First off is a little summary that I copied off the interweb....

"Starting January 1, 2025, taxpayers can deduct interest on certain qualified auto loans—but only if the vehicle and loan meet specific federal criteria.
Here’s what qualifies:
Up to $10,000 per year of interest on a qualifying auto loan can be deducted from your federal income.
Vehicle must be assembled in the United States; final assembly must occur within the U.S.
Only new vehicles—used vehicles do not qualify.
The loan must be secured by a first lien on the vehicle (i.e., the lender has the primary claim if you default).
The vehicle must be for personal use only; commercial use or fleet vehicles are excluded.
A valid Vehicle Identification Number (VIN) must be reported on your tax return.
This is an above-the-line deduction, meaning you don’t need to itemize to claim it—an important feature for the many taxpayers who now take the standard deduction."

If the tax rate on my Fed taxable income is 20% and the loan interest is 8%... Does that mean I come out 12% ahead on the interest paid?
There has to be something I'm missing here....

If what you are saying is true - then NO your percentages are not correct - has nothing to do with your taxed rate. You are still taxed at 20% but would have a deduction of 8% of your cost of vehicle. So, if you bought a 100k vehicle roughly assuming interest would not be compounded (which it is) you would have a 8k dollar deduction. If your income is 100k you would be reduced down to 92 and still taxed at 20%. You would have to look at income, vehicle costs, interests paid for year, what bracket you fall into at end of year etc

course your sales tax and property tax probably equate to about 8% also.....

for a business or farm with section 179 - deduction much greater - unless they eliminated those

Just think of it as your 8% interest rate costs you 6.4%. That's 20% off the 8% rate. You will pay 8% on the note, but then the rebate will refund 20% of that.

The way I read it is the total interest paid in the year is an added deduction just like the Standard deduction. So if the annual interest added up to $2000 that would be 2000$ less I would pay Fed taxes on...

right. paying 2,000 in qualifying interest lets you claim a 2,000 deduction. It would reduce your reported income by 2,000, and since your federal rate is 20%, you'd get 20% of that interest paid back.
So in effect, you only pay 80% of the interest rate. So if the rate is 8%, 80% of of 8% is 6.4%.

So think of it as you pay 6.4% but the gov. holds an extra 1.6% until you get your refund.

If your tax rate is 20 percent you'd save 400 dollars to pay 2000 in interest

It's silly to let people to write off interest on a car loan for non business use

Yep got it!!! Pitch that idea...

Up to 10k a year in interest?

Rewarding stupidity and punishing those who pay cash.

That would get you a mighty fancy car or you are dealing with a mighty shady banker..

Honestly - I think it will stimulate the economy greatly. It is a 3 year deduction for Personal Use. I have never once seen this in my life. I can go buy my wife a new Toyota Camry (made in the USA) and for 3 years have a deductible expense as I will write all the interest off. With lower prices and possible rebates - might be time to buy before the end of year and get a 3 year note. What other time have you been able to right off interest on a vehicle for personal use? Always better to pay cash up front but can see no negatives if a 3 year loan can be acquired for this - makes me wonder if banks are on board yet as they have to report to the IRS as well with it.

For farm use or commercial use - can you write off the interest on a loan or only the cost? My farm vehicles were all used when I bought them with cash. Never paid interest on any farm loans yet other than land.

TBD if you can pay cash it's a loss to take out a note and pay interest even if you can deduct it

Bingo....never ceases to amaze me the number of folks that get all lathered up over these type of offerings. Lets pay 10k in interest just so we can save 2k on taxes at the end of the year

Straight line deductions are not deductions at the taxable rate.

There are times in life to use someone elses money. If my money is making over the interest rate charged by a financial institution, and I can use their money, then deduct the interest, I am better off to invest mine, use theirs and proceed on.

As well, more of my income invested and more deductions - lowers my taxable income. Same reason corporations spend lots, make lots, and show no earnings....

Yep, worked out well for a lot of people when life happens and jobs are lost unexpectedly and payments cant be made...whole lotta people mortgaged up to their eyeball trying to 'use' someone elses money when covid hit....lost everything.

That is what I was thinking. Maybe a bit harder now with rates higher, but when we had those near zero rates for so long.... if your money can be making more money in a relatively safe investment, why wouldn't you want to do that?

Steven's usually pretty smart with financial stuff so I thought maybe I was missing something....

To be clear... I'm talking about if you can reasonably expect to make more money by investing the cash you would have spent on the car, than what you would be paying in interest.

Only way to make out on the deal is if you are your own bank and an expert in finance.