Senate GOP ‘big beautiful’ bill gives tax break on car loan interest
So, if I read it right, we would be able to effectively cut 20-30-40% (depending on your tax bracket) of post-tax payment money if new car leases would be structured with a tilt towards finance charge. e.g. inflated residual, inflated MFs.
10k/year of interest assuming 1-2 vehicles per household seems very hackable territory.
Can someone chatgpt ai summary this for me
One doesn’t pay interest on a lease
Fuckers:
Section 70203 of the bill creates a temporary (2025-2028) above-the-line deduction—up to $10,000 per year—for interest on a first-lien loan used to purchase a new passenger vehicle. But the definition of “qualified passenger vehicle loan interest” explicitly excludes “any lease financing,” along with other non-personal-use financing arrangements .
How many people itemize enough to get over the standard deduction?
Nevermind. “This thread has run its course.”
I’ve always assumed this was the lifestyle of the average LH…
I broke even last year but itemized to save ~$200. Yes, my accountant hates me secretly.
If such deduction covered leases - I would probably continue to itemize this year (assuming the rest remains equal).
Well then you need a bigger house/mortgage, those are rookie numbers.
Agreed. House up for sure, and 2nd house, investment prop as well.
Given the benefit has income limits, and higher earners tend to itemize more than lower earners, this seems like it will have a small target demographic. Even for those few who will qualify, the net return will probably be no more than $1000 saved. This is basically a PR stunt IMO.
Absolutely a PR stunt but that is probably why it went into the bill. They can say they are helping to make cars more affordable while the CBO probably scores this as costing almost nothing. Somewhat ironic, really the only significant group of people who could benefit from this are people living in high tax areas. I.e. a family with gross income of $200k but who pays more than $30 in mortgage interest, state/local income tax and property tax. So really New Jersey and California.
One more thing to itemize for me
(Nvm. American assembled and income limited)
The deduction is above the line, so no need to itemize to claim it.
This deduction is above-the-line, standard vs itemized deduction is irrelevant
The income limit/phaseout for this is ridiculous. Nobody is paying $10k a year in interest on a car loan, and certainly not anyone earning below those limits/phaseouts.
Agree with the above - total PR stunt and a lame one at that.
Can’t wait to see this abused for full port markup on interest rate for a deeper cut on price for loans with pre-payment penalties. You know what… family of 4 financing their first 40-50k minivan on a tight budget. I hope they milk every ounce.
The unintended consequences will be wild.
Did anyone ever think 25% APR on a 72 month loan would lead to a good deal? Now it will, or so these peeps will be told.
Meanwhile, for the bank and the dealer, an F40 on the yacht deck for everyone.
This will be rocket fuel for Kia and Nissan. They both have final assembly points in the USA for many cars as well as the lowest credit quality customer on average. F&I office can’t wait to tell them how their double digit rate isn’t such a bad thing after all. Roll in all those protection products too. Yee Haw! 
Some fund manager drunk off his ass in the Hampton’s this weekend, who is full port short Nissan just read this.
