Suze Orman: Why Tax Changes Shouldn’t Drive You To Buy a New Car

Core Insights - The One Big Beautiful Bill Act (OBBBA) introduces new tax benefits for car buyers, including a temporary tax deduction on car loan interest, which may influence purchasing decisions [3][4] - Personal finance expert Suze Orman warns against using these tax benefits as justification for unplanned car purchases, emphasizing the importance of financial prudence [2][7] Tax Changes Summary - The OBBBA allows a temporary tax deduction of up to $10,000 on car loan interest until 2028, with income phase-out thresholds set at $100,000 for individuals and $200,000 for joint filers [3] - The act also ends the federal tax credit of $7,500 for new electric vehicle purchases and the $1,000 credit for home EV charging station installations, with expiration dates of September 30, 2025, and June 30, 2026, respectively [4] Market Implications - The average cost of a new car exceeds $49,000, and potential tariffs may further increase prices, which could lead to a rush in purchases due to perceived tax benefits [6] - Orman cautions that tax breaks should not be the primary reason for making significant investments in new cars, advocating for a more measured approach to car buying [7][8]