Up to 10k interest deduction on personal auto loans in tax code.

[AlphaSnowbordergirl]

The under $100k households only account for 37% of new vehicle purchases and 15% of the $50k+ vehicle market (all Rivians)

The Income Reality of the $50k+ Buyer
Based on early 2026 registration and credit data from Cox Automotive and J.D. Power, here is how the $50k segment breaks down by income:

• Under $100k Income: Account for less than 15% of buyers in the $50k+ category.
• $100k – $200k Income: Account for roughly 35% of this segment.
• $200k+ Income: Account for over 50% of buyers for vehicles priced $50,000 and above.

Household usually means 2 salary households so the $200k couples cap. And usually when they say buyers, they are accounting for household, not necessarily individual salary (example, the Rivian survey I just took and they ask for my household salary not individual salary). That's a decent chunk of $50k+ buyers. The singles with an AGI less than 100k who can still buy it or couples less than 200k which is still a huge amount. Add in when they say 100k income that usually isn't the AGI. Someone making 120k can bring their AGI to 90k if they deduct medical, 401k any other deductible. So all 15% is accounted for under any scenario and lets assume 60 percent off the 100k-200k income earners are couples and the rest are single, that's another 21% of the market. That's 36% or one of ever 3 households who would qualify for a 50k+ vehicle purchase. 1 out of 3 isn't a negligible difference. And again doesn't account for people who make more than those numbers but have deductibles that make them eligible.

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[the.phd]

It is for poor people...

I've always said I was a poor amongst the Rivian people. Thanks for confirming!

 

[TexasBob]

Household usually means 2 salary households so the $200k couples cap. And usually when they say buyers, they are accounting for household, not necessarily individual salary (example, the Rivian survey I just took and they ask for my household salary not individual salary). That's a decent chunk of $50k+ buyers. The singles with an AGI less than 100k who can still buy it or couples less than 200k which is still a huge amount. Add in when they say 100k income that usually isn't the AGI. Someone making 120k can bring their AGI to 90k if they deduct medical, 401k any other deductible. So all 15% is accounted for under any scenario and lets assume 60 percent off the 100k-200k income earners are couples and the rest are single, that's another 21% of the market. That's 36% or one of ever 3 households who would qualify for a 50k+ vehicle purchase. 1 out of 3 isn't a negligible difference. And again doesn't account for people who make more than those numbers but have deductibles that make them eligible.

Exactly, that was my point entirely. It is actually a tax break for the top 20% (145 HH income) and significantly the top 10% (250 HH) with a significant chunk of Asset-rich, modest income older folks serving as the anchor. That is who buys new vehicles in the US for the most part.

 

[AlphaSnowbordergirl]

I've always said I was a poor amongst the Rivian people. Thanks for confirming!

Same.

Exactly, that was my point entirely. It is actually a tax break for the top 20% (145 HH income) and significantly the top 10% (250 HH) with a significant chunk of Asset-rich, modest income older folks serving as the anchor. That is who buys new vehicles in the US for the most part.

That wasn't the point... I'm saying for 50k+ vehicle buyers 1 out of 3 will enjoy the tax break.

 

[Gen(R3)Xer]

The under $100k households only account for 37% of new vehicle purchases and 15% of the $50k+ vehicle market (all Rivians)

The Income Reality of the $50k+ Buyer
Based on early 2026 registration and credit data from Cox Automotive and J.D. Power, here is how the $50k segment breaks down by income:

• Under $100k Income: Account for less than 15% of buyers in the $50k+ category.
• $100k – $200k Income: Account for roughly 35% of this segment.
• $200k+ Income: Account for over 50% of buyers for vehicles priced $50,000 and above.

But the income cap is $200,000 combined. Wouldn’t that be 50% of $50K vehicle buyers?

 

[Gen(R3)Xer]

Single filers in their 20s and 30s can use it. Will happily use it next year with my R2 interest. Thankfully, AGI is used and not your atual wage. Needed something to replace the student interest deductible for next year.

