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USA Today
11 hours ago
- Automotive
- USA Today
Proposed new auto loan tax deduction could help buyers get break on interest
Proposed new auto loan tax deduction could help buyers get break on interest Show Caption Hide Caption How Trump's tariffs will effect everyday prices With new tariffs on imports, several everyday goods are likely to become more expensive for American consumers. Cars and auto parts, many of which are produced through an integrated North American supply chain, will see price increases as manufacturers adjust to higher costs. unbranded - Newsworthy The sweeping GOP tax bill calls for an above-the-line deduction of up to $10,000 in car loan interest during a given taxable year. You'd pay no tax on that interest, if you qualified. The proposed tax deduction aims to drive sales of U.S.-built cars and trucks, fulfilling a campaign promise made in Detroit by President Donald Trump. If taxpayers actually end up seeing a new, proposed tax break on the interest borrowers pay on car loans, at least some can claim it all started in the Motor City. President Donald Trump, who was running for his second term last year, dropped that car loan bombshell during his comments at the Detroit Economic Club on Oct. 10, 2024, less than a month before the presidential election. Trump said then that he planned to propose making interest on car loans fully deductible. Now, we're getting more of the details for what such a deduction could look like based on what was tucked into the broad tax plan released by House Republicans on May 12. The White House calls the proposed legislation "One, big, beautiful bill." If you're looking to buy one, big, beautiful SUV or truck or car, pay attention to the haggling in Washington to see whether a new deduction on car loans will become a reality. How big or beautiful that car loan deduction would be The good news: The GOP bill calls for an above-the-line deduction of up to $10,000 in car loan interest during a given taxable year. You'd pay no tax on that interest, if you qualified. Creating an above-the-line deduction means that the proposed tax break on car loan interest would not just apply to the roughly 10% of taxpayers who itemize deductions. It also would apply to the vast majority of people who do not itemize and instead claim the standard deduction. The standard deduction became far more prevalent after the major tax changes in the Tax Cuts and Jobs Act of 2017 — the Trump tax cut initiative that expires at the end of 2025. Trump is seeking to extend those tax cuts that are set to expire later this year. The so-so news: All new car and truck buyers who take out a car loan won't qualify for the deduction. Much will depend on your income — and the car or truck that you buy. Take a look under the hood of this tax break Under the plan, House Republicans are calling for making the auto loan interest deduction limited to $10,000. But the deduction would phase out by $200 for every $1,000 of modified adjusted gross income above $100,000 for single filers and $200,000 for joint filers, according to an analysis by the Tax Foundation, a nonprofit research organization. As a result, a single person with $149,001 in income or more would not receive any deduction, according to Mark Luscombe, principal analyst for Wolters Kluwer Tax & Accounting in Riverwoods, Illinois. The deduction phases out entirely, based on his calculations, for a married couple making $249,001 or more. More personal finance: Restart of student debt collections expected to trigger more student loan scams The auto loan interest deduction would be temporary under the GOP plan, and it would apply to auto loans that are taken out in 2025, 2026, 2027 and 2028. If you took out a five-year car loan in 2027, for example, you could only expect two years for a deduction on your car loan interest to apply at this point. The wording of the bill indicates that you would only get the deduction for those specified four years, Luscombe said. Again, the tax rule has yet to be approved, so don't bank on that tax deduction just yet. We're talking about a tax break for buyers of qualified passenger vehicles that are "manufactured primarily for use on public streets, roads, and highways," according to the House Ways and Means Committee section-by-section breakdown of the bill. The vehicle could be a car, minivan, van, sport utility vehicle, pickup truck or even a motorcycle. An applicable passenger vehicle for the tax break also would include all-terrain vehicles and recreational vehicles, if their final assembly took place in the United States. The tax break would apply only to auto loans that were taken out to buy cars or trucks that have their final assembly in the United States. It's debatable at this point whether the tax break would apply to both new car loans, as well as used car loans. The language in a Ways and Means Committee states: "No tax on car loan interest." It does not specify if that applies only to car loans taken out by a consumer to buy a new car. It also does not state whether a car loan for buying a used car would apply. Luscombe said it's not clear what the odds are yet for Congress to pass a car loan deduction or even a deduction with the same rules outlined in the Ways and Means bill. Bills were introduced in both the House and the Senate that focused on the auto loan interest deduction. Detroit Free Press Washington correspondent Todd Spangler reported about one bill by U.S. Rep. Bill Huizenga, which is dubbed the "Made in America Motors