Disclaimer: We’re car people, not financial advisors or tax consultants. This is not financial advice. Please consult with your expert to determine eligibility and what is most advantageous for your individual situation.
Thinking about pulling the trigger on a new Corvette, Ford Mustang Dark Horse, or a Lucid Air Sapphire? If you’re planning to finance a high-performance, U.S.-assembled vehicle, there’s a new car loan tax break that could save you thousands—thanks to the One Big Beautiful Bill Act (OBBBA).
Starting in 2025, certain car buyers can deduct auto loan interest from their federal taxes up to $10,000 annually. Here’s how this performance car financing strategy could work for collector car enthusiasts.
What Is the New Auto Loan Interest Deduction?
This groundbreaking auto loan interest deduction allows qualifying buyers to write off up to $10,000 per year in car loan interest paid on eligible vehicles. The deduction applies exclusively to:
- New cars assembled in the United States
- Vehicles purchased between 2025 and 2028
- Financed purchases only (leasing doesn’t qualify)
Key advantage: This is an above-the-line deduction, meaning you can claim it even if you take the standard deduction—no itemizing required. This makes it accessible to far more car enthusiasts than traditional automotive tax strategies.
Auto Loan Interest Deduction Eligibility Requirements
To maximize your car loan tax savings, ensure you meet all qualifying buyer criteria:
- Income limits apply:
- $100,000 for individual filers
- $200,000 for married couples filing jointly
- Personal use vehicles only (not business or fleet)
Pro tip: Check if your target vehicle qualifies by looking at the VIN’s first digit. If it starts with 1, 4, or 5, it’s U.S.-assembled and potentially eligible for the car financing tax deduction.
Why U.S.-Assembled Performance Cars Are the Big Winners
The American-made vehicle requirement creates significant advantages for domestic performance car enthusiasts:
Top Qualifying Performance Vehicles:
- Chevrolet Corvette (Bowling Green, KY)
- Ford Mustang Dark Horse (Flat Rock, MI)
- Lucid Air Sapphire (Casa Grande, AZ)
Unfortunately Excluded:
- European supercars (Ferrari, Lamborghini, McLaren)
- Most German luxury vehicles (BMW M, Mercedes-AMG, Audi RS)
- Japanese performance cars (Nissan GT-R, Honda NSX)
This creates a unique opportunity for American muscle car financing and domestic luxury vehicle loans.
Why This Matters for Serious Enthusiasts
For collectors and enthusiasts financing exotic cars, classic reproductions, or limited production vehicles, this isn’t just a tax gimmick—it’s a substantial automotive investment strategy.
Real impact: When you’re talking about a car with a V8 rumble or supercharged performance, saving on your next collector car makes that redline hit even sweeter while keeping more cash in your pocket for modifications, track days, or your next acquisition.
Next Steps: Maximize Your Auto Loan Tax Benefits
Ready to take advantage of the new auto loan interest deduction? Here’s your action plan:
- Verify vehicle eligibility: Confirm your target car is U.S.-assembled
- Check income limits: Ensure you qualify based on current tax filing status
- Time your purchase: Consider buying in 2025 for maximum benefit
- Optimize loan structure: Balance monthly payment comfort with deduction maximization
- Consult tax professionals: Confirm eligibility and strategy for your specific situation
Woodside Credit specializes in collector car financing with the terms serious enthusiasts trust—low monthly payments and competitive rates. Our team understands the collector car market and brings that expertise for a seamless experience.
Ready to Finance Your Dream Car with Maximum Tax Advantages?
The 2025 auto loan interest deduction creates an unprecedented opportunity for U.S. performance car purchases. Whether you’re eyeing a Corvette or a luxury American muscle car, the timing has never been better to make your move.
Start with a quick quote to estimate the payment on your next Corvette.
