The ‘Big, Beautiful Bill’ offers a new tax deduction for buyers who finance their new vehicle purchase. We’ll explain what this bill means, who is eligible, why you should consider purchasing an electric vehicle now, and and how Cable Dahmer of Topeka can help you save on your next new vehicle.
New Vehicle Interest Deduction
Under the Big Beautiful Bill, eligible buyers can write off up to $10,000 of auto loan interest each year. Because it’s an “above-the-line” deduction, you claim it whether you itemize or take the standard deduction, lowering your adjusted gross income and reducing your overall tax burden.
Historically, interest on a car loan offered no tax relief, but this law changes that. For instance, financing a $50,000 Chevrolet Silverado 1500 at 5 percent APR over five years will incur about $6,600 in total interest. You can deduct every dollar of that interest on your return, each year, turning what used to be an expense into a valuable tax deduction.
Qualifying for the Tax Deduction
In order to qualify for this tax deduction, the follow requirements must be met:
- Vehicle must be new
- Vehicle final assembly is in the U.S.
- Vehicle is financed through a standard and secured loan
- Vehicle must be for personal-use; commercial vehicles and leases do not qualify.
- Modified adjusted gross income must be below: $100,000 for single filers and $200,000 for joint filers. For every $1,000 of income over these limits, your deduction reduces by $200.
- Must purchase between the beginning of 2025 and the end of 2028.
You’re eligible for this tax deduction if you and the new vehicle you’re financing meet all of these requirements.
Claiming the Interest Deduction on Your Taxes
- Gather your documents. Keep Form 1098 and annual loan statements showing the interest you paid.
- Fill out Schedule 1. Enter the deductible interest on the line for other adjustments.
- File your return. Use tax software or a preparer that supports above-the-line deductions. You do not need to itemize to claim this benefit.
Claiming the deduction is straightforward. Our finance team at Cable Dahmer of Topeka can estimate your annual interest deduction so you know what to expect before you buy.
EV Tax Credits are Ending
If you are considering an electric vehicle, the $7,500 federal tax credit for new electric vehicles expires on September 30, 2025. No further federal rebate will be available after this date.
Models like the Chevrolet Equinox EV are still currently eligible for the $7,500 tax credit. Buying before September 30th, gives the full $7,500 credit for qualifying customers. Leases do not qualify for the new auto loan interest deduction, but may still receive a portion of the EV credit as of now. Contact us if you have questions about specific vehicle eligibility.
Why Shop at Cable Dahmer of Topeka
When you buy at Cable Dahmer of Topeka, you can experience the following benefits:
- Wide selection of new and used cars from Chevrolet, GMC, Cadillac, Buick, and more!
- Competitive pricing and an easy sales process
- 5-Year Unlimited Mile Powertrain Warranty on new vehicles
- 5-Year 100,000-Mile Powertrain Warranty on select used cars
- Flexible financing options
- Certified GM Service and Parts departments
- Free Pick-Up and Delivery with Cable Dahmer Connect for Service Appointments
When you visit Cable Dahmer of Topeka, our finance team can estimate your annual interest deduction and walk you through all the financing details. We can help you with a loan that fits your budget for your next vehicle purchase.help you structure a loan that fits your budget for your next vehicle purchase.
What to Do Next
Don’t miss a unique opportunity to save money on your next vehicle. Here’s what you can do next:
- If you’re considering an electric vehicle, purchase before September 30, 2025, to secure the $7,500 credit for qualifying vehicles.
- Finance your new vehicle at Cable Dahmer of Topeka to qualify for up to $10,000 in deductible interest.
- Consult your tax preparer to ensure you claim the maximum allowed deductions.
- Explore our latest GM offers online or in person and save even more.
Contact us at Cable Dahmer of Topeka to discuss eligible vehicles and financing options.
Contact Us
At Cable Dahmer of Topeka, we make it easy to purchase your next car, truck, or SUV. We’re happy to help estimate your potential tax savings and help you secure competitive financing. Visit us in Topeka, KS or call 785-422-8586 to schedule your test drive today and drive home a great deal on a new vehicle.
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