If you’re shopping for an alternative-energy vehicle on a budget, a used electric vehicle might be a good fit for you. There are numerous perks that come with purchasing an electric vehicle, including tax credits. Sadly, the electric vehicle tax credit does not apply to used cars. You can find other used electric vehicle perks if you know where to look, and the savings that come with buying used might outweigh the benefits of the tax credit. Learn about the electric vehicle tax credit and where you can find used electric vehicle perks, below.
What Is the Electric Vehicle Tax Credit?
The electric vehicle tax credit is a tax credit for up to $7,500 on certain qualifying electric cars. It was passed in 2009 and applies to plug-in electric vehicles from 2010 and onward. The tax credit allows buyers to claim up to $7,500 in credit against their federal income taxes in the year they bought the car. Some car manufacturers advertise the tax credit as a discount, but shoppers pay the full price for the car at the time of purchase and redeem the tax credit at the end of the year.
There are some stipulations that come with the electric vehicle tax credit. Certain types of electric vehicles, including Tesla and General Motors, don’t qualify for the tax credit anymore. The full tax credit only applies to the first 200,000 vehicles a manufacturer builds. After companies hit that milestone, the tax credit gradually declines until it reaches zero. Tax credits on leased electric vehicles go to the car’s manufacturer and not to the driver, but some manufacturers will use the tax credit amount to lower your monthly payments. Lastly, the tax credit only applies to new electric vehicles.
Where to Find Used Electric Vehicle Perks
While the tax credit doesn’t apply to used electric vehicles, there are plenty of incentives at the state and local levels for drivers with used electric cars. Depending on where you live, there may be multiple perks for both individuals and businesses. Some perks include rebates, reduced vehicle taxes, carpool-lane access, exemptions from registration or inspection fees, free municipal parking, and a tax credit for installing an at-home charging station.
If you can’t find incentives at the state level, some power companies offer rebates to drivers who make the change to cleaner energy. For example, Edison International has a clean fuel rewards program that offers $1,000 back to eligible electric vehicle owners. Organizations such as the U.S. Department of Energy and Plug In America have resources you can use to locate perks in your area. Do your research on state incentives before shopping, as some incentives are time-sensitive and may have expired.
If you decide to purchase an electric vehicle, you’re going to need quality insurance at an affordable price. The General has a range of different policies for every driver, regardless of driving record or credit score. You can get a quote in under two minutes or visit our blog to explore more articles about all things cars.