Looking to buy a new car? A new federal law just made it more rewarding than ever—especially for Credit Union of Denver members like you.
From 2025 through 2028, auto loan interest is now tax-deductible on eligible new vehicles. That means you could deduct up to $10,000 each year in interest when you finance your new car. The deduction is “above-the-line,” meaning it will apply to people who claim the standard deduction and those who itemize. The goal of the new auto loan interest deduction is to make cars more affordable for buyers, given that average car prices remain high.
✅ Who Qualifies?
To benefit, here’s what you’ll need:
- New vehicle only (not used or leased)
- Final vehicle assembly in the U.S.
- Personal use only (not for business or fleet use)
Limitations:
- Single Filers - Deduction begins phasing out at a modified adjusted gross income (MAGI) of $100,000.
- Joint Filers - Phase-out begins at a MAGI of $200,000.
- Phase-out Amount - For every $1,000 of income over the single and joint filer threshold, the available deduction declines by $200.
🚨 EV Buyer? Act Fast.
Planning to buy an electric vehicle (EV)? The federal EV tax credit ends after September 30, 2025. That’s up to $7,500 in savings on new EVs that you’ll miss if you wait.
Looking to save more with a used EV? While it won’t qualify under the Big Beautiful Bill, you can save money with reduced prices and still up to $4,000 in Used Clean Vehicle Tax Credits through September 30, 2025.
Now’s the time to take advantage while inventory and incentives are still strong!
💡 Smart Ways to Maximize Your Savings
Even if your full deduction is less than $10,000, it can still help offset today’s car prices and help you save in interest payments. Here’s how to keep your costs down:
1. Research your price. Know the fair market value of the vehicle you’re considering with tools like Kelley Blue Book or Edmunds.
2. Understand how auto loans work. This includes how car loan length affects your total cost and how your credit profile impacts your interest rate.
3. Compare offers. Consider your options to find what works best for you. At Credit Union of Denver, we have competitive interest rates to help you save even more!
4. Use our Auto Loan Calculator. Play with the variables to find your ideal monthly payment before you shop.
💳 Finance with Credit Union of Denver, Deduct with Confidence
When you finance your vehicle with us, you’re not just getting a competitive rate—you’re unlocking a government-backed tax benefit that could help reduce your new auto purchase costs.
Tip: Use any tax refunds to put toward the principle of your auto loan. There are no prepayment penalties.
Now’s the time to buy new and finance smart, talk to a representative 303.202.5659 or apply online today to get started. Terms available up to 84 months. Current best rates available at cudenver.com.