Does a New Subaru Qualify for a Tax Break in 2026?

Some new Subarus can. Under the federal tax law passed in 2025, interest paid on a loan for a new vehicle that had its final assembly in the United States can be deducted, up to $10,000 a year, for loans taken out in 2025 through 2028. Several Subaru models sold at First Team Subaru Norfolk are assembled at Subaru’s plant in Lafayette, Indiana, which is what makes them eligible.

The older federal clean vehicle tax credit is a different program. It ended for vehicles acquired after September 30, 2025, and it never applied to standard hybrids such as the Crosstrek Hybrid or Forester Hybrid.

Who Qualifies for the Car Loan Interest Deduction

  • New vehicles only: The vehicle’s original use has to start with you. Used vehicles do not qualify.
  • A loan, not a lease: Lease payments do not count. The loan has to be secured by the vehicle and taken out after December 31, 2024.
  • Personal use: The vehicle has to be for personal use, not business use.
  • Final assembly in the U.S.: Check the vehicle’s window sticker or the plant code in its VIN to confirm.
  • Income limits: The deduction phases down for income above $100,000, or $200,000 for joint filers.
  • No itemizing needed: You can claim it whether you itemize or take the standard deduction. You will need the vehicle’s VIN on your return.

Which Subarus Are Built in the U.S.?

Subaru builds the Crosstrek, Forester and Ascent at its Lafayette, Indiana plant. The model alone does not settle it, because a model can be built in more than one country, so our sales team will show you the assembly location for the exact vehicle you are looking at before you buy.

Common Questions

Does the Crosstrek Hybrid get a federal tax credit?

No. The federal clean vehicle credit only applied to plug-in and fully electric vehicles, and it ended September 30, 2025. A U.S.-assembled Crosstrek Hybrid bought with a loan may still qualify for the car loan interest deduction.

Is this tax advice?

No. This is a summary of the IRS rules. Talk to your tax professional about your own return.

Where is First Team Subaru Norfolk?

6633 East Virginia Beach Boulevard, Norfolk, VA 23502.