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