Act." Huizenga, R-Holland Township, introduced that legislation May 7, which would allow a deduction of up to $2,500 in a given year for interest paid on a loan to buy a motor vehicle if it was built in the United States. The differences in various bills are likely to emerge and be debated in the coming weeks. "Any provision is likely to be weighed in terms of its impact on the overall budget numbers in trying to make the overall bill meet the budget requirements," Luscombe said. Your entire car payment wouldn't be deductible A key point to understand: Your entire monthly car payment would not be fully deductible. If you're paying $834 a month for your car loan, you're not looking at a $10,000 a year deduction. Jonathan Smoke, chief economist for Cox Automotive, said consumers need to understand that car loans are amortized so that each payment covers interest and principal. You're not paying the same amount of interest each year on your car loan. More of your payment goes to cover interest, Smoke said, in the first years of the loan. Therefore, the maximum tax deduction would be in year one and then it would get smaller in future years. Let's assume an interest rate of 9.5% on a six-year car loan. On a $42,000 car loan in this example, the borrower would pay $768 a month. The first year of interest would add up to a bit more than $3,750 in this example. For someone at a tax rate of 24%, that deduction would reduce taxes by roughly $900. But it's important to note that the deduction would decline in subsequent years of that car loan. It's also key to note the dollar value of the deduction would be bigger for someone who makes more money and pays a higher tax rate. It would be smaller for someone who earns less money and pays a lower tax rate. Ivan Drury, director of insights at Edmunds, said interest over the life of a loan is often overlooked as consumers become focused on monthly payment. Interest rates have hovered around 7% for the last two years, he said, and the amount financed has been at or slightly above $40,000. As a result, consumers are paying nearly double the amount of interest that they had in previous years. "While a tax deduction won't wash away all of the increased costs associated with purchasing a new car in today's age, it will certainly dull the edge," Drury said. If the legislation is approved by Congress, consumers would need to pay attention to the interest rate they're paying, Drury said, especially since this deduction wouldn't be available across the board or even on some models where different trim levels are assembled outside of the United States. Finding and qualifying for an affordable car loan Another obvious but essential point: You'd need to qualify for a car loan to be able to take advantage of this tax break. Increasingly, experts warn more consumers are experiencing financial fragility, struggling to manage their money and their debt. Many consumers now expect that it will be far tougher to find an affordable car loan and many fear rejections in obtaining credit, according to a survey related to credit access by the Federal Reserve Bank of New York. The survey takes into account what it calls "discouraged borrowers" or those respondents who stated they did not apply for any credit in the past 12 months because they did not think they would get approved, despite reporting a need to borrow. Those discouraged borrowers reached 8.5% in the February survey, the highest level since the start of the survey in October 2013. For auto loan applications, the survey noted, the average perceived probability of a rejection reached 33.5%, the highest level since the start of the series. Cox Automotive's research indicated that consumers saw credit access dip in April, particularly for those with lower credit scores. "Lenders were more cautious about extending credit to higher-risk borrowers," according to Cox Automotive. A variety of issues could dampen someone's ability to buy a car this year or next — loss of a job, fear of losing a job, a credit score that was dinged in 2025 by nonpayment of student loans. Credit scores for student loan borrowers started getting hit again this year, as delinquencies resumed appearing on credit scores. High car prices and high interest rates on car loans are another issue that can cause someone to put off buying a car or truck. Higher tariffs on many cars will drive up prices, too. Ford Motor Co., for example, raised prices in May on the Mustang Mach-E electric SUV, Maverick pickup and Bronco Sport, which are built in Mexico. Prices increased by as much as $2,000 on some models, as first reported by Reuters. In addition, many drivers owe more than their current car is worth, given the high prices they paid during the pandemic and used car values now, cutting into the potential trade-in value. The expectation is that U.S. car and light truck sales will fall behind last year's red-hot run when it comes to sales in 2025, 2026 and 2027, according to a forecast issued in May by University of Michigan economists. Right now, U-M economists expect U.S. passenger vehicle sales to drop sharply later this year, from an annual pace of 16.4 million in the first quarter of 2025 to 14.8 million in the third quarter once the tariffs on vehicle imports drive up prices for new cars and trucks. So, a tax break on the interest you pay each year on your car loan certainly could rev up an industry facing plenty of challenges. Free Press Washington correspondent Todd Spangler contributed to this report. Contact personal finance columnist Susan Tompor: stompor@ Follow her on X @tompor.
