Starting in 2025, a new federal tax deduction could make it easier for buyers to bring home a brand-new American-built car, truck, or SUV.
The deduction allows eligible buyers to write off up to $10,000 in annual auto loan interest on new personal-use vehicles assembled in the United States. The benefit applies to purchases made between 2025 and 2028, offering an incentive for buyers to choose vehicles built on American soil.
To qualify, single filers must earn less than $100,000 per year, while joint filers must earn less than $200,000. The deduction phases out for higher-income households and does not apply to pre-owned or commercial vehicles.
While the average savings may amount to only a few hundred dollars annually, the new rule provides dealerships with a meaningful way to promote U.S.-assembled vehicles and reinforce the value of American manufacturing, thereby bolstering consumer confidence.
For drivers, it is one more reason to consider where your next new vehicle was built before signing that purchase agreement.
Source: Kiplinger — “New Tax Break for Auto Loans Could Save Some Buyers Thousands of Dollars”