{"id":17957,"date":"2025-07-10T21:45:18","date_gmt":"2025-07-10T21:45:18","guid":{"rendered":"https:\/\/finderica.com\/?p=17957"},"modified":"2025-07-10T21:45:18","modified_gmt":"2025-07-10T21:45:18","slug":"car-shopping-the-big-beautiful-bill-may-change-what-you-pay","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=17957","title":{"rendered":"Car Shopping? The &#8216;Big, Beautiful Bill&#8217; May Change What You Pay"},"content":{"rendered":"<div>\n<div class=\"_3VJt4n\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_28z5Fp _3-to_p\">The \u201cone big, beautiful bill\u201d was signed into law by President Donald Trump last week, with a gain for some car buyers and a loss for others. Consumers could now benefit from tax deductions on auto loans, but electric vehicle buyers will lose the savings provided by EV tax credits. <\/span><\/p>\n<\/div>\n<h2 class=\"_3P4ktl zeCuXk _28z5Fp _2w4PM3 _1My7YX\" data-currency=\"Text\"><span class=\"_3P4ktl zeCuXk _28z5Fp _3-to_p\">Auto loan interest now tax-deductible for some borrowers<\/span><\/h2>\n<div class=\"_3VJt4n\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_28z5Fp _3-to_p\">Car buyers who finance will be able to deduct up to $10,000 a year for car loan interest they pay. The deduction is \u201cabove-the-line,\u201d meaning it will apply to people who claim the standard deduction and those who itemize. <\/span><\/p>\n<\/div>\n<div class=\"_3VJt4n\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_28z5Fp _3-to_p\">To be eligible, car buyers and their cars will need to meet the following criteria<\/span><button type=\"button\" aria-expanded=\"false\" aria-controls=\"nw-aria-ssr-4-2-1\" aria-haspopup=\"dialog\" data-currency=\"PopoverDisclosure\" class=\"Ay_QNo\"><span class=\"_32SMwQ\" aria-hidden=\"true\"><\/span><span class=\"_21EZtY _28z5Fp _2JIHTU vLzrnO\" data-currency=\"Link\" target=\"_self\"><sup>[0]<\/sup><\/span><\/button><span id=\"nw-aria-ssr-4-2-1\" hidden=\"\" style=\"display:none;position:fixed;left:100%;top:100%\" role=\"dialog\" tabindex=\"0\" data-dialog=\"true\" class=\"_3NQ2Lf\"><span style=\"font-size:30px;width:1em;height:1em;pointer-events:none;bottom:100%\" class=\"qytd5D _3c_2vo\" aria-hidden=\"true\"><\/span><\/span><span class=\"_28z5Fp _3-to_p\">.<\/span><\/p>\n<\/div>\n<h3 class=\"_21EZtY eHXiWO _3_uGsM _28z5Fp _28CJ7N _1My7YX\" data-currency=\"Text\"><span class=\"_21EZtY eHXiWO _3_uGsM _28z5Fp _3-to_p\">Vehicle qualifications<\/span><\/h3>\n<div class=\"_3VJt4n\">\n<ul data-currency=\"List\" class=\"_2cGsD8\">\n<li class=\"_3ho7K- _1pCihN olf-Ig\">\n<div class=\"_3wlVa6 _2247K8\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_3VmbAf _28z5Fp _3-to_p\"><span class=\"_3VmbAf _28z5Fp _3-to_p\">New purchase.<\/span><\/span><span class=\"_28z5Fp _3-to_p\"> The deduction applies only to new vehicles, not used ones.<\/span><\/p>\n<\/div>\n<\/li>\n<li class=\"_3ho7K- _1pCihN olf-Ig\">\n<div class=\"_3wlVa6 _2247K8\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_3VmbAf _28z5Fp _3-to_p\"><span class=\"_3VmbAf _28z5Fp _3-to_p\">U.S. assembly.<\/span><\/span><span class=\"_28z5Fp _3-to_p\"> The vehicle must have final assembly in the United States.<\/span><\/p>\n<\/div>\n<\/li>\n<li class=\"_3ho7K- _1pCihN olf-Ig\">\n<div class=\"_3wlVa6 _2247K8\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_3VmbAf _28z5Fp _3-to_p\"><span class=\"_3VmbAf _28z5Fp _3-to_p\">Personal use.<\/span><\/span><span class=\"_28z5Fp _3-to_p\"> The deduction is for personal-use vehicles, excluding commercial vehicles and leases.<\/span><\/p>\n<\/div>\n<\/li>\n<\/ul>\n<\/div>\n<h3 class=\"_21EZtY eHXiWO _3_uGsM _28z5Fp _28CJ7N _1My7YX\" data-currency=\"Text\"><span class=\"_21EZtY eHXiWO _3_uGsM _28z5Fp _3-to_p\">Income limitations<\/span><\/h3>\n<div class=\"_3VJt4n\">\n<ul data-currency=\"List\" class=\"_2cGsD8\">\n<li class=\"_3ho7K- _1pCihN olf-Ig\">\n<div class=\"_3wlVa6 _2247K8\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_3VmbAf _28z5Fp _3-to_p\"><span class=\"_3VmbAf _28z5Fp _3-to_p\">Single filers. <\/span><\/span><span class=\"_28z5Fp _3-to_p\">The deduction begins phasing out at a modified adjusted gross income (MAGI) of $100,000.