USA Today
a day ago
- Business
- USA Today
Big Lots set to reopen more than 70 stores this week: See list
Big Lots set to reopen more than 70 stores this week: See list Show Caption Hide Caption Big Lots stores set to reopen in six states A number of Big Lots stores are set to reopen on April 10 despite the company filing for bankruptcy and closing multiple locations last year. unbranded - Newsworthy It's about to be a big week for Big Lots' comeback. Big Lots is set to open more than 70 stores across the United States on Thursday, June 5, only weeks after Big Lots opened dozens of stores on May 15. The openings come months after Big Lots announced its sale to Gordon Brothers Retail Partners. As part of the deal, Variety Wholesalers acquired 219 Big Lots stores, as well as two distribution centers. "We're thrilled to bring the Big Lots! brand back to life by offering more deals than ever, lots of famous brands and a new apparel department for the entire family," Variety Wholesalers CEO Lisa Seigies said in an April 4 news release. Which Big Lots stores are reopening? Big Lots openings on June 5 are set to take place in nine states: Florida, Georgia, Kentucky, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee and Virginia. Other retailers taking over Big Lots locations Other retailers besides Variety Wholesalers have announced the purchase of Big Lots locations. Rhode Island-based Ocean State Job Lot announced in March that it would be buying 15 Big Lots locations in New Jersey, Maryland, Delaware, Pennsylvania, New York, Massachusetts, Maine and Vermont. In February, Ollie's Bargain Outlet said it would be buying 40 former Big Lots store locations. Fernando Cervantes Jr. is a trending news reporter for USA TODAY. Reach him at and follow him on X @fern_cerv_.
USA Today
2 days ago
- Automotive
- USA Today
Should you buy that car? It makes sense to own one in these cities.
Should you buy that car? It makes sense to own one in these cities. Show Caption Hide Caption How Trump's tariffs will effect everyday prices With new tariffs on imports, several everyday goods are likely to become more expensive for American consumers. Cars and auto parts, many of which are produced through an integrated North American supply chain, will see price increases as manufacturers adjust to higher costs. unbranded - Newsworthy Own a car, or use public transit? It's a classic debate full of trade-offs. For most Americans, quicker commutes and the convenience of car ownership outweigh the pros of using public transit. But that comfort often comes at a steep price, averaging around $8,137 per year when factoring in fuel, insurance, maintenance, and parking, according to a study by Point2Homes, a resource for renters that publishes market research. For the average homeowner, that's 8% of their income, but for the average renter, it's 15%, the study found. Meanwhile, public transit costs commuters on average less than $1,000 per year — a more than $7,000 annual difference, the study's author Andra Hopulele notes. 'This financial imbalance underscores how transit affordability can play a key role in household budgeting, particularly for lower- and middle-income renters,' Hopulele told USA TODAY. 'The tradeoff is clear: significant cost savings versus modest time gains. For budget-conscious commuters, especially renters, public transit can offer meaningful financial relief.' More: Used car prices hit record highs in 2025: What buyers need to know Debating buying a car versus sticking to the bus route and metro system? Here's what to know: Where ditching the car saves the most money Commuters can save thousands by ditching cars in some of the nation's most well-known cities, according to the study. Four of the top five cities where ditching a car will save more than $7,000 are in California. They are: San Francisco, where commuters save an average of $10,188 New York, where commuters save an average of $9,538 San Diego, where commuters save an average of $8,676 Los Angeles, where commuters save an average of $8,436 Boston, where commuters save an average of $8,195 Washington, where commuters save an average of $8,078 Philadelphia, where commuters save an average of $7,983 Jacksonville, Florida, where commuters save an average of $7,662 San Jose, California, where commuters save an average of $7,488 Chicago, where commuters save an average of $7,362 Where owning a car saves the most time While saving money is always nice, for some Americans, time is money. Point2Homes calculated the average amount of time drivers save on their work commutes in each city by subtracting the average car commute times from the average public transit commute times Americans reported in the Census American Community Survey. Two California cities where opting for public transit saves consumers some of the most money also rank in the top 10 of places where owning a car saves Americans the most time on their way to and from work. They are: Las Vegas, where commuters save an average of 52.3 minutes per day and 9.1 days per year San Jose, where commuters save an average of 50.8 minutes per day and 8.9 days per year El Paso, Texas, where commuters save an average of 46.8 minutes per day and 8.2 days per year Fort Worth, Texas, where commuters save an average of 44.4 minutes per day and 7.8 days per year San Antonio, where commuters save an average of 42.3 minutes per day and 7.4 days per year Phoenix, where commuters save an average of 41.3 minutes per day and 7.2 days per year Detroit, where commuters save an average of 40.5 minutes per day and 7.1 days per year Indianapolis, where commuters save an average of 39.2 minutes per day and 6.9 days per year San Diego, where commuters save an average of 38.9 minutes per day and 6.8 days per year Columbus, Ohio, where commuters save an average of 37.3 minutes per day and 6.5 days per year Reach Rachel Barber at rbarber@ and follow her on X @rachelbarber_
