If you’re planning to purchase a new car—or recently did so—there’s an important new tax benefit you should be aware of.

Starting in 2025, taxpayers may be eligible to deduct the interest paid on a new car loan—a deduction that has not been available for several decades. We want to ensure you’re informed about this change so you can take advantage of it if it applies to your situation.

What’s Changing

If you purchased a new vehicle in 2025 and used a loan to finance it, the interest paid on that loan may now be tax-deductible on your personal return.

Eligibility Requirements

You may qualify for this deduction if:

• The vehicle is new (not previously owned or used)
• The loan is secured by the vehicle itself
• The vehicle is for personal use and titled in your name
• You paid interest on the loan during 2025

Please note: Additional conditions and income limits apply, so not every new car purchase will meet the qualifying criteria.

What You’ll Need for Tax Filing

Your lender will provide a year-end interest statement (similar to Form 1098) summarizing the total interest paid during 2025. Please include this statement with your tax documents so we can determine your eligibility and apply the deduction if applicable.