Dealer Financing Interest Deduction Calculator
For captive-lender loans signed in the F&I office.
The short answer: At the numbers below, the deduction is $3,300, worth $726 at 22% ($28 per paycheck).
New, US-assembled vehicle only
Modified Adjusted Gross Income
Car Loan Interest Deduction
$3,300
✅ You qualify for the full deduction
⚠️ This calculator provides estimates for informational and educational purposes only. It is not tax advice. Results are based on the One Big Beautiful Bill Act (OBBBA) and IRS Schedule 1-A. Consult a qualified tax professional for your specific situation.
Captive Loans Are Straightforward
Toyota Financial, Ford Credit, Hyundai Finance — standard retail installment contracts with clean interest reporting.
- • Interest stated on every statement → deductible to $10,000
- • 0% APR promos: no interest, no deduction (and no loss)
- • Rebate-vs-low-APR choice unaffected by the deduction
Worked Example
Single buyer, $3,300 of captive-lender interest.
- • Deduction $3,300; $726 at 22%
Keep Reading
Frequently Asked Questions
Does dealer financing qualify for the OBBBA deduction?
Yes — captive-lender retail installment contracts are qualified vehicle loans.
What about 0% financing?
No interest paid means no deduction — but zero interest is already the better deal.