Vehicle Interest Deduction 2025-2028: What the Deduction Means For You

A New Tax Benefit for Buyers of U.S.-Assembled Vehicles

Are you planning to buy a new vehicle soon? The recently passed Vehicle Interest Deduction can help you save money on your federal taxes. This deduction allows qualified buyers to deduct up to $10,000 in interest on auto loans for specific vehicles, but not all vehicles qualify. 

As your trusted M&L Chrysler Dodge Jeep Ram Dealership, we’re here to break down exactly what this means for you, which vehicles qualify, and help you make well-informed purchase decisions. 

What is the Vehicle Interest Deduction? 

The Vehicle Interest Deduction is a new federal tax benefit that allows buyers to deduct up to $10,000 of interest paid on auto loans for qualifying new vehicles. This deduction applies to new 2025-2028 model cars and trucks that have been assembled in the United States. 

This new tax incentive encourages buyers to support American manufacturers while helping reduce the overall cost of owning a new vehicle. 

Who Qualifies for the Vehicle Interest Deduction? 

To take advantage of the deduction, you must: 

• Purchase a new vehicle, model year 2025 or later 
• Finance the vehicle with a loan (cash purchases or leases do not qualify) 
• The vehicle must be for personal use, not for business
• The vehicle’s final assembly must occur in the U.S. 
•  Have a Modified Adjusted Gross Income (MAGI) below $100,000 (single filer) or $200,000 (joint filers) – the deduction phases out by 20% over these limits. 

Which Vehicles Qualify?

In general, all cars and trucks model year 2025 and later assembled in the U.S. qualify–but here at M&L Chrysler Dodge Jeep Ram, these are the Stellantis models that meet the criteria:

• Jeep Wrangler & Jeep Gladiator–assembled in Toledo, Ohio
• Jeep Wagoneer & Grand Wagoneer–assembled in Warren, Michigan 
• Ram 1500 & Ram 1500 REV (electric)–assembled in Warren, Michigan 
• Other trucks and SUVs on the STLA Frame platform, including Wagoneer S and Ram Charger–assembled in Sterling Heights, Michigan

If you’re unsure whether a vehicle qualifies, please don’t hesitate to ask. We are here to help verify eligibility so you can buy with confidence.  

How to Claim the Vehicle Interest Deduction

When you finance your qualifying new vehicle: 

1. Make sure to get the Vehicle Identification Number (VIN) – you’ll need this for your tax return. 
2. Keep records of your loan interest payments. 
3. Work with a tax professional to claim up to $10,000 of deductible interest on your 2025-2028 federal taxes. 

Get Ready to Save on Your New Vehicle 

If you’re looking for a new, U.S.-assembled vehicle with great financing options, you’re in the right place. Visit our M&L Chrysler Dodge Jeep Ram dealership  to explore qualifying Jeep, Ram, and other models eligible for the Vehicle Interest Deduction. 

Our sales and financing experts are here to help you find the perfect new vehicle and take advantage of the new tax deduction.