Core Insights - A new tax credit in the "One Big, Beautiful Bill" allows taxpayers to deduct part of the interest paid on car loans for new vehicles assembled in the U.S. from their 2025 taxes, with a maximum deduction of $10,000 [2][8] Group 1: Tax Credit Details - The tax credit applies only to new vehicles that underwent final assembly in the United States, with approximately 30% of vehicle models for sale in the U.S. qualifying in 2025 [3] - Taxpayers can use the National Highway Traffic Safety Administration's VIN Decoder to verify the assembly location of their vehicle, which is necessary for claiming the deduction [4] - The deduction is available to both itemizing and non-itemizing taxpayers, with income limits set at $150,000 for individuals and $250,000 for joint filers [8] Group 2: Loan and Vehicle Requirements - The car loan must originate after December 31, 2024, and be secured by a lien on the vehicle, applicable to various types of vehicles under 14,000 pounds for personal use [9] - Loans for used vehicles do not qualify for the deduction, which phases out for single taxpayers with a modified adjusted gross income (MAGI) of $100,000, and completely phases out at $150,000 [9] - For joint filers, the deduction begins to phase out at a combined MAGI of $200,000 and is fully phased out at $250,000 [9] Group 3: Market Context - Rising car prices due to supply chain disruptions from the COVID-19 pandemic and tariffs on vehicles and auto parts have increased manufacturing costs, making this deduction significant for affordability [5]