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Transitional Relief for Car Loan Interest Reporting: What Businesses Need to Know
Businesses that finance vehicle purchases must comply with new reporting under OBBB—but IRS Notice 2025-57 provides special relief for 2025. Here’s how lenders and interest recipients can stay compliant without penalties.
By NomadicTax Research Team • 5-8 min read • November 14, 2025
## Overview of the New Requirement
Under the One, Big, Beautiful Bill, businesses that receive **$600 or more in interest** from a person on a “qualified passenger vehicle loan”—like for cars, SUVs, motorcycles with gross vehicle weight under 14,000 pounds and final assembly in the U.S.—must:
- File information returns with the IRS; and
- Provide statements to borrowers showing interest received and related loan info. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-provide-transition-relief-for-2025-for-businesses-reporting-car-loan-interest-under-the-one-big-beautiful-bill?utm_source=openai))
## What Notice 2025-57 Provides
To ease the transition for 2025, the IRS is granting **transitional relief**. Lenders and interest recipients **won't face penalties** if they provide the required statements or make interest totals available via these methods: online portal, monthly or annual statements, or similar alternatives. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-provide-transition-relief-for-2025-for-businesses-reporting-car-loan-interest-under-the-one-big-beautiful-bill?utm_source=openai))
## Who Is Affected
- Car dealerships and finance companies providing loans for personal use vehicles.
- Individuals who finance vehicles through loans rather than leasing or paying cash.
- Businesses utilizing vehicle loan interest in their books or as a pass-through.
## Actionable Steps
- **Review whether your vehicle loans qualify**: Was the vehicle assembled in the U.S.? Was loan origination after December 31, 2024? Is the vehicle for personal, not business, use? ([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai))
- **Put reporting methods in place**: Setup borrower statements or online portals; adjust accounting systems to track total interest per borrower.
- **Communicate with borrowers** so they can anticipate receiving statements or find their information online.
## Practical Example
A U.S. auto dealer finances 1,000 vehicle loans in 2025. Of these, 800 are qualified personal vehicle loans. The business must ensure each borrower receives a statement showing how much interest they paid during the year—even if payments were made monthly or through online portals. If the statements are given through alternatives IRS permits, no penalties will be imposed (for 2025). Existing systems may need tweaks to capture aggregate interest data.
## Long-Term Considerations
- For future years, ensure full compliance: filing returns *and* furnishing borrower statements will both be required.
- Systems must record the gross vehicle weight rating, date of final assembly, and the $600 interest threshold per borrower.
- Businesses should train staff or update software now to handle these new tasks.
**Bottom line**: Notice 2025-57 under OBBB gives businesses a grace period for 2025. Use it to build compliance into your systems and avoid future penalties.