Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

Full Bio →

Written by

Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

Full Bio →

Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Jul 19, 2021

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance provider and cannot guarantee quotes from any single provider. Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about life insurance. Our goal is to be an objective, third-party resource for everything life insurance related. We update our site regularly, and all content is reviewed by life insurance experts.


A common question folks ask is “if car insurance is tax-deductible?”  The answer is simple; yes and no.

Of course, it really depends on the type of car insurance you’re referring to.  When it comes to personal auto insurance, the answer is a resounding NO!

Unfortunately, we cannot take tax deductions for insurance premiums paid on our personal car insurance policy.

In general, if you do not pay taxes when purchasing or acquiring something, car insurance in this instance, there is likely nothing in the tax code that allows for deductions on the expense.

What About Business Use?

You may be able to deduct auto insurance premiums if you are self-employed and use your vehicle for business purposes. To be clear, you will not qualify for a tax deduction for your daily drive to work…you must use the vehicle as part of your business.

For example, you may be a traveling salesperson who does not have an office location to work from. On the other hand, you don’t qualify for a tax deduction if you are an accountant who drives five miles back and forth to your office each day.

Be sure not to include your regular commute when calculating your total expense for business use in a given year. It’s not an “all or nothing” deduction. If your mileage is split 50/50 for commute and “business travel,” you can only deduct 50% of your mileage.

Compare Quotes From Top Companies and Save

 Secured with SHA-256 Encryption

Basically, you have two options:

If you do qualify to deduct your insurance premium expenses from your tax bill based on the information above, you’ll need to decide which of the two options the IRS allows is best for you.

The first option is to deduct actual expenses which include: oil, gas, tolls, depreciation, garage and parking fees, repairs, licenses and even tires.  If you choose this option, you’re able to deduct your car insurance premium as well as an actual expense.

The second option is to deduct the standard rate, which is simply a dollar amount based on the mileage you rack up for work.  The second option is probably the most common, as it is the easiest to keep track of.

For example, the IRS allows $.51 per mile as the standard deduction for 2011. You are able to deduct $2,550 from your taxable income if you racked up 5,000 miles of “qualifying” business travel in 2011. The second option (standard mileage deduction) is probably the most common method, as it requires much less effort from a tracking standpoint.

Normally, this is where I would tell you to contact your independent insurance agent or direct insurer if you have additional questions on whether car insurance is tax-deductible in your particular situation.

However, this time I am going to refer you to the taxman, or the IRS.  And your CPA. While the odds are your agent can help you with this matter, they will most likely decline to do so as they are not licensed to offer tax advice and therefore not “insured” to give it.

Read more: Is homeowner’s insurance tax-deductible?