Summary
– The average used EV sits around $30,000, while pre-owned PHEVs are closer to $25,000
– Federal tax incentives of up to $4,000 are available for those purchasing a qualified used EV or PHEV in 2024
– Used EV and PHEV market has seen falling prices and increased inventory, offering significant savings
– Purchases made after 2023 qualify for the federal tax credit, with specific guidelines and income requirements
– Brands like Ford, Tesla, Kia, and Volkswagen offer great options for cheaper EVs and PHEVs, boosting potential savings for buyers
Article
Consumers looking to save money on their next used electric vehicle (EV) or plug-in hybrid electric vehicle (PHEV) have a range of options available to them. Purchasing a pre-owned EV or PHEV can offer significant cost savings, especially as federal incentives have been introduced to encourage more people to go green. While new EVs have been impacted by changes to federal policies, the market for used electric cars, trucks, SUVs, and PHEVs remains strong. The average price for a used EV is around $30,000, while pre-owned PHEVs usually cost closer to $25,000, though prices can vary depending on the make and model.
To provide up-to-date information on saving money through federal tax incentives, data was sourced from the IRS and other authoritative sources. Buying a qualified used EV or fuel cell vehicle from a licensed dealer for $25,000 or less can make buyers eligible for up to 30% or $4,000 in clean vehicle tax credit. This credit is part of the broader push in the United States for eco-friendly manufacturing and production efforts. The Inflation Reduction Act signed by President Joe Biden has made it possible for EV and PHEV shoppers to receive tax credits based on the purchase date of their vehicle.
While consumers may not save as much on taxes with a used EV or PHEV compared to a new model, there are still opportunities to reduce annual vehicle ownership costs. The federal tax credits of up to 30% of the purchase price, with a cap of $4,000, can provide significant savings. These savings are applied to federal income taxes rather than offered as an upfront discount at the time of purchase. However, certain criteria must be met to qualify for the tax credit, including income-related protocols and restrictions on vehicle purchase dates.
Buyers interested in taking advantage of the federal tax credit for a used EV or PHEV must be individuals who purchase the vehicle for personal use, must be the second-hand owner, and must meet income thresholds to qualify. Vehicles purchased before 2023 do not qualify for the tax credit, and specific guidelines set by the US government must be met to receive savings of up to $4,000. These guidelines include the vehicle’s sale price, age, weight, and battery capacity, as well as its intended use in the United States.
The current market for used EVs and PHEVs in North America has seen a significant increase in inventory, leading to dealers lowering prices on electric vehicles. This presents an opportunity for consumers to benefit from federal tax credits when purchasing a pre-owned electric or semi-electric vehicle. Popular brands such as Ford, Tesla, Kia, and Volkswagen offer a range of options for consumers interested in purchasing affordable EVs and PHEVs, further enhancing potential savings. Despite potential limitations on range compared to new models, the combination of federal tax credits and long-term fuel savings make switching to an electric vehicle an attractive option.
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