Treasury Secretary Scott Bessent Touts Trump's $10K Tax Deduction On Auto Loans For 2025-2028 US-Made Vehicles: 'Putting Money Back In...'

Treasury Secretary Scott Bessent has hailed President Donald Trump's decision to enable a deduction of up to $10,000 on auto loan interest, unveiled as part of the latter's Big Beautiful Bill last year.

‘Putting Money Back In Pockets,' Says Scott Bessent

In a post on the social media platform X on Wednesday, Bessent shared that the Treasury was implementing Trump's "No Tax on American Car Loan Interest.” He called this a move that would enable "putting money back in the pockets of working and middle-class families."

Bessent shared that eligible taxpayers who own vehicles made in the U.S. between 2025 and 2028 would be able to deduct up to $10,000 per year in auto loan interest. He added that the Treasury and the Internal Revenue Service (IRS) were issuing rules to help owners understand the deductions.

"This deduction helps lower monthly costs and makes car ownership more affordable," Bessent said, reiterating that the deduction only applies to vehicles assembled in the U.S.

Trump's Tax Bill

The post comes as Trump had touted his tax bill, enabling affordability for consumers. "We’re giving them a deduction on the interest if they buy a nice Tesla car," but then added that the deduction wasn't limited to Tesla Inc. (NASDAQ:TSLA) and could be enjoyed on other manufacturers' vehicles as well.

The deductions are valid for singles with income up to $100,000 annually and $200,000 annually for couples. Should the income exceed $100,000, the amount that can be deducted decreases by $200 for every $1,000 above the limit.

Trump Admin's Affordability Push

The administration has touted affordability in the auto industry, with Trump signing an order to roll back Corporate Average Fuel Economy (CAFE) standards, hailing it as a move that would increase the affordability of vehicles for the average consumer.

Trump's move was hailed by Transportation Secretary Sean Duffy, who said that the decision would help offset the backdoor EV mandate put in place by the previous administration, led by President Joe Biden and former Transportation Secretary Pete Buttigieg. 

Car Payments Soar

Meanwhile, car payments in the U.S. have hit record highs as new research data suggests nearly 20% of new-car owners opt for monthly car payments exceeding $1,000, stretching the payments over 84-month-long periods.

This comes as the average car transaction price in the U.S. hovers around the $49k-$50k mark. Seeing this, Sen. Ted Cruz (R-TX) has challenged the need for vehicle safety features like automatic emergency braking and rear seat occupant alerts, which the lawmaker suggests drive up costs.

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