Interest Tax Deduction for American Vehicles - The Complete List Of Qualifying Vehicles

Starting in 2025, a new federal law is giving American car buyers a powerful tax advantage. The Big Beautiful Bill — officially the American Vehicle Interest Deduction Act — lets eligible buyers deduct the interest paid on auto loans for vehicles that are assembled in the United States. If you're looking to buy a car this year, this incentive could put real money back in your pocket.

💵 What Is the Big Beautiful Bill?

The Big Beautiful Bill was created to support U.S. auto manufacturing and help middle-income earners afford reliable transportation. The law allows buyers of new, American-assembled vehicles to write off the interest paid on their car loans, up to a federally set cap.

This interest deduction works similarly to the mortgage interest deduction and is aimed squarely at encouraging domestic production and ownership.

✅ Key Eligibility Guidelines

  • Vehicle must be new with final assembly in the United States

  • Only purchases using secured auto loans qualify

  • Leases do NOT qualify, since lessees do not own the vehicle or pay interest

  • Mixed personal/business-use vehicles are allowed

  • Vehicles used 100% for business may qualify for separate IRS depreciation rules

💰 Income Limits for Eligibility

Filing StatusFull Deduction Up ToPhase-Out Ends AtSingle$125,000 AGI$175,000 AGIMarried Filing Jointly$250,000 AGI$350,000 AGIHead of Household$185,000 AGI$235,000 AGI

Deduction applies to interest paid on up to $50,000 of vehicle loan principal.

🚗 Qualifying Vehicles (Assembled in the USA)

Here’s a list of cars, trucks, and electric vehicles with final assembly in the United States, and therefore eligible under the Big Beautiful Bill:

🔋 Electric & Plug-In Hybrids

  • Tesla Model 3, Y, S, X – CA & TX

  • Volkswagen ID.4 – TN

  • Kia EV6 – GA

  • Hyundai Ioniq 5 – GA

  • Chevrolet Bolt EV – MI

🚙 Sedans, SUVs, Crossovers

  • Honda Accord – OH

  • Honda Civic Hatchback – IN

  • Toyota Camry – KY

  • Toyota Corolla – MS

  • Toyota Corolla Cross – AL

  • Acura TLX, Integra, MDX, RDX, ZDX – OH, TN

  • Mazda CX‑50 – AL

  • Kia Telluride, Sorento, Sportage, K5 – GA

  • Hyundai Santa Fe, Tucson – AL

  • Ford Explorer, Escape, Edge, Bronco – IL, KY, MI

  • Chevrolet Traverse, Trailblazer – MI

  • Buick Enclave – MI

  • Cadillac XT6, CT5 – MI & TN

  • Jeep Grand Cherokee, Wagoneer – MI

  • Jeep Wrangler, Gladiator – OH

  • Dodge Durango – MI

🛻 Trucks & Full-Size SUVs

  • Ford F‑150, Super Duty, Ranger – MI, MO, KY

  • Chevrolet Silverado, Silverado HD – MI, IN

  • GMC Sierra – IN, TX

  • Chevrolet Tahoe, Suburban – TX

  • GMC Yukon – TX

  • Cadillac Escalade – TX

  • Toyota Tundra, Sequoia – TX

  • Honda Ridgeline, Passport, Pilot – AL

💼 Luxury & Startups

  • Tesla Cybertruck – TX

  • Rivian R1T & R1S – IL

  • Lucid Air, Gravity – AZ