NEWS & UPDATES

Navigating Legislative Changes Together

Big Beautiful Bill – Vehicle Interest Deduction

January 31, 2025 | explorers credit union

Understanding the Proposed Vehicle Interest Deduction

You may have heard recent conversations about the “Big Beautiful Bill” and potential changes related to vehicle loan interest deductions. While legislation can sometimes feel distant or complex, changes like these can show up in very real ways—from how you plan your next vehicle purchase to how you think about your overall household cash flow.

For some members, this proposal could create opportunities to reduce taxable income when financing a vehicle. For others, it may simply raise important questions, such as:

• Does this apply to me?
• How would it work?
• Should it change how I plan my next vehicle purchase?

These are exactly the kinds of moments where understanding the bigger picture—not just the headlines—matters.

You Don’t Have to Navigate Change Alone

Any time laws or financial rules are proposed or adjusted, it’s natural to feel uncertain. At Explorers Credit Union, our goal is to ensure our members don’t have to navigate change alone.

We’re paying close attention, asking the right questions, and sharing clear, educational information so you can make confident financial decisions—today and in the future.

What This Could Mean for You

While details may continue to evolve, current discussions suggest that certain taxpayers may be eligible to deduct qualified auto loan interest for tax years 2025 through 2028. If finalized as proposed, this could influence how some members think about vehicle financing and long-term planning.

Understanding whether this may apply to you, and how it fits into your broader financial picture, is an important step. That’s where education and professional guidance work hand-in-hand.

What You Need to Know (Based on current information)

Tax Deduction Overview

Taxpayers may be able to deduct qualified auto loan interest per year for tax years 2025 through 2028, subject to eligibility requirements.

Eligibility Requirements

To qualify, all of the following must be true:

• The interest is from a loan on a new passenger vehicle used for personal purposes
• Used vehicles do not qualify
• The vehicle was purchased on or after January 1, 2025
• Borrowers must include the Vehicle Identification Number (VIN) when claiming the deduction

Qualifying Vehicles

The following vehicle types may qualify:

• Cars, minivans, vans, SUVs, pickup trucks, and motorcycles
• Must be assembled in the United States (VIN lookup required)
• Must have a gross vehicle weight rating under 14,000 pounds

Where to Find Your Interest Paid

Members can locate their total interest paid year-to-date for qualifying vehicle loans on their December 31 Credit Union statement.

Our Commitment to You

At Explorers Credit Union, our commitment remains the same: to support, educate, encourage, and inspire you on your financial journey.

While we do not provide tax advice, we believe strongly in helping our members stay informed and empowered. That means sharing timely, trustworthy information and pointing you toward the right questions to ask as changes unfold.

As part of that commitment, we are also reviewing insights and educational resources from credit union experts who are actively monitoring this legislation. We’ll continue translating complex topics into clear, practical insights—so you can focus on what matters most: building a financial path that works for you.

This article is provided for educational and informational purposes only and should not be considered tax, legal, or financial advice. Tax laws and regulations are subject to change and may vary based on individual circumstances. Explorers Credit Union does not provide tax advice. Members are encouraged to consult with a qualified tax advisor or tax professional to determine how any potential legislative changes may apply to their specific situation.