Save More with the Vehicle Loan Tax Deduction in San Antonio, TX

Buying a new car comes with a lot of questions. One you might not expect: Can your Hyundai car loan save you money on your taxes? The answer could be yes.

At Red McCombs Hyundai Northwest in San Antonio, we want our customers to feel confident not just in their vehicles but in how they finance them. Thanks to a new federal vehicle loan tax deduction, many drivers could qualify for a car loan interest deduction starting in 2025.

Let’s break it down.

What You Can Deduct: How the Tax Rule Works

This new policy lets qualifying buyers deduct the interest they pay on auto loans for new Hyundai vehicles. It’s not a tax credit that reduces what you owe directly; instead, it reduces your gross income, which could lower your overall tax burden.

That means if you're financing a Hyundai Santa Fe, Hyundai Tucson, or Hyundai Santa Cruz, a portion of your monthly loan interest could count toward a tax deduction, up to a proposed $10,000 per year in eligible interest.

When and How It Applies

The deduction kicks in for purchases or loans starting January 1, 2025, and is expected to remain active through 2028. That means your tax return for 2025 could reflect your loan interest deduction, provided your purchase meets the following criteria.

Do You and Your Vehicle Qualify?

Both the car and the buyer must meet specific guidelines for eligibility. Here’s how it breaks down:

Vehicle Requirements

• Must be new, not pre-owned or leased
• Final assembly must occur in a U.S.-based facility
• Must be a light-duty vehicle (GVWR under 14,000 pounds)
• Must be used for personal driving only

Buyer Requirements

• You must itemize deductions (standard deduction users won’t qualify)
• Your income must fall within IRS income limits
• The car must be used for non-commercial purposes
• You must verify the Vehicle Identification Number (VIN) to confirm eligibility

Our team can walk you through which Hyundai models are assembled in the U.S. and help you find qualifying options before you finance.

What Makes Interest “Qualified”?

Not all interest payments count. To be deductible:

• The loan must be used solely for purchasing the eligible vehicle
• The lender must be a legitimate financial institution or a Hyundai-affiliated financing source
• Payments must reflect auto loan interest, not personal loans, refinances, or HELOCs

Have questions? Our financing experts at Red McCombs Hyundai Northwest can help you understand which types of loans qualify under the new rule.

Can You Combine This with the EV Tax Credit?

Yes, in some cases. If you're purchasing a qualifying Hyundai electric vehicle (like the IONIQ 5 or IONIQ 6), you could be eligible for both the EV tax credit and the auto loan interest deduction.

Just be sure the EV is assembled in the U.S., purchased new, and financed through a qualified loan structure. When combined, these tax benefits could result in significant savings for qualified car buyers.

Hyundai Models That May Be Eligible

Several Hyundai vehicles are assembled in Alabama, including:

• Hyundai Santa Fe
• Hyundai Tucson
• Hyundai Santa Cruz

Keep in mind that not all trims or drivetrains are U.S.-assembled. Double-check the VIN or consult with our team before finalizing your purchase.

What to Do Before You File

You’ll first see this deduction on your 2025 tax return, but there are steps to take now:

• Save your loan documents
• Request a Form 1098 or interest statement from your lender
• Keep your vehicle’s VIN handy to check IRS eligibility
• Confirm your gross income falls within the income limits
• Choose to itemize your deductions when you file
• Stay up to date with IRS guidelines and reporting requirements

Why Itemizing Matters

This loan interest deduction is only available to those who itemize deductions. If your itemized total, including mortgage interest, charitable giving, and your vehicle deduction, exceeds the standard deduction, you could benefit.

If not, it may not be worth claiming this specific benefit. Your tax professional can help you decide what works best for your situation.

Why it’s Worth Financing at Red McCombs Hyundai Northwest

We’re here to help you make a smart financial move. If you're eligible, the Hyundai vehicle loan tax deduction could reduce your taxable income, especially for drivers financing popular U.S.-assembled models.

That’s a big deal for drivers who want the latest tech, fuel economy, and Hyundai reliability, and now, a potential tax break too.

Before You Buy, Remember These Key Points

• Check that your Hyundai vehicle is assembled in the U.S.
• Work with a qualified lender
• Keep records of annual interest paid
• Confirm that your income fits the eligibility window
• Make sure your loan type is eligible
• Choose to itemize on your tax return
• Contact us with your questions

Talk to Our Finance Team Today

Ready to shop for eligible auto loans and qualify for the Hyundai vehicle loan tax deduction? Visit Red McCombs Hyundai Northwest in San Antonio, TX, to meet with a financing expert today. We’ll guide you through qualifying Hyundai models, help you secure the right auto loan, and make sure your paperwork is set up for potential tax savings.

Turn your next car purchase into a smarter investment, and drive home knowing you’ve made a decision that could pay off during tax season.

*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.