President Donald Trump announced Friday a new policy instituting auto loan interest deductions for American-made cars.
“If you buy a car in the United States that’s made in the United States, if it’s manufactured here, when you borrow money, if you borrow money, you have interest payments,” Trump said in the Oval Office.
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“We’re gonna let you deduct the interest payments for income tax reasons.”
???? POTUS: "We're going to do something that has never been done in this country before — If you buy a car in the United States that's made in the United States — we're going to let you deduct the interest payment for income tax." pic.twitter.com/BGPRWiF7S0
— Rapid Response 47 (@RapidResponse47) March 28, 2025
President Trump first proposed the deduction in October, and it has been compared to the existing interest deduction on mortgages, which allows homeowners to write off a portion of their mortgage interest payments, according to a report.
The report noted that in 2024, Americans would pay an average of $1,332 a year in interest payments after purchasing a new vehicle, and more than 100 million Americans had auto loans when 2025 began.
President Trump discussed the deduction with Senate Majority Leader John Thune (R-SD) and Speaker of the House Mike Johnson (R-LA) before the announcement and said the “simple” deduction will “more than pay for itself.”
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“The truth is that people that are middle-income that buy a car and actually have to borrow money, there gonna now get an interest deduction on their car if it’s made in the United States,” Trump said.
“If it’s made someplace else, that won’t take place.”