Featured Last call for EVs!

Had to read the article to understand how the BBB can 'add' to the soon to end EV tax credit.

Trump’s new law offers an annual tax credit of up to a $10,000 on the interest of loans for new vehicles as long as they're less than 14,000 pounds and assembled in the United States. It covers purchases made in 2025 through 2028.
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OK, it's a tax credit on the loan interest. Too bad, I bought my Equinox EV this year but with 0% financing from GM. No additional credit for me from the new administration. Sigh

But, I am going to add the home battery storage to our solar panels before the end of year to take advantage of 30% tax credit while it last.

 

To be fair, 0% financing is better than a tax deduction on interest for taxes.

Let's consider that, while there is often a cash discount promotion alongside 0% financing promotions, its still a guaranteed savings relative to actually financing at a higher rate - even with the 10k tax incentive the US is introducing.

If its a tax *deduction* then the actual benefit is way smaller than 10k for most people. This is because then you only save the average tax rate of the buyer applied to the interest paid. So if you pay 20% average federal tax rate, after all other deductions* you would only be credited 20% of the interest paid back. This would turn a 5% loan into a 4% one. Way worse than a 0% financing promotion.

And the BBB also has that SALT thing american politicians were all up in arms about right? So state and other taxes paid will reduce federal tax owing if I'm understanding that correctly. And that's been raised pretty substantially I think? So even if it *was* a tax credit, an average person buying an average new car with an average sized loan at the average interest rate would still get nowhere close to the 10k amount back. If they reduced their average federal tax owing down to 10% because of the SALT cap going up (for example), then they'd only be reducing their effective interest rate from 5% to 4.5%, an even smaller amount of money back.

I googled a NYTimes article that says the average buyer could expect something like $500 in benefit from the average car loan after paying $3,000 interest in the first year from this new tax deduction. Which, isn't that much really. And as someone makes payments, the principal owing goes down, meaning the interest calculated goes down over the life of the loan too. So the benefit of the tax deduction also goes down. And unlike a house which takes 20-30 years to pay down, a 5 year car loan will see the benefit reducing substantially in each year of the loan since the prinicipal pays down so much faster.

 

Of course it is. It was a "tongue-in-cheek" statement. As your calculation shows, there is no way new BBB's car loan interest tax credit is going to be much help for most consumers. I will take 0% financing over any tax credit on interest anytime.

BTW, I could have paid cash for the Equinox EV I purchased because I got more than what I paid for our previous PHEV (Ford Escape PHEV) returned to FORD. Plus, Equinox EV enjoyed a full fed tax credit applied POS and other incentives added made the final price almost 50% off MSRP. But with 0% financing in offer, why should I pay the lump sum to a dealer or GM? In this case, it really pays to borrow money to invest it.

And even better yet that applies to this community is that, the original cash I used to pay for the Ford Escape PHEV came from the sale of the less than 2 years old 2021 Prius Prime Limited I owned. Due to the condition of the car and seller's market for the used car at that time, I also received more for the used PP than what I paid. Come to think of it, for the last 5 cars since 2017 (three Prius Primes, Escape PHEV, and now Equinox EV), I have not lost a single penny when I switched my car. lol

 

If there was also a cash discount for paying cash, I would have paid cash in your shoes. But it sounds like they didn't offer that as an option alongside the 0% financing for you, so yeah, of course free financing is always better.

In no world would I ever pay off a 0% financing car faster lol, I'd rather keep the cash in hand at that point. That cash can always be allocated to a mortgage/other loan first, or savings, or to literally any future purchase that *could* carry a financing charge lol

 

Yeah, if there was cash bonus, I would have taken that. But as you guessed right, there was no such offer. In fact, the dealer was not sure if the 0% financing would apply to my purchase for some technical reasons. If it was not offered, then I would have paid cash instead of taking any financing with interest.

 

My taxes are going to be pretty much zeroed out after the rebate on OT and the increased standard deduction.
(according to AI, a single filer in 2025 would need a taxable income of approximately $82,209 to pay $13,000 in federal income taxes.)
I'm a 'dually' MY AGI needed to generate $13k is probably somewhat to the right of that.
Nobody knows (yet) about above the line versus below the line kickbacks - sooooo, I will wait to see if some drive-by accounting or tax professional weighs in.

As far as the EVangelist kickbacks for BEVs?
I've never really been a fan or a foe per se, but it IS nice to see a car tax kickback that more 'normies' - I'm good with THAT!

I remember when people in this very same forum were pining away for a 'hippie' rebate to help offset the hybrid premium.

As it turns out?
It wasn't needed because hybrids made their way into viability ON THEIR OWN MERIT - and now some people, again, in this very forum are surprised to learn that some road repairs get paid for with............(wait for it!)...............gas taxes.
This has led SOME states to institute a separate hybrid and BEV tax!!!
(also known as people in the upper 10% "paying their fair share!)

