Section 179 Deduction for Vehicles: What Qualifies and How to Claim It

Thinking about buying a new car soon? The recently passed Vehicle Interest Deduction allows qualified buyers to deduct interest on eligible new vehicle loans through 2028. Potentially saving you up to $10,000 per year in deductible interest. 

This guide breaks down how Section 179 applies to new vehicle purchases, explains which vehicles qualify, and answers a common question: Do you qualify for this vehicle tax deduction?  

What is the Vehicle Interest Deduction? 

This new federal tax incentive enables consumers who finance eligible new vehicles to deduct a portion of the interest on their auto loans, up to $10,000 per year. It’s aimed only at new cars and trucks model years 2025 through 2028 assembled in the United States. 

Who Qualifies for this Vehicle Tax Deduction? 

Purchasers who wish to utilize this deduction must fulfill the following requirements: 

• Purchase a new vehicle, model year 2025 or later
• Finance the vehicle through a loan (cash transactions or leases do not qualify) 
• Only use the vehicle for personal use (not business)
• The vehicle is assembled in the United States
• Have a Modified Adjusted Gross Income (MAGI) below $100,000 for single filers or $200,000 for married joint filers—the deduction is reduced by 20% above these figures.

Which Vehicles Qualify? 

All cars and trucks model year 2025-2028 that are assembled in the U.S qualify, but at Battleground Kia, these are the following popular models that qualify:

• Kia Sorento (assembled in West Point, Georgia) 
• Kia Telluride (assembled in West Point, Georgia) 
• Kia Carnival (assembled in West Point, Georgia)

If you’re not certain whether a specific Kia model qualifies, our knowledgeable staff is available to guide you through verifying eligibility and the buying process. 

How to Claim the Vehicle Interest Deduction on Your Tax Return

When you finance your qualifying new vehicle, make sure to do the following: 

1. Keep track of the Vehicle Identification Number (VIN), as you will be using this with your tax return.
2. Keep detailed records of all interest payments made on your auto loan. 
3. When filing your federal tax return, work with a tax professional to claim up to $10,000 in deductible interest for 2025-2028. 

Additional Tips 

• Make sure to keep all loan documents and payment statements throughout the year.
• Consider discussing your purchase and financing options with a tax advisor early to maximize your savings. 
• Stay up to date with IRS rules so you can comply in its entirety.  

Ready to Save on Your Next Kia? 

Looking to benefit from the Vehicle Interest Deduction? Battleground Kia is ready to help. Our team will guide you through qualified models and financing options so you save on taxes and drive off in a new Kia that suits your needs and budget.