by New Tax Deduction for Car Buyers
The U.S. government is considering a new tax plan that would allow deducting auto loan interest from taxable income. This proposal, supported by Republicans, could take effect as early as July. The deduction will be available for new cars manufactured in the USA, with a maximum amount of up to $10,000.
However, there are significant limitations: the proposal does not apply to used cars, trailers, campers, or ATVs. Furthermore, the deduction will only be available for loans originated after December 31, 2024, and only for the first loan on a specific vehicle.
Who Will Benefit?
Experts point out that the primary beneficiaries of this initiative will be wealthier citizens, who more frequently purchase new cars. However, the deduction amount gradually decreases for those with an income exceeding $100,000 (for individuals) or $200,000 (for married couples).
“The higher the income, the higher the tax rate, and consequently, the greater the benefit from this deduction,” noted tax policy expert Matt Gardner.
It is also worth considering that a potential increase in prices for imported cars could negate the benefit of the tax deduction for many buyers.
This initiative could stimulate the purchase of new American-made cars, but its impact on the market remains ambiguous. Many buyers, especially those with middle incomes, may not feel substantial financial support due to the limitations and potential price increases.
