American-Made Car Tax Deduction 2025: Save on US Auto Loans
The New American-Made Auto Tax Deduction
A comprehensive guide to the "One Big Beautiful Bill Act" provision allowing you to deduct up to $10,000 in auto loan interest for new, U.S.-assembled vehicles from 2025-2028. At Ron Westphal Chevrolet, most of our new Chevy models qualify for this tax interest rebate, and we're here to help you understand how it works!
Estimate Your SavingsSHOP INVENTORY$10,000
Max Annual Deduction
Deduct up to $10,000 of interest paid on your auto loan each year.
2025-2028
Effective Years
This temporary deduction applies to qualifying vehicles purchased in these years.
No Itemizing
Above-the-Line Deduction
Claim this benefit even if you take the standard deduction on your taxes.
Am I Eligible?
This section helps you quickly determine if you and your vehicle might qualify for the new auto loan interest deduction. Answer a few simple questions to get a preliminary assessment based on the law's key requirements.
Eligibility Checker
Check VIN (starts with 1, 4, or 5). See list.
Fill out the form to see your potential eligibility.
How Much Could I Save?
This interactive calculator provides an estimate of your potential tax savings. Enter your loan details to see a personalized breakdown and a chart visualizing your savings over the four-year life of this tax deduction. Remember, this can be used in addition to all other substantial discounts and Chevy incentives offered at Ron Westphal Chevrolet!
Savings Calculator
Estimated First-Year Tax Savings:
$0
Based on an estimated first-year interest payment of $0.
Chart shows estimated annual tax savings for 2025-2028. Savings typically decrease each year as more of your payment goes toward principal.
Find a Qualifying Vehicle
The most important rule for this deduction is that the vehicle must have its final assembly in the United States. Use the tool below to search and filter a list of common models that meet this requirement. Always confirm with the dealer and check the vehicle's VIN (should start with 1, 4, or 5).
| Manufacturer | Model | Assembly Location(s) |
|---|
How to Claim Your Deduction
Claiming the deduction is a straightforward process you'll handle when you file your annual taxes. Here is a simple step-by-step guide to ensure you have everything you need to successfully claim this benefit.
1
Verify and Purchase
When buying, confirm the vehicle is new and U.S.-assembled. The final assembly location is on the window sticker, and the VIN should start with a 1, 4, or 5. Purchase the vehicle between Jan 1, 2025, and Dec 31, 2028.
2
Secure Your Loan
Finance your purchase with a loan secured by the vehicle. Keep your loan agreement and all related documents. Personal loans or other unsecured financing do not qualify.
3
Get Your Interest Statement
At the end of the tax year, your lender will provide a statement (like Form 1098 or a similar year-end summary) showing the total amount of interest you paid during the year.
4
File Your Taxes
When you file your federal income tax return (Form 1040), you will claim the deduction. It is an "above-the-line" deduction, so you don't need to itemize. You will need to report the vehicle's VIN on the relevant IRS form.
Frequently Asked Questions
This is a deduction for loan interest, not a credit on the purchase price. It applies to any new, U.S.-assembled vehicle (gas, hybrid, or EV). The old EV tax credit was a direct reduction of your tax liability, only for specific electric vehicles, and is being terminated after September 30, 2025, by the same law that created this deduction.
No. This is a key benefit. It is an "above-the-line" deduction, which means it reduces your Adjusted Gross Income (AGI). You can claim it even if you take the standard deduction.
No. The law is very specific: the deduction is only for new vehicles that are purchased (not leased) for personal use.
Your maximum allowable deduction is reduced. The deduction amount decreases by $200 for every $1,000 your Modified Adjusted Gross Income (MAGI) is over the threshold ($100k for single, $200k for joint). For example, a single filer with a $110,000 MAGI would see their potential deduction reduced by $2,000.