Get PolitiFact in your inbox.
Trump megabill includes tax break for car loans
New Corvettes are delivered to a Chevrolet dealer in Wheeling, Ill., on May 9, 2023. (AP)
When President Donald Trump signed his signature tax and spending legislation July 4, it included a provision he had promised during the 2024 presidential campaign: a temporary tax break for car purchasers.
The new law, billed by Trump as the One Big Beautiful Bill, allows taxpayers who purchase new vehicles with final assembly in the United States to deduct the loan interest they paid up to $10,000 per year.
The provision begins phasing out for taxpayers whose income exceeds $100,000 (for single filers) and $200,000 (for joint filers).
The break on car loans is valid for tax years 2025 through 2028.
We rate this a Promise Kept.
Our Sources
Tax Foundation, "One Big Beautiful Bill Act Tax Policies: Details and Analysis," July 4, 2025
Email interview with Kyle Pomerleau, senior fellow at the American Enterprise Institute, July 9, 2025