Are you planning to buy a new car this year? If so, there’s an exciting new car loan tax deduction that could save you money and make your next vehicle purchase more affordable. This is especially important for anyone who financed a new car in 2025 or plans to in 2026.

Thanks to a recent change in U.S. federal tax law, you can now deduct up to $10,000 per year in interest on a new car loan. This applies whether or not you itemize your taxes* and is available for vehicles purchased from 2025 through 2028.

 

Does Your Vehicle Qualify?

If you want to take advantage of this deduction, your car loan and vehicle will need to meet these requirements:

                  1. The loan was signed after January 1st, 2025.

                  2. The vehicle must be new and for personal usage only (not used or commercial).

                  3. The loan is secured by the vehicle (personal loans do not qualify).

                  4. The vehicle underwent final assembly in the U.S.

                    • You can check your VIN using the NHTSA VIN decoder here.

There are also income limits: the deduction decreases if your modified adjusted gross income exceeds $100,000 for individual filers, or $200,000 for joint filers.

 

 

How Much Can You Save?

Let’s say you finance a $35,000 new car through Scenic Community Credit Union and pay $2,800 in interest in 2025. If your vehicle qualifies and your income is under the limit, you could deduct the full $2,800 from your taxable income! That’s roughly $616 in tax savings for the average U.S. taxpayer – and up to $10,000 in interest can be deducted annually through 2028.

And if you pay more interest in future years (up to $10,000 annually), you will continue to deduct it through 2028.

Buying a car is a big financial decision, and every deduction helps. This new tax benefit lowers the cost of borrowing while supporting domestic manufacturing. It's a win for your wallet and a reminder that where your car is assembled matters.

 

 

How Scenic Community Credit Union Can Help

If you're planning to buy a new car, or purchased one in 2025, SCCU is here to make the process smooth and affordable with:

  • Competitive auto loan rates with predictable monthly payments 

See Rates         Apply Today

  • Tax-season perks for members
    • TurboTax: 20% discount on federal products for filing
    • H&R Block: Save up to $25 on professional tax preparation
TurboTax          H&R Block
 
 
 
 

Whether you’re a 2025 car buyer or planning a 2026 purchase, SCCU helps you maximize your savings and make informed decisions. Get your next car loan with us and take advantage of exclusive member benefits for tax filing too.

 

*For all tax matters, please consult a certified tax advisor.

 

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