Car Loan Interest Tax Deduction

New Honda Purchases May Qualify for a Tax Break!

If you financed a new Honda this year, you could be eligible for a temporary federal tax deduction on the interest paid on your auto loan.

What Is the Car Loan Interest Deduction?

Qualified buyers can deduct up to $10,000 per year in interest paid on an eligible vehicle loan from their taxable income-potentially lowering your tax bill.

Which Vehicles and Loans Qualify?

To be eligible, your vehicle must:

  • Be a new car, minivan, van, SUV, or pick-up truck with a gross vehicle weight rating of less than 14,000 pounds purchased (not leased) on or after January 1, 2025
  • Be assembled in the U.S.
  • Be used for personal (not business) purposes
  • Be financed through a dealer, bank, or credit union

Who Can Claim the Deduction?

You may qualify if your income falls within these limits:

  • Taxpayers with modified adjusted gross income (MAGI) less than $100,000
  • Married couples filing jointly: MAGI of $200,000 or less
  • If your income is above those thresholds, the deduction gradually phases out. 

Contact

Norris Honda

925 Merritt Blvd
Directions Baltimore, MD 21222

  • Sales: (443) 549-3400

Get the Details Right

Every tax situation is different. We recommend speaking with your tax advisor to confirm eligibility and understand how the deduction could apply to you. If you're unsure where your vehicle was assembled, use the NHTSA VIN Decoder.


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Although every reasonable effort has been made to ensure the accuracy of the information contained in this site, absolute accuracy cannot be guaranteed. This site, and all information and materials appearing on it, are presented to the user "as is" without warranty of any kind, either express or implied. Confirm all information with your tax professional and reference the IRS website for complete information.