If you're financing a vehicle this year, you may be asking: "Is car loan interest tax-deductible in 2025?" The short answer: yes, but only in specific situations-primarily for business use. This guide explains when car loan interest is deductible, which vehicles qualify, and how the new USA CAR Act could help you save more on your next vehicle purchase. Car loan interest is not deductible for personal use. However, it can be tax-deductible for business vehicles, especially if you are self-employed or use your car primarily for work.
The USA Clean Auto Rebate (CAR) Act, passed in 2025, provides a new federal tax credit that helps offset auto loan interest costs for qualifying buyers. To qualify for the USA CAR Act or interest deduction, your vehicle must be assembled in the United States. Many popular vehicles from Ford, Chevrolet, Jeep, and Ram meet this requirement. ( Pro tip: Look for "Final Assembly Point" on the window sticker to confirm U.S. assembly. ) Eligible Ford Models include: Ford F-150, Ford Explorer, Ford Escape, Ford Maverick, Ford Edge, Ford Ranger, Ford Mustang Mach-E, Ford Transit & Transit Connect.
If your business purchases a truck or SUV over 6,000 pounds GVWR, you may also qualify for the Section 179 deduction, which allows you to depreciate the entire cost in the year of purchase (up to IRS limits). You can combine Section 179 with interest deductions for maximum savings!
At Mosaic Auto Group, we make it easy to find tax-deductible vehicles with low-intrest financing. Our inventory includes:
U.S.-assembled Ford, Chevy, Jeep, Ram, Dodge, and Chrysler vehicles
Options that may qualify for the USA CAR Act and Section 179
Competitive pricing and expert financing guidance
Whether you're a small business owner, contractor, or self-employed professional, our team is here to help you maximize tax advantages while finding the right vehicle.
Visit us in Zumbrota or Lake City, Minnesota
Or contact our team to learn more about vehicle eligibility and financing options
