You bought a new car. You financed it. Now you want to claim the car loan interest deduction on your taxes. But the IRS requires one piece of information you might not have checked - where your vehicle's final assembly happened.
I track IRS rules for the car loan interest deduction because the final assembly requirement determines whether your loan qualifies. The One Big Beautiful Bill Act limits the deduction to vehicles assembled in the United States. A car built in Mexico or Canada doesn't qualify, even if it's an American brand.
Here's the simple way to check your vehicle's final assembly location using your VIN, what the results mean, and the exact verification process that confirms whether your car qualifies for the deduction. This check takes three minutes and tells you definitively if you can claim the interest.
Why Final Assembly Location Matters for the Deduction
The car loan interest deduction runs from 2025 through 2028. During those years, you can deduct up to $10,000 annually in vehicle loan interest if you're married filing jointly, or $5,000 if you file single. But one requirement stops many vehicles from qualifying - final assembly must occur in the United States.
Final assembly means the last major manufacturing step where the vehicle comes together as a complete car. This happens at a specific plant where workers install the engine, transmission, interior, and other components into the body. The vehicle rolls off that plant's assembly line as a finished car ready for delivery.
The IRS chose this requirement to support domestic manufacturing. Vehicles assembled in Canada, Mexico, Japan, Korea, Germany, or any location outside the United States don't qualify for the deduction. The rule doesn't care where individual parts come from - engines can be made in Mexico, transmissions in Japan, and electronics in Korea. What matters is where the final vehicle assembly took place.
This creates surprises. A Ford F-150 assembled in Dearborn, Michigan qualifies. A Ford Maverick assembled in Mexico doesn't qualify, even though both are Ford trucks. A Honda Accord built in Ohio qualifies. A Honda CR-V built in Canada doesn't qualify.
The deduction caps don't change based on assembly location. If your vehicle qualifies, you follow the same income limits and interest caps as everyone else. The assembly requirement acts as a qualifying filter - pass this test and you move to the next requirements. Fail this test and nothing else matters.
You must report your vehicle's VIN on your tax return when claiming the deduction. The IRS can verify the assembly location through the VIN. If you claim the deduction for a non-qualifying vehicle, the IRS will disallow it and might assess penalties for incorrect filing.
Finding Your VIN - Three Simple Locations
Every vehicle sold in the United States since 1981 has a 17-character VIN. You need this number to verify assembly location. Check three places to find it.
First, look through your windshield on the driver's side. Stand outside the car and look down at the corner where the dashboard meets the glass. You'll see a small metal plate with 17 characters stamped on it. The plate sits low on the dashboard, usually visible without opening the door. Bright sunlight helps you read it clearly.
Second, open your driver's side door and check the door jamb. Look at the vertical edge where the door latches. Most vehicles have a sticker or metal plate listing the VIN along with tire pressure specs, paint codes, and manufacturing dates. This location usually shows the VIN more clearly than the dashboard plate.
Third, check your vehicle registration card or title paperwork. Every state lists the VIN on these documents. If you keep your registration in your glove box, you have instant access to the VIN without getting out of the car.
Write down all 17 characters exactly as they appear. VINs use numbers 0-9 and most letters, but they never include I (i), O (o), or Q (q) because these letters look too similar to numbers 1 and 0. If you see what looks like an O, it's actually a zero.
Double-check your transcription. One wrong character produces incorrect results when you decode the VIN. The difference between a 3 and an 8, or a B and an 8, changes which plant the decoder identifies.
Quick VIN First Character Check
The first character of your VIN tells you immediately whether your vehicle might qualify. Before using the full NHTSA decoder, this quick check gives you a preliminary answer.
VINs starting with 1, 4, or 5 indicate United States assembly. If your VIN begins with one of these numbers, your vehicle likely qualifies for the deduction. These codes represent different US manufacturing regions - 1 covers most US plants, 4 covers vehicles built in specific regions, and 5 indicates additional US assembly facilities.
Some VINs starting with 7 also indicate US assembly, but only specific combinations. Look at the full first character - if it's 70, or ranges from 7F through 7Z, the vehicle was assembled in the United States. A VIN starting with 7A through 7E indicates assembly outside the US.
VINs starting with 2 indicate Canadian assembly. These vehicles don't qualify. VINs starting with 3 indicate Mexican assembly - also don't qualify. VINs starting with J indicate Japanese assembly, K indicates Korean, W indicates German. None of these qualify for the US car loan interest deduction.
This first-character check gives you a quick answer, but it's not definitive. Some manufacturers assemble the same model at multiple plants in different countries. A 2026 Honda Accord might start with 1 if built in Ohio, or with J if built in Japan. You need the full VIN to know which plant produced your specific vehicle.
The IRS requires verification through official sources. The NHTSA VIN decoder provides this verification. Even if your VIN starts with 1, 4, or 5, complete the full decoder check before claiming the deduction.
Using the NHTSA VIN Decoder Step by Step
The National Highway Traffic Safety Administration operates a free VIN decoder that shows your vehicle's assembly plant and country. This tool provides the official verification the IRS accepts for the car loan interest deduction.
Start by opening your web browser and going to vpic.nhtsa.dot.gov/decoder/. This is the official NHTSA site. Don't use third-party VIN decoders for tax purposes - stick with the government tool.
You'll see a simple page with one input box labeled "Enter VIN." Click in that box and type your complete 17-character VIN exactly as it appears on your vehicle. The decoder accepts capital letters, so you don't need to worry about case. Type the VIN carefully - entering 8 instead of B, or 0 instead of O, gives you wrong results.
