Is car loan interest deductible on income tax return?
My opinion is that car loan interest is deductible to the extent the car is used for business. You need to work with a tax professional on this one, however, because this is one of the most misused provisions by individuals. That means it’s an audit risk, so you need to do it right! There are rules as to whether to use the mileage deduction or to deduct all expenses related to the automobile (gas, repair, maintenance, insurance, and loan interest!) but that depends on your situation. I myself deduct everything through my corporation, and carefully note every possible instance of business and personal use of my car, in case of an audit.
some auto loan companies will do a home lien with the auto lien which would make it a home loan, and thus it is deductible. I used the Patriot Credit Union in Orange County, when I bought my car, and they had a program that made the interest deductible. So, in general, unless you go to a special loan program, auto interest is not deductible.
