97% of Drivers Won’t Qualify for That New Car Loan Tax Break. Here’s a Better Option.

You may have seen the headlines about the One Big Beautiful Budget Bill Act (H.R. 1), and its promise of a generous new auto loan tax break—up to $10,000 a year! Sounds great, right?

Not so fast.

While the headline is attention-grabbing, the fine print tells a different story. At Caribou, we’ve dug into the numbers and here’s the reality: 97% of Americans with car loans won’t qualify for this deduction. For those few who do, the average annual tax savings will be approximately $333—not $10,000—based on a typical new car loan amount of $41,720, an average interest rate of 6.73%, and a loan term of 68.63 months (Experian).

Why Do So Few Qualify?

The new tax break comes with some tight strings attached. Here’s what it takes to be eligible:

• You must have purchased your vehicle in 2025 or later
  
• It must be assembled in the U.S. (VIN starts with 1, 4, or 5)
  
• It must be for personal use only
  
• Your income must fall under strict limits:
  
  • Full benefit starts phasing out at $100K for individuals and $200K for couples
    
  • No benefit at all if you earn more than $149K ($249K for couples)
    

When you add it all up, fewer than 3% of U.S. car owners are expected to meet these criteria.¹

So what does that mean for the other 97 million Americans with auto loans?

Refinancing: Real Savings Without the Red Tape

At Caribou, we believe everyone deserves access to financial relief—not just a select few. That’s why we make auto loan refinancing easy and accessible. And the best part? You don’t need to meet a long list of eligibility rules.

Here’s how refinancing stacks up:

• Save an average of $151/month. That’s $1,812/year in savings—over 5X more than the average new tax deduction*
  
• Options that span income levels, with no phase outs based on income level
  
• No restrictions on where your vehicle was assembled
  
  

And if you’re one of the rare few who do qualify for the deduction? Good news—you can refinance and still take the tax break for even more savings.

Don’t Let the Hype Distract You From the Help You Can Get Now

Let’s be clear: we’re all for helping drivers keep more money in their pockets. But for most Americans, refinancing is a far more effective, immediate way to lower your monthly payment.

Whether your goal is to lower your monthly payment or pay less in interest over time, Caribou can help you take control of your auto loan—on your terms.

Ready to See How Much You Could Save?

It takes just a few minutes to check your refinance options with Caribou—no paperwork, no pressure, and no impact on your credit score.⁺

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¹Caribou estimates fewer than 3% of the 100 million Americans with auto loans, approximately 2.8 million Americans, will actually qualify for the new tax deduction. This calculation is based on:

• About 13 million new cars are expected to be sold for personal use in 2025 (Cox Automotive).
• Roughly 50% of new vehicles sold in the U.S. are assembled in the U.S. (The White House).
• About 57% of new cars are financed with a loan (TransUnion).
• Approximately 76.1% of U.S. consumers fall below the income thresholds for the full deduction (Statista).
• There are approximately 100 million auto loans in the US (CFPB).