Cut Your Tax Bill with a Ford Vehicle Loan Tax Deduction in Thomasville, GA

At Thomasville Ford Lincoln, we love helping our customers in Thomasville, GA, get more out of their next vehicle purchase. And thanks to a new federal policy starting in tax year 2025, car buyers may now qualify for a vehicle loan tax deduction when financing eligible new Ford vehicles or Lincoln vehicles. That means a lower tax bill and smarter ownership, all for simply buying the Ford you were already planning on.

This guide breaks down how the auto loan interest deduction works, which Ford models may qualify, and how to set yourself up to save.

What is the Vehicle Loan Tax Deduction?

The Ford vehicle loan tax deduction is a newly approved federal tax break that applies to interest paid on qualified car loans. This is not a tax credit. Instead, it's an interest deduction that helps reduce your taxable income, which could lower how much you owe when filing your tax return starting in 2026 for the tax year 2025.

If you plan to finance a new Ford or Lincoln model, and meet the income and vehicle requirements, the car loan interest deduction could offer you significant tax benefits over time.

When Can You Start Claiming the Deduction?

The program kicks off for federal auto loan interest paid in the 2025 tax year, covering vehicles financed or purchased beginning January 1, 2025. The program is currently set to run through 2028, unless extended by future legislation.

So if you're financing your next vehicle purchase in the upcoming year, now is the perfect time to think about models that could make you eligible for an auto loan interest deduction.

Requirements for Vehicle Eligibility

To qualify, the vehicle you're financing must meet these specific conditions:

• Must be a new vehicle (used inventory and leases do not apply)
• Must be assembled in the United States
• Must have a gross vehicle weight rating under 14,000 pounds
• Must be used strictly for personal use, not commercial or business purposes

Not all trims or configurations are eligible, so you’ll want to verify your Ford vehicle's assembly location using the VIN before you finalize financing.

Who Qualifies as a Buyer?

The deduction also has requirements on the buyer’s side. You may be eligible if:

• You itemize deductions on your tax return (standard deduction filers don’t qualify)
• You use the vehicle primarily for personal transportation
• Your modified adjusted gross income falls within the IRS’s allowable limits
• Your loan is financed through a qualified lender, such as a bank, credit union, or dealership financing center

What Ford and Lincoln Vehicles May Qualify?

If the vehicle is assembled in the U.S., and all other buyer criteria are met, it may qualify for the auto loan interest deduction. These Ford models are currently built in American plants and could be eligible:

• Ford F-150 – Dearborn, MI, and Claycomo, MO
• Ford Ranger – Wayne, MI
• Ford Bronco – Wayne, MI
• Ford Explorer – Chicago, IL
• Ford Expedition and Ford Expedition Max – Louisville, KY
• Ford Super Duty – Louisville, KY
• Ford Mustang and Ford Mustang Mach-E – Flat Rock, MI, and Mexico (check VIN for final assembly)

Some Lincoln vehicles also qualify if assembled domestically. Always verify eligibility based on VIN to be certain.

How Much Interest Can You Deduct?

You may be able to deduct up to $10,000 per year in car loan interest, depending on:

• Your income
• The total amount of interest paid
• Loan terms and financing details
• The lender used

Only the interest portion of monthly payments applies, not principal, taxes, or fees.

What is Considered Qualified Interest?

The IRS defines “qualified interest” as the interest portion of monthly payments made on a car loan that was used solely to finance a new, qualifying vehicle. The loan must be through a recognized financial institution, such as:

• A bank
• A credit union
• An automotive finance company
• A Ford dealership's financing department

Refinanced loans or personal loans do not qualify. This benefit is tied directly to the vehicle loan itself.

Do EV Buyers Get Both the EV Credit and Interest Deduction?

Yes. If you're financing a Ford electric vehicle like the Mustang Mach-E and it meets both sets of eligibility requirements, you may qualify for both the EV tax credit and the auto loan interest deduction. That combo can mean thousands in potential tax savings.

Just make sure your EV is assembled in the U.S. and financed through an eligible loan.

What About the Standard Deduction?

If you take the standard deduction, you cannot claim the car loan interest deduction. You’ll need to itemize deductions on your tax return to benefit. Talk to a tax professional to determine which strategy works best for your situation.

Why Thomasville Drivers Should Care

Financing your vehicle isn’t just about the monthly payment anymore. This new federal tax deduction rewards smart buyers who choose eligible Ford models and structure their loans the right way. At Thomasville Ford Lincoln, we’re here to help you understand your options, select a qualifying vehicle, and set you up with a loan that could help reduce your taxable income.

Ready to Buy Smarter?

Start planning now for your 2025 tax return by exploring new Ford vehicles assembled in the U.S., comparing financing options, and checking your VIN before signing. At Thomasville Ford Lincoln, we’ll walk you through the details and help you take advantage of every available benefit.

Stop by our showroom in Thomasville, GA, or contact our team to learn more about financing your next ride with confidence.

*Disclaimer: This content was drafted with AI assistance for initial drafting, reviewed by a subject-matter expert for accuracy, and edited by our team of writers and editors.