What the Big Beautiful Bill Means for Auto Dealerships and Their Owners
The recently passed One Big Beautiful Bill is already making waves across the automotive industry. If you’re an auto dealer or dealership owner, it’s important to understand how this legislation could shape your operations, strategy, and bottom line over the next several years. Here’s a breakdown of what matters most.
Auto Loan Interest Deduction
One of the headline provisions of the bill allows consumers to deduct up to $10,000 per year in interest on loans for new vehicles assembled in the U.S. between 2025 and 2028. While most consumers won’t hit the full deduction amount, this change still creates meaningful annual tax savings that could help dealerships drive more business, especially among middle-income buyers. For dealerships, this opens up a powerful marketing opportunity—financing promotions tied to tax advantages.
EV Tax Credit Rollbacks
On the other side of the ledger, the bill eliminates federal EV and used-EV tax credits starting in late 2025. For dealerships that have leaned into electric vehicle inventory, this is a significant development. The loss of EV credits may soften demand and require new pricing strategies or inventory adjustments. It’s a wake-up call to reevaluate your EV sales strategy in light of shifting federal incentives.
Expanded Business Tax Relief
From an ownership perspective, there’s good news on the business side. The bill restores 100% bonus depreciation and increases the Section 179 expense cap to $2.5 million. That creates real opportunities to invest in technology, facility improvements, and other big-ticket items—while maintaining favorable tax treatment. In addition, changes around the calculation of the interest limitation provide added flexibility, allowing for a greater interest deduction that benefits overall dealership profitability.
Regulatory Rollbacks
The legislation also removes CAFE (Corporate Average Fuel Economy) penalties, easing regulatory pressure on dealerships that manage diverse inventories or don’t meet EV sales targets. This change reduces costs and simplifies compliance, particularly for smaller or rural dealerships.
What to Watch
Moving forward, dealerships should double down on domestic inventory and fine-tune their messaging around financing for new U.S.-assembled models. If you’re heavily invested in EV sales, it’s time to adjust your strategy—these changes could shift the market faster than expected. And for dealership owners, the expanded business tax benefits offer an opportunity to modernize operations and invest in long-term growth.
What It Means for Dealerships and Owners
| Impact Area | Opportunity | Challenge |
| Finance Departments | Highlight tax savings on qualifying vehicles to attract middle-income buyers. | Lower-income and used-car buyers derive no benefit. |
| Inventory Strategy | Emphasize and stock U.S.-assembled models; foreign brands with U.S. plants could benefit. | Imported vehicles hit by tariffs won’t qualify for the new deduction — and lose EV credit incentives. |
| EV Specialists | Some U.S.-assembled EVs (e.g. Tesla) may still qualify for interest deduction. | Loss of EV tax credits likely reduces EV demand overall. |
| Dealership Ownership | Business tax relief from depreciation and Section 179 enhancements. | Managing transition to new mix of products and financing options may require operational adjustments. |
Like any sweeping legislation, the Big Beautiful Bill presents both opportunities and challenges. The winners will be those who act quickly, understand the nuances, and realign their operations with the new landscape. For more information or to discuss your specific situation, please contact Justin Burchill – Shareholder and Dealerships Practice Segment Lead at justin.burchill@bradymartz.com.