\u00a0<\/span><\/p>\n<\/div>\n<\/li>\n<li class=\"_3ho7K- _1pCihN olf-Ig\">\n<div class=\"_3wlVa6 _2247K8\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_3VmbAf _28z5Fp _3-to_p\"><span class=\"_3VmbAf _28z5Fp _3-to_p\">Joint filers. <\/span><\/span><span class=\"_28z5Fp _3-to_p\">Phase-out begins at a MAGI of $200,000.<\/span><\/p>\n<\/div>\n<\/li>\n<li class=\"_3ho7K- _1pCihN olf-Ig\">\n<div class=\"_3wlVa6 _2247K8\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_3VmbAf _28z5Fp _3-to_p\"><span class=\"_3VmbAf _28z5Fp _3-to_p\">Phase-out amount. <\/span><\/span><span class=\"_28z5Fp _3-to_p\">For every $1,000 of income over the single and joint filer threshold, the available deduction declines by $200.\u00a0<\/span><\/p>\n<\/div>\n<\/li>\n<\/ul>\n<\/div>\n<div class=\"_3VJt4n\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_28z5Fp _3-to_p\">The intent of the auto loan interest deduction is to make cars more affordable for buyers, given that average car prices and interest rates remain high. But the benefit for some car buyers will be limited.<\/span><\/p>\n<\/div>\n<div class=\"_3VJt4n\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_28z5Fp _3-to_p\">In fact, a person would need to get an auto loan of more than $110,000 to benefit from the maximum deduction, according to Cox Automotive Chief Economist Jonathan Smoke. <\/span><\/p>\n<\/div>\n<div class=\"_3VJt4n\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_28z5Fp _3-to_p\">For context, the average new vehicle transaction price is about $49,000. Most vehicles priced at $110,000 or above would be luxury sedans or sports cars, and only about 1% of all auto loans are of that size. <\/span><\/p>\n<\/div>\n<div class=\"_3VJt4n\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_28z5Fp _3-to_p\">\u201cThe typical new loan really would only see around $500 benefit, and that\u2019s in year one and then declining over time,\u201d Smoke said at the Cox Automotive 2025 Mid-Year Review on June 25. <\/span><\/p>\n<\/div>\n<div class=\"_3VJt4n\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_28z5Fp _3-to_p\">Average monthly car payments are around $750, and a record one in five new car buyers committed to $1,000+ payments in the second quarter of 2025, according to Edmunds.com.  So, for most borrowers, the annual savings in loan interest would be less than their monthly car payment. <\/span><\/p>\n<\/div>\n<div class=\"_3VJt4n\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_28z5Fp _3-to_p\">The auto loan interest deduction is also temporary \u2014 effective for tax years 2025 through 2028.<\/span><\/p>\n<\/div>\n<div class=\"_3VJt4n\">\n<div>\n<div class=\"PIqV0k wnPEbn BgIPML _1WkR_n paYFr8 _1SNXHI _1voSX6 _3xUsF1 oE4ByK _119vwC _2tdJ6e\">\n<p><span class=\"_3P4ktl _2LuWPZ _28z5Fp N36gAq\" data-currency=\"Text\">Did you know&#8230;<\/span><\/p>\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_28z5Fp _3-to_p\">Deducting auto loan interest isn\u2019t a new idea. Prior to 1991, auto loan interest could be claimed as an itemized tax deduction, until it was phased out as part of the Tax Reform Act of 1986.<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n<h2 class=\"_3P4ktl zeCuXk _28z5Fp _2w4PM3 _1My7YX\" data-currency=\"Text\"><span class=\"_3P4ktl zeCuXk _28z5Fp _3-to_p\">Say goodbye to EV tax credits<\/span><\/h2>\n<div class=\"_3VJt4n\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_28z5Fp _3-to_p\">In the past several years, EV buyers and lessees have taken advantage of federal tax credits established under the Inflation Reduction Act \u2014 up to $7,500 for new EVs and $4,000 for used. The \u201cone big, beautiful bill\u201d eliminates this EV credit for vehicles purchased and leased after September 30, 2025<\/span><button type=\"button\" aria-expanded=\"false\" aria-controls=\"nw-aria-ssr-4-9-1\" aria-haspopup=\"dialog\" data-currency=\"PopoverDisclosure\" class=\"Ay_QNo\"><span class=\"_32SMwQ\" aria-hidden=\"true\"><\/span><span class=\"_21EZtY _28z5Fp _2JIHTU vLzrnO\" data-currency=\"Link\" target=\"_self\"><sup>[0]<\/sup><\/span><\/button><span id=\"nw-aria-ssr-4-9-1\" hidden=\"\" style=\"display:none;position:fixed;left:100%;top:100%\" role=\"dialog\" tabindex=\"0\" data-dialog=\"true\" class=\"_3NQ2Lf\"><span style=\"font-size:30px;width:1em;height:1em;pointer-events:none;bottom:100%\" class=\"qytd5D _3c_2vo\" aria-hidden=\"true\"><\/span><\/span><span class=\"_28z5Fp _3-to_p\">.