Who Qualifies for the Car Loan Interest Deduction?

To deduct your auto-loan interest, every rule below must be met. Miss one and the interest isn’t deductible. Here’s the full checklist with the source for each.

Requirement	What it means	Source
New vehicle	“Original use” must begin with you. Used vehicles never qualify; if a dealer titled/registered it first, it’s disqualified.	IRS CALT
U.S. final assembly	The vehicle’s final assembly must be in the United States. Brand doesn’t decide it — check the VIN.	IRS
Loan after Dec 31, 2024	The loan must be originated in 2025 or later. A pre-2025 loan never qualifies.	IRS guidance
First lien	The loan must be secured by a first lien on the vehicle. An unsecured personal loan or HELOC doesn’t count.	proposed reg
Personal use (>50%)	Primarily personal-use; commuting counts as personal. Business use is deducted elsewhere.	IRS Thomson Reuters
Vehicle type & weight	Car, minivan, van, SUV, pickup, or motorcycle, under 14,000 lbs GVWR. EVs qualify if U.S.-assembled; RVs don’t.	IRS CALT
Not a lease	Lease payments are excluded. More	IRS
Not a related-party loan	A loan from a relative, or a business you own/control, is excluded.	CALT
Income under the cap	Phases out above $100k (single) / $200k (joint) MAGI. Details	IRS

Good news: you do not have to itemize. This deduction works on top of the standard deduction. IRS guidance

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Not disqualifying, despite common myths: buying from a private seller (the loan rules still apply), or financing add-ons like a service contract, sales tax, or dealer fees (those count). But negative equity rolled in from a trade-in does not qualify. proposed reg

Who qualifies for the car-loan interest deduction