NIADA pushes for tax provision clarification to include used vehicles in interest deductions.
NIADA Calls for Clarification in Senate Tax Bill
Used Car Loan Deduction. The National Independent Automobile Dealers Association (NIADA) will formally request that Senate Finance Committee leaders clarify language in the proposed auto loan interest deduction, ensuring it applies to used vehicles, not just new ones.
Backing a Key Provision in H.R. 1
In a recent update as of June 18, 2025. The Senate Finance Committee’s draft version rolls back the interest deduction for used vehicles, applying it only to new cars whose first use begins with the taxpayer. This deviates from the House version of H.R. 1, which allows the deduction for both new and used U.S.-assembled vehicles.
Current Landscape
House version: Deduction of up to $10,000 interest on auto loans (2025–2028) for U.S.-assembled vehicles—applies to used cars too
Senate draft: Limits the deduction to new vehicles only, excluding used ones
So while NIADA continues to back the broader House version, the Senate draft narrows the scope, which may impact used-car buyers unless language is clarified before the final bill.
Used Cars Must Be Included Explicitly
In a letter to the Senate Finance Chairman, NIADA emphasized that while the intent seems to include both new and used cars, the current text is silent on used vehicles. This lack of clarity could unintentionally block access to tax relief for many car buyers.
Used Cars Drive Economic Impact
Demand for used vehicles continues to rise due to lingering supply chain disruptions and the high cost of new cars. For many working families, a used vehicle is essential, providing reliable transportation to work, school, and other vital responsibilities.
A Small Deduction, A Big Difference
Clarifying the deduction could help lower-income Americans offset their costs and redirect savings back into the economy. NIADA argues that this supports the broader goals of H.R. 1: stimulating growth and supporting working families.
Used Car Loan Deduction. NIADA Offers Support on Legislative Language
NIADA stands ready to help Senate staff refine the bill’s language to ensure it delivers meaningful relief to the used vehicle market—a sector vital to millions of Americans.