<\/span><\/p>\n<\/div>\n<div class=\"_3VJt4n\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_28z5Fp _3-to_p\">Car buyers planning to take advantage of EV tax credits should do so sooner than later. In addition to grabbing the credit before it is gone, car shoppers may find more EV incentives at dealerships wanting to move inventory.<\/span><\/p>\n<\/div>\n<div class=\"_3VJt4n\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_28z5Fp _3-to_p\">Auto industry groups had pushed for more time to promote EV sales before the tax credit ends, but their attempts were unsuccessful. <\/span><\/p>\n<\/div>\n<h2 class=\"_3P4ktl zeCuXk _28z5Fp _2w4PM3 _1My7YX\" data-currency=\"Text\"><span class=\"_3P4ktl zeCuXk _28z5Fp _3-to_p\">Will interest savings offset tariff-driven price increases?<\/span><\/h2>\n<div class=\"_3VJt4n\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_28z5Fp _3-to_p\">The auto loan interest deduction is meant to improve vehicle affordability, but it won\u2019t do much to help car buyers facing price hikes from tariffs. Here\u2019s a breakdown to explain why.<\/span><\/p>\n<\/div>\n<div class=\"_3VJt4n\">\n<ul data-currency=\"List\" class=\"_2cGsD8\">\n<li class=\"_3ho7K- _1pCihN olf-Ig\">\n<div class=\"_3wlVa6 _2247K8\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_3VmbAf _28z5Fp _3-to_p\"><span class=\"_3VmbAf _28z5Fp _3-to_p\">Imported cars have a 25% tariff. <\/span><\/span><span class=\"_28z5Fp _3-to_p\">If the car you buy is foreign-built, you\u2019re likely to pay more due to tariffs \u2014 and you can\u2019t claim the loan interest deduction. A lose-lose.\u00a0<\/span><\/p>\n<\/div>\n<\/li>\n<\/ul>\n<\/div>\n<div class=\"_3VJt4n\">\n<ul data-currency=\"List\" class=\"_2cGsD8\">\n<li class=\"_3ho7K- _1pCihN olf-Ig\">\n<div class=\"_3wlVa6 _2247K8\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_3VmbAf _28z5Fp _3-to_p\"><span class=\"_3VmbAf _28z5Fp _3-to_p\">Imported car parts have a 25% tariff. <\/span><\/span><span class=\"_28z5Fp _3-to_p\">All cars with final assembly in the U.S. use some amount of foreign-made content, according to the cars.com American-made index. Anderson Economic Group estimates parts tariffs on these cars will increase their price by at least $2,000. So, while you can claim the interest deduction, its benefit is likely to fall short of the higher price you pay for the car. A win (sort of)-lose.<\/span><\/p>\n<\/div>\n<\/li>\n<\/ul>\n<\/div>\n<div class=\"_3VJt4n\">\n<ul data-currency=\"List\" class=\"_2cGsD8\">\n<li class=\"_3ho7K- _1pCihN olf-Ig\">\n<div class=\"_3wlVa6 _2247K8\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_3VmbAf _28z5Fp _3-to_p\"><span class=\"_3VmbAf _28z5Fp _3-to_p\">100%-American-made cars have no tariffs. <\/span><\/span><span class=\"_28z5Fp _3-to_p\">In theory, this should be a win-win, because this category of vehicles would have no tariff-related price increases and would qualify for the interest deduction, but they don\u2019t actually exist (refer to the second bullet point).<\/span><\/p>\n<\/div>\n<\/li>\n<\/ul>\n<\/div>\n<div class=\"_3VJt4n\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_28z5Fp _3-to_p\">While the tax deduction auto loan interest may be a small win for some car buyers, it doesn\u2019t go far enough to offset the expected cost increase of tariffs for most. <\/span><\/p>\n<\/div>\n<h2 class=\"_3P4ktl zeCuXk _28z5Fp _2w4PM3 _1My7YX\" data-currency=\"Text\"><span class=\"_3P4ktl zeCuXk _28z5Fp _3-to_p\">Smart steps to reduce the cost of buying a car<\/span><\/h2>\n<div class=\"_3VJt4n\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_28z5Fp _3-to_p\">Whether you gain a tax deduction or lose a tax credit from passage of the \u201cone big, beautiful bill,\u201d high car prices and interest rates make it more important than ever to prepare before purchasing a vehicle. <\/span><\/p>\n<\/div>\n<div class=\"_3VJt4n\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_28z5Fp _3-to_p\">Here are strategies to help you reduce your car cost and secure a monthly payment that fits your budget.