Trump Unveils Plan For Tax Deduction On Car Loan Interest For US-Made Vehicles
This innovative approach aims to boost the domestic auto industry and make car ownership more affordable for middle-class families.
United States President Donald Trump unveiled a groundbreaking policy that would allow Americans to deduct interest payments on car loans for US-made vehicles from their federal taxes.
This innovative approach aims to boost the domestic auto industry and make car ownership more affordable for middle-class families. By providing this tax incentive, Trump hopes to stimulate domestic manufacturing and support the US economy.
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After conversations with Senate Majority Leader John Thune and House Speaker Mike Johnson, Trump told reporters in the Oval Office on Friday that the idea, which he noted he was “proud of", could “pay for itself" and represent a shift in how tax deductions are applied to middle-income Americans.
“This is something that has never been done before in this country," he said.
President Trump is pushing a brand new policy that’s never been done before: If you buy a car that is made in the US, you will soon be able to deduct the interest payments on the car loans from federal taxes. pic.twitter.com/k6gqfxLAJk— Charlie Kirk (@charliekirk11) March 28, 2025
Trump proposed a new tax break that would allow individuals who buy American-made cars and finance them with a loan to deduct the interest payments from their federal income taxes. The president emphasised that vehicles manufactured abroad would be excluded from the benefit.
“People who buy cars and actually have to borrow money — middle-income people — they’re going to benefit. The rich people usually get all the deductions, but this is for the everyday American."
Trump is optimistic about the future of the US auto industry, noting that domestic car manufacturers have already started expanding their plants. This development is expected to create more jobs and boost economic growth. “You’re going to see numbers the likes of which you’ve never seen before," he added, referring to the potential surge in U.S. car production and sales.
It remains unclear when or how it would be introduced in Congress.
Since Trump took office, several automakers have announced plans to manufacture in the US, largely to avoid the president’s tariffs. Notably, companies like Honda, Nissan, Hyundai, and Rolls-Royce are expected to relocate production from overseas factories to the US.
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