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National Auto Dealers Association (NADA)Apr 9, 2026 4:11:38 PM1 min read

Tax Deductions Can Save Consumers Money on New Cars

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Many Americans can take advantage of a new tax deduction for auto loans on qualified vehicles. This tax season, NADA is reminding dealers about these savings, which last through 2028.

PARTNER SPOTLIGHT

A provision in the One Big Beautiful Bill allowed individuals earning up to $100,000 and married couples earning up to $200,000 to deduct up to $10,000 in interest on new car loans every year through 2028. To qualify for this deduction, the vehicle must be new, for personal use, and assembled in America. Customers and dealers can use the government’s VIN decoder website to find where a vehicle was assembled. Qualifying taxpayers can claim the deduction when they file their return with the IRS, using loan information provided by the lender. No extra paperwork is needed from the dealer. This deduction is available for both itemizing and non-itemizing taxpayers.

Making sure new vehicles are affordable is a priority for dealers and customers alike. This auto loan deduction is one federal policy aimed at reducing the effective monthly cost of a new car.

Because the tax code can be a little confusing, we created this graphic to illustrate the deduction and how it can be used.

More Info:

The foregoing is offered for informational purposes only and is not intended as tax or accounting advice. Please contact the NHADA CPA Partners with any questions.

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National Auto Dealers Association (NADA)

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