Understanding EV Tax Credit Changes and New Auto Loan Incentives: What Guaranty Chevrolet Customers Need to Know
Act now to get $7,500 tax credit on most Chevy EVs. Don't wait, the Federal EV tax credit ends September 30th!
Navigating Incentive Shifts Under the One Big Beautiful Bill Act (OBBBA)
The landscape of vehicle purchasing incentives is evolving. Effective July 4, 2025, the newly introduced One Big Beautiful Bill Act (OBBBA) brings major updates that may impact how customers finance their next electric or internal combustion engine (ICE) vehicle. At Guaranty Chevrolet, we believe in keeping our customers informed; not only to help you make the best financial decisions, but to ensure transparency as we adapt alongside changing legislation.
This latest legislation sunsets a number of existing federal EV tax credits while introducing a compelling new incentive: a substantial auto loan interest tax deduction for eligible vehicle purchases. Let's break down what's changing, what remains, and what these updates mean for drivers looking to purchase or lease a vehicle in the months ahead.
Goodbye to Current EV Tax Credits: A New Date to Remember
The OBBBA calls for the formal end of several federal electric vehicle (EV) tax incentives originally made available under the Inflation Reduction Act (IRA). These changes will be phased in by September 30, 2025 - giving current and prospective EV owners a critical deadline.
Specifically, the following tax credits will no longer be available after this date:
- 30D Tax Credit for New EVs: This credit, which offered up to $7,500 for qualified new electric vehicles, will officially expire on September 30, 2025.
- 25E Tax Credit for Used EVs: The incentive for purchasing a pre-owned qualified EV - up to $4,000 - is also set to end on the same date.
- 45W Credit for Commercial and Leased Clean Vehicles: Commercial buyers and fleet operators should note that this credit will likewise no longer apply after September 30, 2025.
For buyers interested in taking advantage of any of the above incentives, Guaranty Chevrolet encourages acting before the September 2025 deadline. These incentives have offered considerable savings for both first-time EV buyers and returning customers, and their expiration could impact total purchase costs.
A New Incentive Emerges: Auto Loan Interest Tax Deduction
Replacing the sunsetting tax credits is a new, potentially powerful financial incentive: the Auto Loan Interest Tax Deduction. For many buyers, this change opens a valuable pathway to long-term savings, especially when financing a new or used vehicle.
Here's what we know:
- Eligible buyers may deduct up to $10,000 in annual loan interest for new personal-use vehicles - including both EVs and ICE models - with final assembly in the United States.
- This deduction applies to vehicles purchased between January 1, 2025 and December 31, 2028.
- To verify eligibility, look for VINs that begin with 1, 4, or 5, indicating U.S. final assembly.
This deduction shifts the narrative around vehicle incentives by making financing terms - not just vehicle type, a major factor in savings potential. Customers financing their new vehicle with an eligible loan may find significant tax-time benefits, depending on interest paid.
Why These Changes Matter
For years, EV tax credits have played a pivotal role in boosting consumer interest in cleaner transportation options. The end of the 30D, 25E, and 45W credits may mark a shift toward more broad-based financial incentives, such as this new loan deduction - a measure designed to benefit a wider range of consumers, including those interested in traditional ICE vehicles.
At Guaranty Chevrolet, we understand that these changes can create uncertainty. But they also bring opportunity. The auto loan interest deduction could prove especially helpful for those who plan to finance their next vehicle and are seeking ways to reduce long-term costs - even without qualifying for a traditional EV credit.
What You Should Do Now
If you are currently exploring an electric or plug-in hybrid model, there is still time to take advantage of the existing tax credits, provided the vehicle qualifies and delivery is made before September 30, 2025. Our team is prepared to help you understand which vehicles currently qualify, what the timeline looks like, and how to maximize the value of your purchase.
If you're planning a future purchase after that date, the new loan interest deduction may be the route to explore, particularly if you're financing a U.S.-assembled vehicle. Chevrolet's robust lineup of American-assembled vehicles, including both electric and traditional models, offers plenty of opportunity to benefit from this upcoming incentive.
Guaranty Chevrolet Is Here to Help
Contact us today to speak with an advisor, reserve an eligible vehicle, or begin your pre-approval process for an auto loan that may qualify for this deduction. We're committed to helping you make confident, value-driven decisions, no matter where the road takes you.
disclaimer: [i] For taxable years beginning after December 31, 2024, and before January 1, 2029, Section 163(h)(4) of the Internal Revenue Code of 1986, as amended, permits qualifying taxpayers to deduct interest paid or accrued during the taxable year on indebtedness incurred by the taxpayer after December 31, 2024, for the purchase of new qualifying vehicles, for personal use, with final assembly in the United States. Limitations may apply where a dealer has previously used a vehicle as a courtesy transportation vehicle. Personal eligibility to claim this deduction depends on the customer's own individual circumstances, including whether modified adjusted gross income exceeds the income thresholds contained in Section 163(h)(C)(ii). If customer qualifies, this deduction may be available irrespective of whether customer chooses to itemize deductions. Additional limitations apply, including a maximum amount of interest permitted for deduction in a given year. Customers should be directed to consult with their own tax, accounting, or legal professional or advisor to confirm eligibility for this deduction or if they have questions regarding their qualification to claim the deduction. This information does not constitute tax, accounting, or legal advice.
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Junction City, OR 97448
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