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New Federal Tax Deduction

You May Be Eligible to Deduct Up to $10,000 in Annual Auto Loan Interest*

Qualified buyers may be able to deduct interest paid on eligible auto loans for certain new personal-use vehicles assembled in the United States.

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What It Means for Car Buyers

Auto Loan Interest May Now Be Tax Deductible for Qualified Buyers

The One Big Beautiful Bill introduced a temporary federal tax deduction for qualified passenger vehicle loan interest. For eligible buyers, this may help reduce taxable income when financing a qualifying new vehicle for personal use.

Consult your tax, legal, or accounting professional if you have questions. This information does not constitute tax, accounting, or legal advice.

Key Highlights

The deduction may apply to qualified interest paid from 2025 through 2028, subject to vehicle, loan, income, and personal-use requirements.

Up to $10,000

Eligible taxpayers may be able to deduct up to $10,000 per year in qualified auto loan interest.

2025–2028 Tax Years

The deduction is temporary and applies to qualified interest paid during tax years 2025 through 2028.

New Personal-Use Vehicles

The loan must generally be for a new qualifying vehicle used for personal purposes. Used vehicles, leases, and commercial/fleet purchases do not qualify.

Frequently Asked Questions

Auto Loan Interest Deduction FAQs

Here are common questions about eligibility, timing, income limits, and qualifying vehicles.

The law created a temporary federal tax deduction for qualified vehicle loan interest. Eligible buyers may be able to deduct interest paid on qualifying auto loans for new personal-use vehicles that meet specific requirements.
  • Qualified buyers may be able to deduct up to $10,000 per year in eligible auto loan interest.
  • The deduction applies to qualified interest paid during tax years 2025 through 2028.
  • The vehicle must meet eligibility rules, including final assembly in the United States.
  • The loan must be for a new personal-use vehicle and must be secured by a lien on the vehicle.
  • Lease payments do not qualify.
The program allows eligible taxpayers to deduct up to $10,000 in annual qualified passenger vehicle loan interest for qualifying vehicles. The deduction may apply whether the taxpayer itemizes or takes the standard deduction, subject to IRS rules and eligibility requirements.
The benefit begins to phase out for taxpayers with modified adjusted gross income over $100,000 for single filers or $200,000 for married taxpayers filing jointly. Other eligibility requirements also apply.
The loan must generally be used to purchase a new qualifying personal-use vehicle, originated after December 31, 2024, and secured by a lien on the vehicle. Commercial, fleet, lease, and certain refinancing situations do not qualify.
The deduction applies to qualified interest paid in tax years 2025 through 2028. The loan must be new debt contracted after December 31, 2024. Refinancing debt incurred before December 31, 2024 generally does not qualify.
No. This is not a dealership rebate or instant discount. Eligible customers must claim the deduction when filing their federal tax return.
Keep detailed loan and payment records. If more than $600 in interest is paid, lenders are expected to provide a statement by January 31 of the following year.
Yes. The deduction may apply whether an eligible taxpayer itemizes deductions or takes the standard deduction.
No. The deduction is for qualified personal-use vehicle loans. Business, commercial, and fleet purchases do not qualify under this consumer deduction.
Eligibility depends on final assembly location and other IRS requirements. Some Kia models may include U.S.-assembled versions such as Telluride, Sorento, Sportage, K5, EV6, and EV9. Availability and eligibility can vary by model year, trim, VIN, and assembly location. Contact Hayward Kia for details.
No. Lease payments do not qualify for this deduction.
No. The deduction applies to qualifying new vehicles where the original use begins with the taxpayer.
You can visit the IRS website or consult your tax, legal, or accounting professional for guidance specific to your situation.
Take the Next Step

Shop New Kia Vehicles at Hayward Kia

Looking for a new Kia that may qualify for the auto loan interest deduction? Our team can help you review available inventory, financing options, and vehicle details.

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*Eligible vehicles include those assembled with U.S. and globally sourced parts. Vehicle eligibility may vary by model year, trim, VIN, assembly location, loan type, taxpayer status, and other requirements.

*Our dealership and its employees do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.

Kia 10 Year/100,000 Mile Warranty | Hayward Kia in Hayward, CAWarranties include 10-year/100,000-mile powertrain and 5-year/60,000-mile basic. All warranties and roadside assistance are limited. See retailer for warranty details.

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