: Under 2026 IRS rules, interest on a HELOC is only deductible if the funds are used to buy, build, or substantially improve the home securing the loan. Interest on funds used to buy a car is not tax-deductible . Summary: Is it worth it?

: HELOCs have no restrictions on vehicle age, mileage, or type, which can be helpful for older used cars that traditional lenders won't finance. Significant Risks & Drawbacks

: Since you pay the dealership in full with HELOC funds, you may have more power to negotiate a better price.

: The most critical risk is foreclosure . If you fail to make payments, you could lose your home, whereas an auto loan failure only leads to car repossession.

: Once the draw period ends, you enter a repayment phase (often 10–20 years) where you pay back both principal and interest.