Vehicle Interest Tax Deduction

Up to $10,000 per tax year in auto loan interest paid on a qualifying new, U.S.-assembled vehicle purchased for personal use.

The deduction phases out for single filers with a modified adjusted gross income (MAGI) above $100,000, and for married couples filing jointly with a MAGI above $200,000.

No. The deduction applies only to new vehicles.

No. Only interest paid on a qualifying auto loan qualifies — lease payments do not.

Yes. Vehicles used for business or commercial purposes do not qualify under this deduction.

Check the first digit or letter of the VIN. A VIN starting with 1, 4, 5, or 7 indicates U.S. assembly. You can also use the NHTSA VIN Decoder to confirm. Our sales team at Coastal Nissan in Norwell can help you verify this at the time of purchase.

The deduction currently applies to interest paid during tax years 2025 through 2028. It was established under federal tax legislation (H.R. 1) signed in 2025.

Yes. H.R. 1, signed into law in 2025, is sometimes referred to by that name. The auto loan interest deduction is one provision within that broader legislation. We focus on the savings it creates for car buyers.

Consult your tax professional for specifics on how it applies to your tax filing; details can vary based on individual circumstances. This page is for general informational purposes only.

Our finance team can walk you through qualifying vehicle inventory and connect you with financing. For specific tax advice, we recommend speaking with a CPA or tax professional.

The federal auto loan interest deduction is a new tax benefit that allows eligible buyers of new, U.S.-assembled vehicles to deduct up to $10,000 per year in auto loan interest from their federal taxable income. The deduction applies to interest paid during tax years 2025 through 2028 and is available to individuals who purchase a qualifying new vehicle for personal use and finance it with an auto loan. It is an above-the-line deduction, meaning it reduces taxable income regardless of whether the taxpayer itemizes deductions.

Several Nissan models sold at Coastal Nissan in Norwell, Massachusetts are assembled in the United States and may qualify for the federal auto loan interest deduction. These include the Nissan Rogue, Nissan Altima, Nissan Pathfinder, Nissan Murano, Nissan Frontier, and Nissan Leaf, all of which are manufactured at Nissan's U.S. plants in Smyrna, Tennessee and Canton, Mississippi. Massachusetts buyers shopping for a qualifying Nissan near Boston's South Shore can visit Coastal Nissan at 109 Accord Park Drive in Norwell, MA, or browse current inventory online at coastalnissan.com.

Yes. Massachusetts residents who purchase a new, U.S.-assembled vehicle and finance it with an auto loan may be eligible for the federal auto loan interest deduction — up to $10,000 per year for tax years 2025 through 2028. This is a federal deduction and applies to Massachusetts buyers in the same way as buyers in other states, provided the vehicle was assembled in the United States and is used for personal purposes. Income limits apply: the deduction phases out for single filers with a modified adjusted gross income above $100,000 and for married joint filers above $200,000. Coastal Nissan in Norwell, MA serves the South Shore including Braintree, Hingham, Plymouth, and Quincy, and carries a full inventory of qualifying U.S.-built Nissan vehicles.

No. The federal auto loan interest deduction does not apply to vehicle lease payments, only to interest paid on a qualifying auto loan for a new vehicle purchase. Used vehicles, including certified pre-owned vehicles, also do not qualify. To be eligible, the vehicle must be new, U.S.-assembled (VIN beginning with 1, 4, 5, or 7), purchased for personal rather than business use, and financed through an auto loan. Buyers who meet these requirements may deduct up to $10,000 in loan interest per year on their federal tax return for tax years 2025 through 2028.

To verify that a Nissan vehicle was assembled in the United States, check the first character of the Vehicle Identification Number (VIN). A VIN beginning with 1, 4, 5, or 7 indicates U.S. assembly and means the vehicle may qualify for the federal auto loan interest deduction. The VIN can be found on the driver's side dashboard at the base of the windshield, on the vehicle's insurance card, or on the registration documents. For a precise assembly location, buyers can use the free VIN decoder tool provided by the National Highway Traffic Safety Administration (NHTSA) at vpic.nhtsa.dot.gov/decoder. The sales team at Coastal Nissan in Norwell, Massachusetts can also confirm the assembly origin of any vehicle in their inventory at the time of purchase.