Do auto leases qualify for the OBBBA car loan interest deduction?

No. Lease payments do not qualify for the One Big Beautiful Bill Act car-loan interest deduction.

The IRS Working Families Tax Cuts pages describe a temporary deduction for tax years 2025 through 2028 for interest paid on a loan used to purchase a qualified vehicle. In that same paragraph the IRS states, in parentheses: “Lease payments do not qualify.”

That is the federal rule this page is writing about. It is not a dealer talking point and it is not AssemblyAlert’s opinion.

What the IRS says a qualifying loan looks like

On that same IRS page, interest must be paid on a loan that is:

• originated after December 31, 2024
• used to purchase a vehicle whose original use starts with the taxpayer (used vehicles do not qualify)
• for personal use, not business or commercial use
• secured by a lien on the vehicle

A lease is not that loan. You are paying for the use of someone else’s vehicle. The IRS does not treat those payments as deductible qualified passenger-vehicle loan interest.

Lease vs buy is a cash question and a tax-gate question

Use the lease vs buy calculator to line up drive-off cash, monthly payments, and residual. The chart flags that a lease forfeits this interest deduction entirely.

That does not mean a purchase loan is deductible. Purchase loans still have to clear every other IRS gate: new vehicle, personal use, lien, dates, MAGI phaseout, the $10,000 annual cap, GVWR under 14,000 pounds, and final assembly in the United States.

Check US assembly before you argue about interest

Final assembly is a separate test. Paste the VIN in the [US-assembly checker](/). AssemblyAlert reads NHTSA vPIC `PlantCountry`. It passes only if that field is exactly UNITED STATES (USA). Puerto Rico is not a pass.

Then read the fact cards and the 2025–2028 checklist.

Not tax advice

This article cites the IRS Working Families Tax Cuts pages. It does not decide your return. AssemblyAlert never says a loan is deductible and never says you qualify.

Not tax advice. Not affiliated with the IRS or NHTSA. Owned by Record of Sale, LLC.