802.230.1933
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802.230.1933
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You may qualify for a federal tax deduction of up to $10,000 on the annual interest paid toward financing certain U.S.-assembled vehicles*, provided you meet eligibility requirements.
Several of Honda’s best-known vehicles—such as the Accord, CR-V, Pilot, Civic, and Ridgeline—are produced at Honda manufacturing facilities within the United States, including plants in Ohio, Indiana, and Alabama. Honda’s commitment to U.S.-based production helps ensure consistent quality, dependable supply, and supports American jobs.
As a general rule of thumb, New Honda vehicles with VINs that begin with 1, 4, 5, or 7 are typically assembled in the United States.
Starting in July 2025, newly enacted federal legislation introduced a potential tax benefit for buyers financing a new vehicle. This change could translate into real savings by allowing eligible consumers to deduct a portion of their auto loan interest when filing their taxes. Below is a breakdown of how it works and who may benefit.
This new provision allows qualifying taxpayers to deduct interest paid on loans used to purchase new vehicles. Unlike a tax credit—which directly reduces the taxes you owe—this deduction lowers your taxable income, which may reduce your overall tax liability.
The goal of this legislation is to offer middle-income tax relief while making vehicle ownership more attainable. It’s important to note that this benefit is applied when you file your federal tax return, not at the dealership at the time of purchase.
The deduction is expected to apply retroactively to purchases made beginning January 1, 2025, and is currently scheduled to remain in effect through the 2028 tax year. As with any federal policy, the timeline could change if the law is amended, extended, or repealed.
Final guidance from the IRS has not yet been issued, so some details may be clarified as implementation moves forward.
To qualify for the deduction, both the vehicle and the buyer must meet certain criteria. In general, eligible vehicles must meet the following conditions:
New vehicles only – Used vehicles and leases are not eligible
Final assembly must occur in the United States – Eligibility is based on the specific VIN, so not every vehicle within the same model lineup may qualify*
Personal-use purchases only – Vehicles used for business, commercial, or fleet purposes do not qualify
Weight limits apply – Eligible vehicles include cars, motorcycles, SUVs, minivans, vans, and pickup trucks with a gross vehicle weight rating under 14,000 pounds
Additionally, income limits apply. The deduction gradually phases out for individuals with higher modified adjusted gross income (MAGI).
The IRS provides guidance that will clarify how the deduction works, including eligibility requirements, necessary documentation, and the process for claiming it on your tax return.
For the most up-to-date and detailed information, consumers are encouraged to consult the IRS website.
*Vehicle loan interest tax deductions are governed by federal tax law and are subject to current and future IRS rules. Eligibility may depend on factors including, but not limited to, vehicle classification, personal (non-commercial) use, final U.S. assembly location, buyer income thresholds, and specific vehicle identification numbers (VINs). Qualification is determined on an individual vehicle basis, and not all vehicles within the same model line will necessarily be eligible. Program details are subject to change, and additional IRS guidance may be issued. Buyers are responsible for confirming eligibility and should consult a licensed tax professional regarding their individual tax circumstances. As a general reference point, shoppers exploring Honda models that may qualify for the vehicle loan interest tax deduction can look at the beginning of the vehicle’s VIN. Honda vehicles with VINs starting with 1, 4, 5, or 7 are typically assembled in the United States. While this can be a helpful starting guideline, VIN structure alone does not guarantee eligibility, and final qualification must still meet all IRS requirements.