India, Feb. 21 -- Buying a new vehicle in 2025 could come with an added financial benefit at tax time. Under a provision in the Trump administration's "One Big Beautiful Bill," eligible buyers may be able to deduct up to $10,000 in interest paid on certain auto loans from their federal taxes, as long as they meet specific requirements.

The deduction applies to interest paid on loans taken out after December 31, 2024 for the purchase of a new vehicle. It is available for tax years 2025 through 2028. Importantly, taxpayers can use this benefit even if they choose the standard deduction instead of listing individual deductions on their tax return.

However, the vehicle must be for personal use. Business or commercial vehicles do not qualify...