<\/span><\/p>\n<\/div>\n<div class=\"_3VJt4n\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_3VmbAf _28z5Fp _3-to_p\"><span class=\"_3VmbAf _28z5Fp _3-to_p\">1. Research pricing benchmarks.<\/span><\/span><span class=\"_28z5Fp _3-to_p\"> Before stepping into a dealership, look up the fair market value of the vehicle you\u2019re considering. Use online tools like<\/span><a class=\"_28z5Fp _2JIHTU vLzrnO _3mJuQ4\" href=\"https:\/\/www.kbb.com\" data-currency=\"Link\" rel=\"nofollow noopener noreferrer\" target=\"_self\"><span class=\"_28z5Fp _3-to_p\"> <\/span><\/a><span class=\"_28z5Fp _3-to_p\">Kelley Blue Book, Edmunds or NADA Guides to get a realistic idea of what you should expect to pay.<\/span><\/p>\n<\/div>\n<div class=\"_3VJt4n\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_3VmbAf _28z5Fp _3-to_p\"><span class=\"_3VmbAf _28z5Fp _3-to_p\">2. Understand how auto loans work. <\/span><\/span><span class=\"_28z5Fp _3-to_p\">If you plan to finance, take time to <\/span><span class=\"_28z5Fp _3-to_p\">learn the basics of auto loans<\/span><span class=\"_28z5Fp _3-to_p\"> \u2014 including how car loan length affects your total cost and how your credit profile impacts your interest rate. Being informed can help you avoid unfavorable loan terms.<\/span><\/p>\n<\/div>\n<div class=\"_3VJt4n\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_3VmbAf _28z5Fp _3-to_p\"><span class=\"_3VmbAf _28z5Fp _3-to_p\">3. Compare financing offers. <\/span><\/span><span class=\"_28z5Fp _3-to_p\">Don\u2019t automatically accept the first loan offer you receive. Compare rates and terms from banks, credit unions and online lenders to <\/span><span class=\"_28z5Fp _3-to_p\">find the most competitive auto loan<\/span><span class=\"_28z5Fp _3-to_p\">. Even a small difference in interest rate can lead to significant savings over time.<\/span><\/p>\n<\/div>\n<div class=\"_3wlVa6 _2247K8\">\n<p class=\"_28z5Fp _3-to_p\"><span class=\"_3VmbAf _28z5Fp _3-to_p\"><span class=\"_3VmbAf _28z5Fp _3-to_p\">4. Use an auto loan calculator. <\/span><\/span><span class=\"_28z5Fp _3-to_p\">Before applying for a loan, run the numbers using an <\/span><span class=\"_28z5Fp _3-to_p\">auto loan calculator<\/span><span class=\"_28z5Fp _3-to_p\">. Adjust variables like loan amount, interest rate, term and down payment to find a monthly payment that aligns with your financial goals.<\/span><\/p>\n<\/div>\n<\/div>\n<p><a href=\"https:\/\/www.nerdwallet.com\/article\/loans\/auto-loans\/big-beautiful-bill-car-buyers\" target=\"_blank\" rel=\"noopener\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The \u201cone big, beautiful bill\u201d was signed into law by President Donald Trump last week, with a gain for some car buyers and a loss for others. Consumers could now benefit from tax deductions on auto loans, but electric vehicle buyers will lose the savings provided by EV tax credits. Auto loan interest now tax-deductible<\/p>\n","protected":false},"author":1,"featured_media":17958,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[195],"tags":[6210,242,856,793,316,41,867],"class_list":{"0":"post-17957","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-beautiful","9":"tag-big","10":"tag-bill","11":"tag-car","12":"tag-change","13":"tag-pay","14":"tag-shopping"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/17957","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=17957"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/17957\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/17958"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17957"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17957"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17957"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}