Creates a new federal tax deduction that lets individuals deduct interest paid on certain auto loans (called “qualified motor vehicle interest”), subject to a cap and rules about which vehicles and loans qualify. The change is limited by definitions of eligible vehicles and loans, prevents overlapping benefits with other tax rules, and applies to tax years beginning after December 31, 2025.

The deduction reduces taxable income (not a tax credit) for qualifying taxpayers who finance eligible vehicles. Exact eligibility, the dollar cap, and interaction with other tax provisions are defined in the text and will affect who benefits and how much federal revenue is reduced.