Taxbee | Tax & Accounting ServicesIf you bought a new applicable passenger vehicle for your own personal use after December 31, 2024, your vehicle qualifies for the car loan interest deduction if the vehicle went through final assembly in the United States. You’ll need the vehicle identification number (VIN). The interest must be paid on a loan that meets the following requirements:
- Originated after December 31, 2024
- Used to purchase a new vehicle where you’re the first owner (used vehicles don’t qualify)
- Used to purchase a vehicle for personal use (not solely for business or commercial use; mixed use is fine)
- Secured by a lien on the vehicle
What is an applicable passenger vehicle for the car loan interest deduction?
An applicable passenger vehicle must meet the following requirements:
- Be primarily for use on public streets, roads, and highways
- Have at least 2 wheels
- Be a car, minivan, van, SUV, pickup truck, or motorcycle less than 14,000 pounds
- Be treated as a motor vehicle for purposes of title II of the Clean Air Act
- Have undergone final assembly in the United States
How do I know if my vehicle underwent final assembly in the United States?
The IRS lists a couple ways to find out if your new vehicle underwent final assembly in the United States:
- The location of final assembly should be listed on the vehicle information label attached to each vehicle on a dealer’s premises.
- You can also use the Vehicle Identification Number (VIN). VINs starting with the numbers 1, 4, and 5 are manufactured in the United States.The National Highway Traffic Safety Administration (NHTSA) has a VIN decoder to let you know what your VIN means, including where the vehicle was manufactured.