an American brand and they only make one of those models in the U.S. Here you see the Cadillacs, Chevrolets, Dodge, only one vehicle applies for Dodge. All the Ford cars, interestingly the Ford Bronco Sport and the Ford Mustang, the Mack E, those are made in Mexico.
So those cars aren’t eligible for the tax credit. Here you can see the GMCs, the Hondas, the Hyundais, the Jeeps, the Kias, Lexus, Lincoln, Mercedes, Nissan, Subaru, Tesla, Toyota has many vehicles that they make here, Volkswagen and Volvo. So there you go, that is the list of all the qualifying vehicles and now you know all the details that you need to know in order to take that new vehicle interest tax deduction.
All right, hopefully this video has been valuable for you. If you have received good information in this video, please like it and share it with someone else that can take advantage of this information. Once again, thank you for watching and God bless you.
Bye-bye. – End of transcription
Summary
A major change to tax law in 2025 allows car buyers to deduct interest paid on qualifying auto loans—up to $10,000 per year. In this Freedom Tax Accounting video, we break down everything you need to know about the new federal vehicle interest deduction, who qualifies, and which 119 vehicles make the cut.
New Tax Break for Vehicle Owners
In July 2025, President Trump signed a sweeping tax reform bill featuring more than 100 provisions. One of the most impactful for consumers? The vehicle loan interest deduction, which allows taxpayers to deduct the interest on new personal-use car loans taken between 2025 and 2028.
Interesting Fact: Only vehicles assembled in the United States qualify for this new interest deduction—even if the brand is foreign.
Deduction Limit and Time Frame
The deduction covers up to $10,000 in interest per tax year for eligible auto loans. However, only interest paid between 2025 and 2028 qualifies. If your loan began before 2025, you’re out of luck. And if it runs past 2028, interest paid beyond that date won’t be deductible.
The deduction is above-the-line, meaning you can claim it even if you take the standard deduction.
Income Phase-Out Rules
There are limits based on income:
- Single filers: Deduction begins phasing out at $100,000 MAGI, and disappears at $150,000.
- Married filing jointly: Phase-out starts at $200,000 and ends at $250,000.
For every $1,000 over these thresholds, the deduction decreases by $200. So high earners will see limited or no benefit.
Seven Requirements for Vehicle Eligibility
To qualify, the vehicle must:
- Be brand new—first ownership must begin with the taxpayer.
- Be built for public road use.
- Have at least two wheels.
- Be a car, minivan, van, SUV, truck, or motorcycle.
- Be treated as a motor vehicle under the Clean Air Act Title II.
- Weigh under 14,000 pounds (GVWR).
- Be finally assembled in the U.S.
This final assembly rule means some foreign-branded vehicles qualify, while some American brands don’t. For instance, the Ford Bronco Sport and Mustang Mach-E are made in Mexico and don’t qualify.
Six Requirements for the Auto Loan
Not just any car loan qualifies. To take the deduction:
- The loan must begin after December 31, 2024 (i.e., 2025 or later).
- The loan must be secured by a first lien on the car.
- The car must be for personal use only—no commercial or leased vehicles.
- You must report the VIN on your tax return.
- The loan cannot be from a related party or used for fleet, salvaged, or scrap vehicles.
- Refinancing is allowed, but only if the new loan doesn’t exceed the original amount and is still secured by the same vehicle.
Auto lenders will be required to report interest paid to the IRS, similar to mortgage interest reporting. This ensures you receive a year-end statement for accurate tax filing.
Full List of 119 Qualifying Vehicles
Freedom Tax has published a full list of 119 qualifying vehicles on its website. This list is based on final assembly location and includes models from:
- Foreign brands like Toyota, Honda, Subaru, Volkswagen, Kia, Lexus, and BMW
- U.S. brands like Chevrolet, Ford, GMC, Jeep, and Tesla
Surprisingly, some Buick and Dodge models don’t qualify due to their assembly locations abroad.
What This Means for Taxpayers
This new deduction can significantly reduce taxable income for middle-class Americans purchasing personal vehicles between 2025 and 2028. If you’re planning to buy a car, now’s the time to pay attention to where it’s assembled—and how you finance it.
Freedom Tax Accounting can help you:
- Review your car purchase for deduction eligibility
- Ensure your loan structure meets IRS requirements
- Claim the deduction properly on your return