Is this like the original EV tax credit, where if you don’t owe taxes it’s not really going to get you anything? It wasn’t until the EV Tax Credit became an on-the-hood (at the time of purchase) discount that it actually made a difference to the vast majority of people. We need that back.

 

[tivoboy]

Is this like the original EV tax credit, where if you don’t owe taxes it’s not really going to get you anything? It wasn’t until the EV Tax Credit became an on-the-hood (at the time of purchase) discount that it actually made a difference to the vast majority of people. We need that back.

These tax deductions (they are deductions not credits, some above the line some as itemized deductions) only work as such if one has the actual income (or in this case financing PAID) to be eligible for them. The EV tax “credits” were just that, and yes one had to have enough INCOME TAX, not just PAYROLL TAXES to qualify for up to $7500 in credit, dollar for dollar. The EV tax credit was never a REFUNDABLE tax credit meaning you could it all even if you didn’t have enough INCOME TAX paid to offset it, And when the IRA made the $7500 AVAILABLE as a discount at point and time of sale, it still only applied if one had the available INCOME TAXES paid to offset it. If one wasn’t actually eligible or didn’t have enough INCOME TAXES OWED, you OWED The credit or some portion of it back to the IRS.

The oddball exception to this for the previous EV tax credit was the eligibility for basically anyone to access the EV tax credit of $7500, IF the “purchase” was done with the manufacturer as a LEASE. At that point the OEM go the tax credit in full, and was able to reduce the capitalized cost of the vehicle by some amount (never really the full $7500 on paper) and then make a reduction In the LEASE PAYMENT available to the lessor, pretty much even if they made 50K or 500K. it was stupid, but made I guess accounting sense and was a bone thrown to all OEM with EV products to move.

 

[Gen(R3)Xer]

These tax deductions (they are deductions not credits, some above the line some as itemized deductions) only work as such if one has the actual income (or in this case financing PAID) to be eligible for them. The EV tax “credits” were just that, and yes one had to have enough INCOME TAX, not just PAYROLL TAXES to qualify for up to $7500 in credit, dollar for dollar. The EV tax credit was never a REFUNDABLE tax credit meaning you could it all even if you didn’t have enough INCOME TAX paid to offset it, And when the IRA made the $7500 AVAILABLE as a discount at point and time of sale, it still only applied if one had the available INCOME TAXES paid to offset it. If one wasn’t actually eligible or didn’t have enough INCOME TAXES OWED, you OWED The credit or some portion of it back to the IRS.

The oddball exception to this for the previous EV tax credit was the eligibility for basically anyone to access the EV tax credit of $7500, IF the “purchase” was done with the manufacturer as a LEASE. At that point the OEM go the tax credit in full, and was able to reduce the capitalized cost of the vehicle by some amount (never really the full $7500 on paper) and then make a reduction In the LEASE PAYMENT available to the lessor, pretty much even if they made 50K or 500K. it was stupid, but made I guess accounting sense and was a bone thrown to all OEM with EV products to move.

Ah, I see. I knew about the lease loophole allowing non-US-made EVs to get the discount and OEMs in general getting the credit and applying it to leases, but I didn’t realize if you buy it yourself you’d still have to pay back some of it to the IRS on your taxes if you didn’t owe anything.

At this point we just need reasonably priced EVs, but with the average ICE vehicle selling for around $50K, I’m not sure if anything is reasonable anymore.

Nissan is trying with the new Leaf, GM is back with the new Bolt for a limited time, and even Toyota/Subaru have created some interesting alternatives with the CH-R and Uncharted (all between $30K and $40K), but is it enough? R3 should start at $35K.

 

[sparked]

Ah, I see. I knew about the lease loophole allowing non-US-made EVs to get the discount and OEMs in general getting the credit and applying it to leases, but I didn’t realize if you buy it yourself you’d still have to pay back some of it to the IRS on your taxes if you didn’t owe anything.

