Summary
– Qualified used electric vehicles have been eligible for a federal tax credit since 2023 for up to 30% of the sale price or $4,000, whichever is lower
– To qualify, the vehicle must be an electric model from at least two years prior to the year of purchase, cost $25,000 or less, and be sold by a licensed dealer
– Purchasers must also meet income requirements, which vary depending on filing status
– The Nissan Leaf, Chevrolet Bolt EV, Hyundai Kona Electric, Mini Cooper SE Hardtop, and Mazda MX-30 are some of the cheapest 2022 model year EVs
– The federal tax credit for used EVs presents a cost-effective opportunity for buyers to secure an eco-friendly vehicle in the expanding used EV market.
Article
The federal tax credit for qualified used electric vehicles has been available since 2023, allowing buyers to receive up to 30% of the sale price or $4,000, whichever is lower. Although this is less than the $7,500 maximum credit for a new EV, it can still result in a good deal for buyers looking for a low-mileage used vehicle. The requirements for a car to qualify for this tax credit include being an electric vehicle of a model year at least two years prior to the purchase year, being purchased for $25,000 or less, and being sold by a licensed dealer.
In addition to meeting the qualifications for a used clean vehicle tax credit, the buyer must also meet certain gross income requirements, such as having an adjusted gross income of $150,000 or less for joint filers. The Kelley Blue Book prices for qualifying used EVs such as the Nissan Leaf, Chevrolet Bolt EV, Hyundai Kona Electric, Mini Cooper SE Hardtop, and Mazda MX-30 reveal that the Nissan Leaf is the most affordable with an estimated sale price of $15,828 before the credit. However, for buyers prioritizing range, the 2022 Lucid Air with a 446-mile range may be a desirable option, although it comes at a higher price point.
Considering the fact that new cars lose 20% of their value when driven off the lot, a new car price of more than $17,501 would make a used car a better deal with the $4,000 federal tax credit. This means that, as of publication, there are no new electric vehicles available that would offer a better value than a qualified used electric vehicle with the tax credit. The expanding used EV market, combined with the federal tax credit, provides buyers with the opportunity to purchase a cost-effective and eco-friendly vehicle that meets their needs.
Overall, the availability of a federal tax credit for qualified used electric vehicles presents a unique opportunity for buyers to access affordable and environmentally-friendly transportation options. By meeting specific requirements and considering factors such as sale price and range, buyers can identify the best options available in the used EV market. With the increasing popularity of electric vehicles and the incentives offered by the government, more consumers may choose to make the switch to electric vehicles in the future.
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