New Auto Loan Interest Deduction & Changes to Federal EV Tax Credits

At Wheelers Family Auto Group, we’re committed to keeping you informed about the latest changes in vehicle incentives that could affect your next car purchase. Effective July 4, 2025, the Office of the Bipartisan Budget and Appropriations Act (OBBBA) is rolling out important updates to federal vehicle incentives — including the sunsetting of some electric vehicle (EV) tax credits and the introduction of a new auto loan interest deduction.

What’s Changing with Federal EV Tax Credits?

Under the Inflation Reduction Act (IRA), several EV tax credits that have been popular among buyers will no longer be available after September 30, 2025:

• New EVs: The 30D tax credit will expire and no longer be available.
• Used EVs: The 25E tax credit will expire and no longer be available.
• Commercial / Leased EVs: The 45W commercial clean vehicle credit will end.

This means if you’ve been eyeing a new or used EV or planning to lease one commercially, now is the time to act before these incentives sunset.

Introducing the New Auto Loan Interest Deduction

In exciting news, starting January 1, 2025, qualifying taxpayers can deduct up to $10,000 annually in interest on auto loans for eligible new personal-use vehicles that have their final assembly in the U.S. This deduction applies to both electric vehicles (EVs) and internal combustion engine (ICE) vehicles purchased through December 31, 2028.

How to identify eligible vehicles? Look at the VIN number — if it starts with 1, 4, or 5, it indicates the vehicle’s final assembly was in the United States, making it potentially eligible for this deduction.

What This Means for Wheelers Customers

• Act Quickly on EV Purchases: If you want to take advantage of the current EV tax credits, be sure to purchase before September 30, 2025.
• Explore New Savings: The auto loan interest deduction offers a fresh way to save on your vehicle purchase, especially if you qualify based on income and other tax criteria.
• Stay Informed: Our team at Wheelers is ready to help you understand these changes. We can assist in identifying eligible vehicles by VIN and guide you on next steps.
• Consult a Tax Professional: While we can help with general info, tax situations are unique — always check with your tax advisor for personalized advice.

Where to Learn More

For the most current details on EV tax credit changes and the new loan interest deduction, visit the IRS website at IRS.gov. You can also explore the GM Financial Calculator for tailored financial insights.

Have questions? Check out the FAQs we’ve compiled or reach out to our friendly Wheelers team — we’re here to help.

Don’t miss out on the latest incentives — stop by Wheelers Family Auto Group today and drive home your perfect vehicle with confidence!