The deduction applies to new vehicles with final assembly in the United States, a gross vehicle weight rating under 14,000 pounds, and purchased for personal use. The vehicle must be financed — not leased — with a loan originated after December 31, 2024, and the loan must be secured by the vehicle. You can confirm U.S. assembly by checking the first digit of the VIN: if it starts with 1, 4, 5, or 7, it was assembled domestically. At George Nunnally Chevrolet in Bentonville, qualifying models include the Silverado 1500, Silverado HD, Tahoe, Suburban, Traverse, and Colorado.

The full deduction is available to single filers with modified adjusted gross income (MAGI) up to $100,000 and married couples filing jointly up to $200,000. Above those thresholds, the deduction is reduced by $200 for every $1,000 of MAGI over the limit. It phases out completely at $150,000 for single filers and $250,000 for joint filers. Even near the limit, you may still qualify for a partial deduction. Consult a tax professional for your specific situation.

The deduction reduces your taxable income by the amount of qualifying interest you paid during the year, up to $10,000. Your actual tax savings depend on your tax bracket. For example, a buyer in the 22% bracket who paid $4,000 in qualifying interest would reduce their federal tax bill by roughly $880. Most new-car loans generate between $2,000 and $5,000 in interest per year, so the annual savings for a typical Northwest Arkansas buyer will be in the hundreds to low thousands of dollars — meaningful, but it's a deduction, not a dollar-for-dollar credit..

No. The deduction only applies to new vehicles financed with a qualifying loan. Used vehicles do not qualify, and lease payments do not qualify. The law specifies that the original use of the vehicle must begin with the taxpayer, so previously titled vehicles are excluded even if they have very low mileage.

You'll file it on Schedule 1-A (Additional Deductions), Part IV of your federal return. You'll need your vehicle's VIN and a year-end interest statement from your lender. For the 2025 tax year, your lender may provide this through an online portal, monthly statements, or an annual summary. Starting with the 2026 tax year, lenders are required to issue Form 1098-VLI by January 31 if you paid $600 or more in qualifying interest. Because this is an above-the-line deduction, you can claim it whether you itemize or take the standard deduction.

Yes, and it's one of the smartest moves you can make. Getting pre-approved gives you a clear picture of your rate and monthly payment before you shop, and it helps you estimate how much qualifying interest you'll pay over the life of the loan — which directly affects your deduction. Our Bentonville finance team can run a quick pre-approval, usually in minutes. You can also use our payment calculator to get a quick estimate.

The Silverado 1500, Silverado HD, Tahoe, Suburban, Traverse, and Colorado are all assembled in the United States and qualify when financed with a new loan for personal use. The Equinox, Trax, and Trailblazer are assembled outside the U.S. and do not qualify. Our team can verify any vehicle's assembly origin by VIN right here in our Bentonville showroom.

Generally, yes. The IRS has indicated that if you refinance a qualifying vehicle loan, the interest paid on the refinanced loan is typically eligible for the deduction, as long as the refinanced amount relates to the original qualifying purchase.

Yes. There is no limit on the number of qualifying loans you can claim, as long as each vehicle meets all the requirements. However, the combined deduction across all qualifying vehicles is still capped at $10,000 per year ($10,000 per spouse if married filing separately).

The auto loan interest deduction is temporary. It covers interest paid in tax years 2025 through 2028 and will expire after 2028 unless Congress acts to extend it. If you're considering a new Silverado, Tahoe, Traverse, or other qualifying Chevrolet, acting within this window maximizes your potential tax savings.