If you are planning to take out an auto loan to purchase a car, you now may get a tax break thanks to President Trump’s recently passed tax cut law. One of the many provisions introduced under the wide-ranging One Big Beautiful Bill Act is a tax deduction on auto loan interest.
However, eligibility for this tax break is contingent upon meeting narrow criteria — only new cars assembled in the U.S. qualify for the credit. And while the deduction will be up to $10,000, it likely “won’t do much to help car buyers facing price hikes from tariffs” that Trump is imposing, said NerdWallet.
How does the car loan interest deduction work?
Sign up for The Week’s Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