With the Biden era 2024 point of sale credit, there wasn't a minimum income or tax liability that would cause a pay back. There was an income cap if you had too much income where you would have to pay it back. That's why it was so popular because it massively increased the affordability of EVs for lower income people who didn't have the tax liability. It's the whole reason why the EV market in the USA is in shambles right now for 2026.

I think he's confusing the old $7500 credit with the one in 2024.

 

[mkg3]

I've always said I was a poor amongst the Rivian people. Thanks for confirming!

Just remember, some people, many people, spend too much money (too much percent of their net income) on their vehicles. Definitely not following the 20/4/10 rule.

Just different priorities.

 

[mkg3]

Similar to the *T investment accounts, which work best for the RICH and wealthy and want to shield more assets in their estate or next generation from taxation, this works for someone with wealth but not necessarily income and wants to finance an Expensive car (relatively speaking) and carry interest. Like many of these tax gimmicks, it won’t last long or bring overall much value to the industry or the overall tax payer group.

Hate to say it but it just sounds uninformed. The Trump Investment account for kids to get a head start with a seed fund of $1k. Total annual contribution tops out at $5K. I am starting hear that some employers are helping employees make direct contributions through payroll deduction.

If you are sour about wealthy shielding more assets, once one of the parent dies, the assets step up in cost basis and the surviving spouse get it tax free on all capital gains. And when the last parent dies, then the cost basis steps up again so that the kids get the assists tax free (except IRAs). In other words, unless you are talking about someone with net worth greater than around $30M, it's the same for EVERYONE. The state tax differs from state to state, where some do tax and some do not.

The thing is, if I was having a kid today, I think this program is fantastic. Our kids are now adults so hopefully the program continues when they have kids. What parents don't want the best for their kids....

 

[Gen(R3)Xer]

With the Biden era 2024 point of sale credit, there wasn't a minimum income or tax liability that would cause a pay back. There was an income cap if you had too much income where you would have to pay it back. That's why it was so popular because it massively increased the affordability of EVs for lower income people who didn't have the tax liability. It's the whole reason why the EV market in the USA is in shambles right now for 2026.

I think he's confusing the old $7500 credit with the one in 2024.

That’s what I thought. You just had to prove you were under the income cap. I wasn’t 100% sure because I leased my vehicle.

Hopefully we get a pro sustainable energy person in 2028 and we can return the EV tax credit to its rightful place until 2033. Meanwhile we’re falling behind China and Europe when it comes to the future of mobility. I’m very confused as to why we’re hellbent on returning manufacturing jobs to the US, but we want to ignore the direction the multibillion dollar auto industry is headed in. It makes no sense.

We invented LFP batteries, the first modern solar cells, etc. and then we let China take everything, refine it, patent it, mass produce it, and control the world’s supply. Where has the American spirit of ingenuity gone? Why don’t we compete anymore?

 

[sparked]

Hopefully we get a pro sustainable energy person in 2028 and we can return the EV tax credit to its rightful place until 2033.

We're in a reset period in 2026 so automakers just have to get their bearings this year. I wouldn't look at EV sales this year as proof of anything. Just that the market has to reset.

If gas prices hit $5 average for long enough with current events, then the incentives won't even matter. If people voted to not have the carrot, they can get the stick now.

 

[Thedude]

If gas prices hit $5 average for long enough with current events, then the incentives won't even matter. If people voted to not have the carrot, they can get the stick now.

Doesn’t matter who voted for what. Everyone is getting the stick when fuel prices are high, EV or ICE doesn’t make a difference in how everything else we buy increases in price.

 

[Hereforthesnacks]

It is for poor people...

Ummm no. Wealthy people have savvy ways to reduce income, thus opening up tax credits and reducing tax burden. If you are “wealthy” and are not doing this, you are giving away your $$$.

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