New legislation was announced today by Senator Barbara Mikulski, D-Md. This legislation is intended to stimulate the sales of new cars by allowing buyers of new cars to deduct auto loan interest and any excise or sales fees from the buyers’ income tax. This plan would cover the sales of all new trucks and cars from now until Dec. 31, 2009.

The senator claims that a family would be able to save $1,553 on a vehicle that is $25,000 under this plan. This deduction would just be for families that make less than $250,000 and individuals that make up to $125,000.

While most new-vehicle buyers would probably welcome the idea, it might not be a big enough incentive given the poor economy. Of course, when you look at all of the other fantastic incentives that have been offered lately, it may just be the best market for buyers in recent history.

Of course, many people will choose to stay home and hold onto their current cars and buy used car warranties instead. Unfortunately, consumers are reluctant to make any big purchases at this point.