The Inflation Reduction Act’s $4,000 tax credit is certainly a godsend for used EV buyers on a budget. However, despite the program being one of the highlights of the IRA’s plug-in vehicle-positive policies, used car shoppers haven’t had the easiest time actually getting the money in their hot little hands. Well, things have gotten easier.
One of the biggest online used car dealership chains, Carvana, announced that it has streamlined its buying process. The EV tax credit can now be factored right into the price.
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The Inflation Reduction Act Covers Used Cars
The IRA’s incentives also include used cars. Used cars under $25,000 are eligible for up to a $4,000 tax credit. The credit can only be used once every three years, and is limited to single filers who earn $75,000 per year or less. The income limit is $112,000 for single filers who are head of household, or $150,000 for couples that file jointly.
To some, this may sound silly, but this is actually kind of a big deal for used car buyers who are on a budget (which these days, is basically everyone.) For 2024, the used car EV tax credit shifted from a refund given to a tax filer at the end of the year to a rebate directly redeemable at a vehicle’s point of sale, so long as that place is a registered dealership.
That sounds easy enough, but it meant that dealerships had to opt in and offer the service to their customers. Many dealerships didn’t, forcing their clientele to file the paperwork themselves and accept the tax credit at the time of filing their taxes, rather than right in the dealership’s finance office.
For the buyer on a budget, that’s no bueno. Dealerships that did opt-in and take the credit at the point of sale would put that $4,000 directly toward the price of the vehicle. That big bump would help with financing, since the vehicle’s total financed price would be $4,000 lower, leading to a lower monthly payment. That instant $4,000 off could be the difference between a sale and a disappointed EV hopeful pushed out of their reasonably priced electric dream car.
Yet, dealerships have been slow to make sure used EV buyers can take advantage of the vehicle’s point of sale. Carvana’s biggest competitor CarMax has a whole page on how a buyer can file for the tax credit, but it doesn’t actually let shoppers use the money at the vehicle’s point of sale.
Carvana Screenshot
Ultimately, this is good for EV buyers and good for Carvana. “Rather than waiting for a lower tax bill next year, customers can now seamlessly access up-front savings of up to $4,000 on the price of the vehicle. These savings also automatically flow through to eligible customers’ financing terms,” Carvana said in a press release. Each EV eligible for the tax credit has a green icon. Carvana said it will smoothly determine eligibility before financing or payment, and tabulate the final sales price.
Of course, the same eligibility for the used car tax credit still applies at Carvana. The car must be under $25,000. Single earners can’t earn more than $75,000 per year, and the credit can’t be claimed more than once every three years.
Still, if you’re looking for a cheap EV, Carvana might not be a bad way to go. I certainly got pretty caught up searching for deals while writing this piece.
Contact the author: kevin.williams@insideevs.com
Carvana Made It Way Easier To Get A Used EV
The automotive industry is experiencing a significant shift towards electric vehicles (EVs) as consumers become more conscious of environmental issues and seek more sustainable transportation options. While the adoption of EVs is on the rise, many potential buyers have found it difficult to access affordable and reliable used EVs. However, thanks to Carvana, this problem has been addressed, making it much easier for consumers to purchase a used EV.
Carvana, an online platform for buying and selling used cars, has revolutionized the car-buying process by offering a unique and convenient way to shop for vehicles entirely online. Their user-friendly website allows customers to browse an extensive inventory of quality used cars, including a wide selection of EVs. With just a few clicks, buyers can easily compare different models, read detailed descriptions, view high-resolution photos, and even schedule a virtual tour of the vehicle.
One of the key advantages of buying a used EV through Carvana is the transparency and peace of mind it offers to consumers. Each vehicle undergoes a thorough inspection and comes with a detailed vehicle history report, so buyers can be confident in the quality and condition of the car they are purchasing. Additionally, Carvana offers a 7-day money-back guarantee, allowing customers to return the vehicle if they are not completely satisfied, which eliminates much of the risk associated with buying a used car online.
Another significant benefit of buying a used EV through Carvana is the competitive pricing and financing options available to consumers. Carvana’s direct-to-consumer model eliminates the need for a traditional dealership, resulting in lower overhead costs and ultimately lower prices for buyers. Additionally, Carvana offers a range of financing options, including competitive interest rates and flexible terms, making it easier for consumers to afford the EV of their dreams.
In conclusion, Carvana has made it significantly easier for consumers to purchase a used EV by providing a user-friendly online platform, transparent vehicle information, competitive pricing, and flexible financing options. As the demand for EVs continues to grow, Carvana’s innovative approach to selling used cars is sure to benefit both consumers and the environment. By offering a convenient and reliable way to shop for used EVs, Carvana is helping to accelerate the transition towards a more sustainable and electric-powered future.