US Treasury Implementing Trump-Backed ‘No Tax’ on Car Loan Interest, Bessent Says

The guidance said that new vehicles eligible for the tax deduction include those with final assembly in the United States.

Secretary of the Treasury Scott Bessent gives remarks during a roundtable meeting at the U.S. Treasury Department in Washington on May 29, 2025. Anna Moneymaker/Getty Images

The Treasury Department is implementing a policy that eliminates taxes on car loan interest, a move meant to lower costs, Treasury Secretary Scott Bessent said on Jan. 7.

The policy, which the secretary called “No Tax on American Car Loan Interest,” is being implemented under the Trump administration-backed One Big Beautiful Bill Act, signed into law last summer.