What is a Vehicle lien?
A vehicle lien represents a legal claim that a lender holds against a vehicle until full loan repayment. Under the One Big Beautiful Bill Act, the car loan interest deduction requires that qualifying loans be secured by a vehicle lien, documented in the title showing the lienholder information. This ensures deduction claims involve legitimate vehicle financing rather than personal loans secured by existing vehicles. Coordinating Traditional 401k contributions reduces modified adjusted gross income, preserving full deduction eligibility during phase-out ranges.
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