The new One Big Beautiful Budget Bill Act (H.R. 1) includes a much-hyped tax deduction: up to $10,000 per year for auto loan interest. But for most Americans, the reality falls short. According to the auto refinancing platform Caribou, only 3% of drivers will qualify, and even buyers of high-end cars, such as the 2025 Corvette, could miss out entirely.

Corvette Example: Big Loan, Modest Benefit

A 2025 Corvette Z06 starts at about $115,000. If you finance $100,000 of that at 7% over six years, you’ll pay around $3,700 per year in interest—far less than the $10,000 cap. That means your actual tax savings might be only $800–$1,000 annually, not the full $10,000.

And even that is only if you meet the qualifications.

Why Many Americans Won’t Qualify

To use the deduction, you must meet several requirements:

The car must be new (purchased after Jan 1, 2025)

Assembled in the U.S. (VIN starts with 1, 4, or 5)

For personal use

Income under $100,000 (single) or $200,000 (joint)

Phases out above that and disappears at $149K/$249K

That income cap is a key barrier. Earning $100,000/year isn’t rare—it’s common in major cities for teachers or professors, healthcare workers, engineers, union tradespeople, and tech professionals. But under this tax rule, many of those everyday earners are disqualified, even when buying American-made vehicles like a Corvette.

Refinancing Still Offers Bigger, Easier Savings

Caribou says refinancing is a better option for most borrowers. Its customers lower their monthly payments by an average of $141, or $1,692 annually, five times more than the average benefit of the new deduction.

Refinancing:

Works for used or older vehicles

Doesn’t depend on where the car was made

Has no income restrictions

Offers real monthly savings

“Refinancing is something millions can do right now,” said Simon Goodall, CEO of Caribou. “Meanwhile, the new tax law mostly helps a small, very specific group of drivers—and not the ones you might expect.”

Bottom Line

It looks good on paper and sounds good on TV, but the $10,000 auto loan deduction is more political messaging than financial relief. The standards aren’t “accidentally” unrealistic—they’re carefully crafted to sound big but cost little.