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FOX Business’ Max Gorden joins ‘Varney & Co.’ to counter President Donald Trump’s push to build small Kei cars in America and to find out if American drivers are ready to go down size.
The Treasury Department is implementing President Donald Trump’s no-tax auto loan interest policy, a measure designed to lower costs for American families, the Treasury secretary said. Scott Bessant said Wednesday.
The policy, passed as part of Trump’s “big, beautiful bill,” allows eligible taxpayers to deduct up to $10,000 per year in interest on auto loans on new U.S.-assembled vehicles purchased between 2025 and 2028.
“The Treasury is implementing That of President Trump No tax on interest on U.S. auto loans, which would put money back in the pockets of working and middle-class families,” Bessent wrote on X.
“For new products assembled in the United States vehicles purchased In 2025-2028, eligible taxpayers can deduct up to $10,000 per year in auto loan interest, whether they itemize or take the standard deduction.
THE “BIG AND BEAUTIFUL BILL” INCLUDES A TAX DEDUCTION FOR AUTO LOAN INTEREST. ARE YOU QUALIFIED?
Treasury Secretary Scott Bessent said Wednesday he is implementing President Donald Trump’s no-tax policy on auto loan interest. (Eric Lee/Bloomberg via Getty Images / Getty Images)
Bessent said the Treasury Department and the taxman put in place clear guidelines so taxpayers “know exactly how the deduction works.”
“For millions of Americans, a car is not a luxury, it is a way to get to work, school and daycare,” Bessent said. “This deduction helps lower monthly costs and makes car ownership more affordable when families need it most.”
The tax break applies exclusively to vehicles assembled in the United States, which Bessent said is intended to support American workers.
“The tax cut also supports American workers by applying only to vehicles assembled in the United States, thereby strengthening domestic production,” he said.
DEDUCTION OF AUTO LOAN INTEREST IN THE “LARGE AND BEAUTIFUL BILL”
Tax break applies exclusively to vehicles assembled in the United States (iStock/iStock)
Signed into law on July 4, the One Big Beautiful Bill Act includes several requirements regarding the deduction of interest on auto loans. This only applies to new cars, SUVs, vans, pickup trucks and motorcycles weighing less than 14,000 pounds. Used vehicles are not eligible.
To qualify, the vehicle must be purchased for personal use – not business or commercial purposes – and its final assembly must be carried out in the United States.
Final assembly refers to a process by which a vehicle’s major components (engine, transmission, body, and chassis) are fully integrated and the vehicle is completed at a U.S.-based factory. manufacturing plantautomotive expert Lauren Fix told FOX Business.
Buyers must also be the first owner of the vehicle and the loan must be secured by a lien on it, according to Kelley Blue Book.
AMERICANS WILL GET “GIGANTIC” TAX REFUND NEXT YEAR, TREASURY SECRETARY SAYS
This policy was adopted as part of Trump’s “big, beautiful bill.” (Yuri Gripas/Abaca/Bloomberg via Getty Images / Getty Images)
The deduction decreases for higher incomes, and gradually disappears for individuals earning more than $100,000 per year and for joint filers earning more than $200,000.
The IRS has not yet released an official list of eligible vehicles and models.
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“I will make interest on auto loans fully tax deductible,” Trump said at a campaign rally in North Carolina in October 2024, according to Reuters.
“I will only do it if they build this particular product, which is an automobile, in the United States.”
The Treasury Department and the IRS did not immediately respond to FOX Business’ request for comment.