After entering the VIN, click the blue "Decode VIN" button below the input box. The decoder processes your request and loads a results page. This takes three to five seconds. Don't refresh the page or click again - wait for the results to appear.
The results page shows dozens of data fields about your vehicle. You'll see make, model, model year, body type, engine specs, transmission type, brake system, and more. Scroll past all these details. The information you need appears near the bottom of the page.
Look for a section labeled "Plant Information" or "Plant Company Name" and "Plant Country." These fields sit near the end of the results, often after vehicle feature specifications. The Plant Country field tells you exactly where final assembly occurred.
The Plant Country field will show "UNITED STATES" if your vehicle qualifies, or another country name if it doesn't. This one field determines qualification. If it says "UNITED STATES," your vehicle passes the assembly requirement. If it says anything else - "MEXICO," "CANADA," "JAPAN," "GERMANY," or any other country - your vehicle doesn't qualify for the deduction.
The Plant Company Name field identifies the specific assembly facility. For example, you might see "Honda of America Mfg., Inc., Marysville Auto Plant" or "Ford Michigan Assembly Plant." This detail helps you understand exactly which facility built your car, but for tax purposes, only the Plant Country matters.
Take a screenshot of the results page showing the Plant Country field. Save this image with your tax documents. If the IRS questions your deduction, this screenshot proves your vehicle's assembly location.
Some VINs produce error messages. This happens with very new vehicles whose data hasn't loaded yet. Try again in a few days if you get an error.
What the Results Tell You
The Plant Country result gives you a definitive answer about qualification. Here's what different results mean and how they affect your deduction eligibility.
If the decoder shows "UNITED STATES" as the Plant Country, your vehicle passes the assembly requirement. You can move to checking the other qualifications - vehicle weight, loan origination date, personal use status, and income limits. The assembly hurdle is cleared. Keep the decoder results with your tax documents as proof.
If the decoder shows "MEXICO," your vehicle doesn't qualify. Mexican assembly is common for compact cars and some trucks. If it shows "CANADA," "JAPAN," "KOREA," "GERMANY," or any other non-US country, your vehicle doesn't qualify.
Some vehicles split production across multiple countries. A Toyota Camry might come from Georgetown, Kentucky (qualifying) or from Japan (not qualifying). A Honda Accord could be from Marysville, Ohio (qualifying) or from Japan (not qualifying). The VIN tells you which plant built your specific vehicle. Two identical-looking cars from the same model year might have different qualification status based solely on which plant produced them.
For vehicles already purchased, the decoder result is final. You can't change where your vehicle was assembled. If it doesn't qualify, you don't get the deduction. But you still benefit from knowing - you won't waste time tracking interest or claiming a deduction the IRS will disallow.
Other Requirements Beyond Assembly Location
US final assembly is just one requirement. Your vehicle must meet four additional criteria to qualify for the car loan interest deduction.
First, your vehicle's gross vehicle weight rating must stay under 14,000 pounds. Most cars, SUVs, minivans, and pickup trucks fall well below this limit. Heavy-duty trucks like Ford F-350, Ram 3500, and similar vehicles often exceed 14,000 pounds GVWR and don't qualify.
Second, your vehicle must be for personal use. Business vehicles, fleet vehicles, and commercial vehicles don't qualify for this deduction. The personal-use requirement means you drive the vehicle for commuting, errands, family trips, and personal transportation - not as a business asset. If you claim business mileage deductions or Section 179 depreciation on the vehicle, it doesn't qualify for the personal-use car loan interest deduction. You can't use both deductions on the same vehicle.
Third, the vehicle must be new when you purchased it. Used vehicle loans don't qualify for the deduction. This applies even if you bought a one-year-old car with minimal mileage. The law specifies that original use must begin with you, the taxpayer. If someone else owned the vehicle first, even for one day, it doesn't qualify.
Fourth, your loan must have originated after December 31, 2024. Loans taken out in 2024 or earlier don't qualify, even if you refinanced them in 2025. The law applies to loans for vehicles purchased in 2025, 2026, 2027, and 2028. If you bought your car with a loan in December 2024, that loan doesn't qualify. If you bought your car in January 2025, the loan qualifies if all other requirements are met.
Refinanced loans get special treatment. The new loan qualifies only if the refinanced amount doesn't exceed your original principal and stays secured by the same vehicle.
Income limits create a fifth restriction. The deduction phases out for single filers with modified adjusted gross income above $100,000 and married filing jointly above $200,000. If your income exceeds these limits, you lose part or all of the deduction.
Verify Now, Claim Later
The VIN check takes three minutes. Find your VIN on the dashboard or door jamb. Go to vpic.nhtsa.dot.gov/decoder/ and enter it. Scroll to the Plant Country field in the results. If it says "UNITED STATES," your vehicle passes the assembly requirement.
Screenshot the results page and save it with your 2025 tax documents. You'll need your VIN when filing anyway - the IRS requires it on your return when claiming the deduction. Having the decoder screenshot ready proves your vehicle qualifies if questions arise.
If your vehicle doesn't qualify due to foreign assembly, you've saved yourself time. You won't track interest payments or claim a deduction the IRS will reject. If your vehicle does qualify, check the other requirements - weight, personal use, loan date, and income limits. Once you clear all hurdles, you can deduct up to $10,000 in annual car loan interest through 2028.