USA Today
5 days ago
- USA Today
What to know about 'Devil in the Ozarks', Arkansas prison escape, as search enters 5th day
What to know about 'Devil in the Ozarks', Arkansas prison escape, as search enters 5th day Show Caption Hide Caption Ex-Arkansas police chief imprisoned for murder escapes prison Grant Hardin, a former Gateway, Arkansas, police chief serving time for murder and rape, escaped from the North Central Unit in Calico Rock on May 25. unbranded - Newsworthy The search for ex-Arkansas police chief and convicted murderer Grant Hardin, known as the "Devil in the Ozarks," entered its fifth day after he disguised himself as a corrections officer and slipped away from state prison, authorities said. Hardin, 56, escaped from the North Central Unit on May 25 while wearing a "makeshift outfit designed to mimic law enforcement," the Arkansas Department of Corrections said. He was convicted of the 2017 murder of James Appleton and the 1997 rape of a school teacher. Hardin served as police chief in Gateway, Arkansas, and had previous law enforcement experience, officials said. His case was put in the spotlight with the 2023 documentary "Devil in the Ozarks." The search for Hardin includes local, state and federal authorities, but has been hampered by weather that prevented the use of drones and helicopters, corrections department spokesperson Rand Champion said at a May 28 news conference. The prison escape comes as authorities in Louisiana are also searching for escaped inmates. Two of 10 inmates who escaped a New Orleans jail on May 16 by ripping a toilet away from a wall and climbing through a hole are still on the run. More: Arkansas mayor, murder victim's sister reacts to Grant Hardin's escape How did the Arkansas prisoner escape? Hardin escaped at about 2:55 p.m. on May 25, the Arkansas Department of Corrections said in a news release. He was wearing a makeshift outfit that looked like one worn by corrections officers, officials said. "Inmate Hardin impersonated a corrections officer in dress and manner causing the Corrections Officer operating a secure gate to open the gate and allow Inmate Hardin to walk away from the North Central Unit," Special Agent Dennis Simons of the Izard County Sheriff's Office wrote in an arrest affidavit. Like true crime? Check out Witness, a library of true crime stories Officials haven't given further details about how he obtained the clothing or made it as far as the gate. A photo from surveillance footage shows Hardin wearing the outfit and pushing a loaded cart as he escaped. Champion said Hardin was gone for about 20 minutes when an officer noticed he was missing. What were Grant Hardin's crimes? Who is James Appleton? Hardin pleaded guilty to the Feb. 23, 2017 murder of James Appleton. Appleton's brother-in-law and the mayor of Gateway at the time, Andrew Tillman, told police he was on the phone with Appleton while Appleton was driving his truck after filing a report with the sheriff's office. Appleton worked for the local water department and was reporting vandalization of a water tower. Appleton pulled over so he wouldn't lose signal while on the phone with Tillman, Tillman told investigators. Tillman heard what sounded like a car door slamming shut, then nothing. A witness also told police they saw someone pulled over behind the truck in a car and heard a gunshot, and identified the driver as Hardin. Appleton was found dead in his truck with a gunshot to the side of his head and face. Hardin was sentenced to 30 years in prison for the murder. After his conviction, his DNA was matched with that from an unsolved rape case in 1997, in which a teacher said she was attacked while at school by a man who held her at gunpoint, according to court records. Hardin pleaded guilty to the rape and was given a 25-year sentence in 2019. Hardin was the chief of police in Gateway for about four months in 2016, the Associated Press reported. He was also terminated from roles at other police departments, local outlets have reported. Where can I watch 'Devil in the Ozarks?' The documentary "Devil in the Ozarks" is about a "brazen sexual assault shocks a small town, but goes unsolved for 20 years, until a nearby murder produces a suspect with matching DNA," its IMDB page says. "Two years ago, we made a documentary about Hardin's horrific crimes with Max/Investigation Discovery," Ari Mark, co-founder of AMPLE Entertainment, an award-winning production company, said in a statement. "We've since been in touch with the subjects of that film and law enforcement and are praying for Hardin's immediate capture in the name of justice and the victims and their families' peace of mind." "Devil in the Ozarks" can be streamed on Max or Hulu, through the "Live TV" or "Max" add-ons. You can also watch it on the Investigation Discovery (ID) GO app by inputting your TV provider credentials. More on how to watch: Documentary about Grant Hardin details rape case Contributing: N'dea Yancey-Bragg, Michael Loria, James Powell, Jorge L. Ortiz and Amaris Encinas, USA TODAY
