A multitrillion-dollar tax package issued Monday by the Senate Finance Committee would offer a tax break for drivers on auto loan interest, but it doesn’t seem to be available for used cars, tax experts said.
The Senate GOP tax plan is part of a broader domestic policy bill that Republicans are trying to get to President Trump’s desk by the Fourth of July, and aims to partially fund tax cuts by slashing spending on health programs like Medicaid and the Affordable Care Act. The House passed its version — the “One Big Beautiful Bill Act” — in May.
One of the legislation’s many provisions would let taxpayers deduct up to $10,000 of auto loan interest from their taxable income in any given year. The average driver paid $1,332 of annual loan interest charges on new cars bought in 2024, according to AAA.
The tax break — which President Trump proposed when campaigning for president last year — would be available from 2025 through 2028.
Qualifying vehicles must be U.S.-assembled cars, minivans, vans, sport utility vehicles, pickup trucks, or motorcycles for personal use.
