Trump Refloats Auto Loan Interest Deduction for US Vehicles

Mar. 28, 2025 | |

In the Oval Office press conference in which President Donald Trump announced hefty new tariffs on imported vehicles and auto parts, Trump resurrected an idea he last proposed on the campaign trail: Allow Americans who take out loans for U.S.-built vehicles to deduct any interest paid from their taxable income.

“So if the car is made in America, you get a loan, you can deduct the interest. That’s a big saving,” Trump said Wednesday.

Trump indicated Speaker of the House Mike Johnson (R-La.) is crafting the deduction. Auto loan interest relief is one of a number of topics lawmakers will address as the president’s agenda makes its way through Congress, chief among them an extension of reduced income tax rates passed as part of the first Trump administration’s Tax Cuts and Jobs Act, which took effect in 2018.