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Auto Loans Are Not Tax Deductible A mortgage on your primary residence and a student loan can both be great deals because you can deduct interest payments from your income and pay taxes on a reduced amount. However, there is no such tax deduction on automobile loans.
Cars Loans Will Be Upside Down Most of the Time We all know how a car depreciates by thousands of dollars the moment you drive it off the lot. From then on, you are far more likely to owe more on the car than it is worth. Being upside down on a car loan is in many ways just as bad as being upside down on your home mortgage loan.