If you're one of the millions of Americans who purchased a new car last year, you could benefit from a new tax break that allows taxpayers to deduct interest paid on their auto loans.  The  car loan tax deduction  was included in the Republicans' "big, beautiful bill" act,  signed into law by President Trump last summer. Mr. Trump first floated the initiative on the campaign trail in 2024 as a way to help make car ownership "dramatically more affordable" and to boost domestic auto production.