are there any tax exemptions on car financing in US?

Answer 1

Dependent on where you are in the US, some states allow you to deduct the sales tax you paid for the car. In the case of interest, you would be able to deduct it if the vehicle is used for business. However, the deduction is limited to the amount of time that the car is used for business. So, if the car is used 50% for pleasure and 50% for business, then your deduction is limited to the 50%. Also deductible is the gas, tolls, mileage and maintenance.
Let us assume that you began a new business in 2007. You purchased a vehicle and paid $2000 for interest and drove the car 15,000 miles for business. You would be entitled to deduct $1,000 for interest as expense and deduct mileage of 15,000 x .405 = $6,075

Answer 2

Not for a personal vehicle, no, unless you use a home equity loan to finance it.

If the vehicle is used for business use then the business portion of any finance charges is deductible as a business expense if you use the actual cost method of calculating the business deduction.

Answer 3

Assuming that this is for your personal car, interest on car loans is considered personal interest and not deductible.

Answer 4

It the car is used for business purposes, you can deduct actual expenses, or you can deduct mileage instead.

If you deduct actual expenses, then interest paid on the car loan is deductible.

If you deduct mileage, and you are self-employed, the interest on the car loan is deductible whether you deduct mileage or actual expenses.

However if you are employed, the interest on the car loan is deductible only if you deduct actual expenses.