USA Today
6 days ago
- USA Today
What to know about 'Devil in the Ozarks' subject, convicted murderer who escaped prison
What to know about 'Devil in the Ozarks' subject, convicted murderer who escaped prison Show Caption Hide Caption Ex-Arkansas police chief imprisoned for murder escapes prison Grant Hardin, a former Gateway, Arkansas, police chief serving time for murder and rape, escaped from the North Central Unit in Calico Rock on May 25. unbranded - Newsworthy Convicted murderer Grant Hardin escaped from a Calico Rock, Arkansas, prison on May 25, 2025. Hardin was serving time for the 2017 murder of James Appleton and the 1997 rape of a teacher. He was a former Gateway, Arkansas, police chief. A 2023 documentary, "Devil in the Ozarks," covered Hardin's crimes. A convicted murderer who was the subject of a 2023 documentary remains at large following a May 25 prison escape. Grant Hardin, 56, escaped from the North Central Unit in Calico Rock, Arkansas, where he was serving time for the 2017 murder of James Appleton and the 1997 rape of a school teacher, according to the Arkansas Department of Corrections. He was sentenced to 80 years on the combined convictions, according to court records. Hardin, a former police chief, escaped while wearing "an ADC type uniform," according to the Stone County Sheriff's Office. "He's a sociopath," former Benton County prosecutor Nathan Smith told Arkansas ABC affiliate KHBS/KHOG May 27. "Prison's not full of people who are all bad. It's full of a lot of people who just do bad things. Grant's different." What was Grant Hardin convicted of? Hardin pleaded guilty to in 2017 to murder in the first degree for shooting and killing Appleton in February of the same year, according to court records. Appleton's brother-in-law, Andrew Tillman, told Benton County Sheriff's investigators that he was on the phone with Appleton when he was shot, according to a probable cause affidavit. Appleton had filed a police complaint shortly before the phone call and had pulled to the side of the road to complete the conversation, according to the affidavit. Appleton noted that a car had sped by his then stopped, saying, "It must think I'm a policeman or something," according to the affidavit. "Tillman said the next thing he heard on the phone was what sounded like a loud slammed door and 'that was it,'" the affidavit reads. A witness told investigators that he saw a white car parked behind Appleton's truck, heard a loud bang and saw the white car speed off. The witness then turned around to check on the truck only to discover Appleton dead, according to the affidavit. Tillman was the mayor of Gateway, Arkansas when the shooting occurred and his wife, Cheryl Tillman, currently serves as the town's mayor, according to the Northwest Arkansas Democrat Gazette. "He's just an evil man," Cheryl told the paper. "He is no good for society." USA TODAY reached out to both Andrew and Cheryl Tillman for comment but did not receive an immediate response. Hardin was sentenced to 30 years in prison for the murder, according to the plea agreement. DNA connects Grant Hardin to 1997 rape A DNA test conducted following the murder conviction connected Hardin to the 1997 rape of a school teacher in Rogers, Arkansas, according to a probable cause affidavit filed in the case. The victim told investigators that she was attacked on a Sunday morning, a time she normally worked to prepare for the week and noted that a church group was meeting in the school's cafeteria, according to an affidavit filed at the time of the attack. She was attacked at gunpoint after leaving her classroom for a restroom off of the teacher's lounge, according to the affidavit. The assailant was described as white male wearing a knit stocking cap and sunglasses, according to an application for a search warrant filed for a storage unit owned by Hardin. Hardin pleaded guilty to two counts of rape in 2019 and was sentenced to serve 25 years in prison for each count consecutively, according to the plea agreement. Grant Hardin held police jobs before arrest Hardin bounced around police departments before becoming the chief of police in Gateway, according to KHBS/KHOG and the Associated Press. He was with the Fayetteville Police Department from Aug. 6, 1990, to May 22, 1991, according to KHBS/KHOG. The department's chief of police then said he terminated Hardin because his efforts "fall short of the average probationary officer" and that he had a "tendency to not accept constructive criticism along with indecisiveness under stressful situations." A spell at the Eureka Springs Police Department, from April 1993 to October 1996, was marred by excessive uses of force and poor decisions on the job, the department's former police chief said, according to KHBS/KHOG. Hardin was the chief of police for Gateway for about four months at the start of 2016, according to the Associated Press. Grant Hardin's crimes covered in 'Devil in the Ozarks' documentary The 1997 rape was the focus of a 2023 documentary titled "Devil in the Ozarks," distributed by Investigation Discovery – according to the documentary's IMDB page. "A vicious sexual assault stuns a small town but goes unsolved for two decades, until a murder nearby reveals a suspect with matching DNA," the documentary's tagline reads.
