Who can deduct car loan interest
Rules vary. Business vehicles, some self-employed mileage arrangements and certain jurisdictions allow interest to be deducted; private car finance usually does not.
This calculator applies the rate you enter; it does not decide whether you are eligible.
Worked example
£1,800 of interest at a 40% marginal rate saves £720 in tax, so the net interest cost is £1,080.
The saving is £60 a month across the year.
Keep records
Keep the lender's annual interest statement and your agreement. If you use the vehicle for business and private motoring, apportion the interest.
Ask an accountant before relying on the figure in a return.
Inputs for the car loan tax deduction calculator
Interest paid in the year
The interest element of your payments for the tax year.
Your marginal tax rate
The rate you pay on the last slice of income.
CALCULATOR QUESTIONS
Car loan tax deduction calculator questions
How much tax does £1,800 of interest save?
£720 at 40%, leaving £1,080 of net interest.
Can private car loan interest be deducted?
Usually not. Check your local rules.
Do I need to apportion business use?
Yes, if the car is used privately as well as for business.
Is the saving monthly?
It arises annually, but the monthly equivalent is shown for budgeting.