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Point Breeze Credit Union Blog
February 6, 2026

No Tax on Car Loan Interest

Understanding the New Auto Loan Interest Deduction Under the One, Big, Beautiful Bill Act (OBBBA)
The One, Big, Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, includes a provision commonly referred to as “No Tax on Car Loan Interest.” This provision took effect for vehicles purchased beginning January 1, 2025, and may allow eligible taxpayers to deduct interest paid on qualifying new vehicle loans when filing their federal taxes for tax years 2025 through 2028.
 

What You Need to Know:

  • You may be able to deduct qualified auto loan interest per year for tax years 2025 through 2028.

  • The deduction is available whether or not you itemize your tax return.

Eligibility Requirements:

  • The interest is paid on a loan for a new vehicle purchased for personal use (used vehicles, leased vehicles, and vehicles purchased for business use do not qualify).

  • The vehicle was purchased on or after January 1, 2025.

  • You must include your vehicle's VIN (Vehicle Identification Number) when claiming the deduction.

Qualifying Vehicles:

  • Cars, minivans, vans, SUVs, pickup trucks, and motorcycles may be eligible.

  • The vehicle was assembled in the United States (VIN Lookup).

  • The vehicle has a gross vehicle weight rating under 14,000 pounds.

Finding Your Interest Paid:

Your total interest paid year to date for your auto loan can be found on your December 31 credit union statement.
 

Learn More:

Point Breeze Credit Union advises members to consult your tax advisor or visit the IRS website "No tax on car loan interest (Section 70203)” for full eligibility guidelines.