Negative Equity Rollover Interest Deduction Calculator
For buyers carrying $5–10k of old loan into the new one.
The short answer: At the numbers below, the deduction is $4,700 — $1,034 back at 22% ($40 per paycheck).
New, US-assembled vehicle only
Modified Adjusted Gross Income
Car Loan Interest Deduction
$4,700
✅ 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.
One Loan Deducts Whole
When negative equity rolls into the new vehicle loan, it's one qualified loan — the interest deducts as a whole.
- • Rolled-in negative equity inside the new loan → its interest deducts with everything else
- • Separate personal loan paying off the old car → not a vehicle loan, no deduction on that piece
- • The deduction softens but never rescues rollover math
Worked Example
Single buyer, $4,700 of interest on a loan carrying $6k of rollover.
- • Deduction $4,700; $1,034 at 22%
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Frequently Asked Questions
Does rolled-in negative equity still deduct?
Yes — once inside the qualified vehicle loan, the combined interest deducts up to $10,000.
What if I paid off the old car with a personal loan instead?
That personal loan isn't secured by a vehicle purchase — its interest doesn't qualify.