Working Families Tax Cuts Deliver $10,000 Auto Loan Relief for American-Built Cars

Washington’s spending binge drove up interest rates and made big purchases more expensive for working families. Even as inflation begins to cool, the cost of financing a car remains higher than it should be.

The “Working Families Tax Cuts” respond with targeted relief. One key provision allows up to a $10,000 tax deduction for auto loan interest on vehicles assembled in the United States, even if you've already taken the standard deduction.

This is practical tax relief aimed squarely at middle-class households.

Inflation Is Cooling. Car Prices Are Stabilizing.

A recent CNBC report by Jeff Cox notes that consumer prices rose 2.4% year over year in January, lower than expected and the lowest annual rate since May 2025.

For families looking ahead to Presidents’ Day car sales, there is additional good news:

• New car prices are up just 0.4% year over year, well below overall inflation and income growth.

• Used car prices are down 2.0% year over year.

  
  

Vehicle pricing pressures are easing. The “Working Families Tax Cuts” are helping make car purchases even more affordable.

A $10,000 Deduction Focused on the Middle Class

The auto loan interest deduction is structured to benefit those who need it most.

Full relief is available to individuals earning under $100,000 and married couples earning under $200,000. The benefit phases out above those levels.

This is not a high-income tax shelter. It is direct relief for workers who rely on their vehicles to commute, run small businesses, and manage family responsibilities.

Built in America Means Eligible

The deduction applies only to vehicles assembled in the United States.

Vehicles built in China or Mexico do not qualify. The policy ties tax relief to domestic production and American jobs.

Families receive a tax benefit while supporting U.S. manufacturing.

Simple and Accessible

Taxpayers can claim the deduction even if they take the standard deduction. There is no need to itemize.

There is no complex planning required. The deduction reduces taxable income directly and lowers the real cost of an auto loan.

CFE Takeaway

Years of excessive federal spending contributed to higher interest rates and tighter household budgets. Although inflation is moderating, borrowing costs remain elevated.

The “Working Families Tax Cuts” provide targeted relief where it matters. A $10,000 deduction for auto loan interest on American-built vehicles strengthens middle-class budgets and supports domestic industry at the same time.

Tax policy should reduce pressure on working households and reward American production. This provision moves in that direction.