 

I'm hoping we can get the heat pump water heater in under the deadline. I think battery storage for our solar setup might be a bridge too far, but I did ask my electrician for a bid anyway.

They keep finding all kinds of new giveaways in the new bill, so if I have to I'll put a putting green in the corner of the yard and take a write-off on golf cart batteries instead.

 

Oh?

Do all hybrid cars qualify for tax credits? | HowStuffWorks.

 

They do for a few years if they're 'made in 'Merica!!' If I'm accurately informed.

 

"As of July 4, 2025, the One Big Beautiful Bill Act allows workers to deduct up to $12,500 of overtime pay ($25,000 for joint filers) from their federal taxable income for tax years 2025 through 2028."
Tax on Overtime Pay in 2025: What's Happening? | Kiplinger

As a deduction, you can't use the overtime amount with the standard deduction.

 

The Chevy dealer gave me $7,000 discount on the car separate from other rebates, incentives. This was on top of 0% financing from GM. GM also gave me $3,000 additional rebates. Plus $7,500 fed tax credit applied POS, and another $7,500 state incentives applied POS. Total discount $25,000 off from the MSRP. $47,000.

I know 0% financing advertise can be a gimmick sometimes. But in this case, GM must wanted to move the car even at loss. I bought Toyota PPs at similar discounts, incentives, rebates. '21 PP Ltd $26K, '20 PP LE $19K, '17 PP Premium $24K were the actual prices I paid including tax and fees. And since I sold them more than what I paid on 3 out of 5 vehicles purchased new in the last 8 years, I did not use any money other than initial outlay of $20k on all 5 cars I purchased new (excluding other car related costs such as fuels, insurance, maintenance, repairs, accessories).

 

Oh, by the way, I canceled my pre-order of SLATE pickup. If they can materialize a sub $20k BEV truck, I wanted it for my in-town only light duty hauling jobs. But, apparently the original advertised starting price below $20k was counting on the $7500 fed tax credit. Now, it won't be available after Sep 30. They backed off the below $20k ads. It is now starting at $27k. Too high of price for an Amazon made tiny BEV truck.

https://www.caranddriver.com/news/a65317250/slate-truck-price-change-ev-tax-credit/

 

I'm going to stick a pin in this for about 6 months.
As I mentioned in #7 I fix phones for a living and people do not use phones in 2025.

SO.

We will see if 'above the line' deductions are a 'thing.'
The Trump administration IS fully capable of being ham-fisted enough to fight for tax-deductions that 90% of people who (like me) are non-exempt hourly employees OR work under the minimum wage for tips - ARE NOT ELIGIBLE to file for!

HOWEVER (comma!!!!)
My finely honed "Spidey senses" tell me that the 'big brains' in the room would be ALLL OVER that like a bum on a bologna sandwich!!!! (**)

It would be the lead story in CNN.
Somehow?
LIKE MOST OF THE 90% in America I will be BOTH better off AND worse off with the SECOND multi-trillion dollar reconciliation bill passed with zero bi-partisan support.

I put a pin in this because I TRY (and often fail) to be an honest broker.
If (as a 90-percenter) I am unable to file with the standard deduction AND if I cannot take the tax from MY ($20K so far!!!!!) OT as a deduction then I will report back in this very thread in this very forum.

BONUS QUESTION...
What are interest payments on a American Built $50,000 BEV?


(**) WITH profound apologies to the 'unhoused.'

 

That's how it has always been. Take the standard deduction or itemize the separate deductions. Then use whatever is higher.

 

Speaking of being an honest broker......
Don't BEVS actually STILL get a tax kickback?

According to the Googles:
The "Big, Beautiful Bill" (BBB) includes a provision for a tax deduction on car loan interest, specifically for vehicles assembled in the U.S. This deduction is capped at $10,000 annually and phases out for higher earners. The bill, which has passed the House but awaits Senate approval, aims to provide tax relief, particularly for lower- and middle-income taxpayers

SO
DON'T BEVs STILL HAVE A TAX KICKBACK?
If the total interest on a $57,000 loan for 4 years at 5.5% interest is $12,540. (Derived by multiplying the principal amount ($57,000) by the interest rate (0.055) and the loan term in years (4).
Isn't that MORE than $7500???

What am I missing?
I took the average EV price in the US (57K) and presummed that BEV owners wouldn't

 

No, because that's not how tax *deductions* work. See my post above.

A tax deduction simply lowers your taxable income. So your savings reflect your average tax rate by lowering the top end of the marginal tax rate you end up paying and the total income against which you're taxed.

If your post about not paying federal taxes on income below roughly 80k USD is correct, then a federal tax deduction would have no impact or benefit unless you make more than 80k.

If you pay average 10% federal tax, then the most you get back as a tax benefit is 10% of whatever you paid in interest over the course of a year. In the example you provide, it would be 1,254 tax refund spread over 4 years. Or, an average of 313.50 per year