First We Abolish Itemized Deductions For Most People. Then . . .

[BobKamman]

"President Donald Trump on Wednesday said he would push for a taxpayer deduction on interest payments for cars made in the United States. The tax change is expected to be part of discussions over the GOP tax bill, which lawmakers in the House and Senate are trying to hammer out in the coming months. The comments came as the president announced a new 25 percent tariff on all car imports to the United States."

Well, it's the thought that counts, but how much of a difference will a couple thousand dollars of interest make for someone who needs another $5,000 to get above the standard deduction?

Not to mention, how many parts are imported for most cars made in the US?  What we're likely to see (in the unlikely event that Congress goes along with this) is a lot of people waiting until 2029 to buy a new car.  

[IRonMaN]

The interest on a car will be more than a couple thousand dollars.  With the tariffs on parts, those car loans are going to be the equivalent of a home mortgage

[BobKamman]

Edmunds.com listed the average car loan interest rate for February 2025 as 7.2% APR for new car loans.  If you finance $30,000 you'll pay about $2,000 in the first year (as the balance goes down faster than a mortgage).  There are lots of cars selling for less than that, although there are more selling at a higher price.  And even if you pay $60,000 the interest by the second or third year won't be more than a couple thousand.

[IRonMaN]

I hear you can pick up a Tesla pretty cheap these days 😶