New Year, New (to you) Electric Vehicle?
EV Tax Credits Now Granted at Time of Sale for New and Used Vehicles
Did you know that, as of Jan. 1, 2024, the federal plug-in electric vehicle (EV) tax credit can be applied at the point of sale? That means you don’t need to wait until you file your federal tax return to claim the credit.
Instead, EV purchasers may leverage the tax credit through the dealer at the time of sale, resulting in a price reduction of the same amount. Dealers can offer similar discounts to lessees.
New EVs may be eligible for credits of up to $7,500. A longer list of pre-owned EVs may also be eligible for credits of up to $4,000. A used EV’s model year must be two years before the calendar year of the vehicle purchase, meaning that EVs from 2022 or earlier are now eligible. It must also have a sales price of $25,000 or less. To search for eligible EVs and learn more about the Clean Vehicle Credit, see FuelEconomy.gov.
In early 2023, Virginia ranked #10 among states for new EV registrations. EVs make up only a few percent of cars on the road. Image source: InsideEVs.com.
Whether you take the "cash-on-the-hood" savings or claim the credit later with your tax return, make sure to get a "time-of-sale" report confirmation from the dealer.
Tesla’s website says they apply the time-of-sale discount at the time of delivery. FCCAN visited and called four major dealerships in the City of Falls Church and Tysons Corner to ask how they are navigating the EV credit.
At Koons Ford, there are currently three Ford models (all model years 2022-2024) that qualify for the individual EV tax credit. At the time of this post, the dealership is not currently set up to offer the cash-on-the-hood discount, so you’d claim your credit in 2025 when you file your taxes. While no new Volvo or Kia EV models currently qualify for the federal tax credit, Beyer Volvo reported that one of the lower-priced 2024 Volvo models with a basic trim package may qualify soon.
FCCAN will update this post if we hear back from Stohlman VW (many ID.4 models qualify) or Koons Chevrolet (2023 Bolts) in the Tysons Corner area.
If the new EV model you want doesn’t qualify for the tax credit for individuals, consider leasing! The leasing dealer will take the business tax credit and fold those savings into the lease terms.
PlugShare.com shows available EV charging in the City of Falls Church. Almost all are publicly accessible, but certain chargers like Koons Ford and Hilton Garden Inn are restricted for customers.
Whether you’re buying or leasing a new or pre-owned EV, keep in mind several considerations while researching:
Vehicle range | EVs can be ideal for routine driving, including commutes to work, errands, and weekend activities. Driving longer distances in an EV is very feasible, depending on the vehicle’s range, and especially with some planning to scope out charging stations along the way.
Battery warranty | EV manufacturers must cover the battery against failure for at least eight years or 100,000 miles after the initial purchase. If purchasing a pre-owned EV, that warranty may transfer to you.
Vehicle features and charging | Every automaker is different in terms of what their EVs can do and how they are equipped. Make sure you understand the compatibility between the vehicle and the charger, as there is currently not a universal standard for the connector.
Public charging access | While many EV drivers charge at home for convenience and savings, that may not be feasible for all, so it’s important to know whether charging is available at work, school, or other destinations. See the City’s EV webpage and resources like PlugShare.com for more information about nearby charging stations.
Want to chat with an EV driver before you become one? FCCAN is happy to relay your questions to the FCCAN community of EV drivers so that you can hear about their experiences. Just email fallschurchclimate@gmail.com.