Republicans are trying to make good on President Donald Trump’s campaign promise to give Americans a tax break on their car loan interest. However, as structured, most households wouldn’t get a substantial financial benefit, economists said.
House and Senate Republicans proposed giving drivers a tax deduction of up to $10,000 on annual interest for new auto loans in their so-called “One Big Beautiful Bill Act.” The tax break would be temporary, ending after 2028.
But few drivers pay that much annual interest, said Jonathan Smoke, chief economist at Cox Automotive, an auto market research firm.
It’s “pretty rare,” he said.
Auto loans don’t have annual interest charges of $10,000 or more outside of large loans on “exotic” vehicles, Smoke said.
