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I'm interested to see what the $4,000 federal tax credit on used EVs does to the market

Discussion in 'General' started by Mark W, Sep 23, 2022.

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  1. Sep 23, 2022 #1
    Mark W

    Mark W Active Member

    CT
    So, if I understand correctly, starting on Jan 1, 2023 there will be a $4,000 tax credit available for used EVs with a purchase price of under $25,000. But this is only for EVs purchased at a dealership. So this puts dealership at a big advantage over private party sellers for these cars.

    Also, will there be shady under the table deals for cars who's market price in December was $25,000 - $28,000 or so? Take the Hyundai Ioniq Electric for example. Current used prices for 2019 models seem to be between $25,000 and $29,000. I see one right now for $26,990. On Jan 1, will a dealership sell it to you for $24,999 with an extra $1,000 on the side?

    If I go into a dealership on December 22nd and say I'll take that Chevy Bolt with a sticker price of $24,499 and pay you $24,999 if you sell it to me on January 2nd? Will dealerships and places like Carvana start paying people a little more for their used EVs under $25k in January, knowing that they will be able to sell them for a little more?

    Whenever there is a hard cliff for deals like this, it winds up making some interesting situations.
     

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  2. Sep 23, 2022 #2
    marshall

    marshall Well-Known Member

    South Puget Sound
    So are you suggesting that the dealerships will comment fraud? That seems like a huge risk to any legitimate business. I guess I don't see that happening much if at all. More likely they will continue making money the way they always do with financing.

    Since the way I read it the tax credit is not refundable, so it's possible that someone who owes taxes might share the tax credit and do something like this as a favor to a relative or friend. But there are costs in buying and selling that probably make this unprofitable or such a small profit that's it is not worth doing.

    That's likely, but don't they already do this?
     
    Last edited: Sep 23, 2022
  3. Sep 23, 2022 #3
    Mark W

    Mark W Active Member

    CT
    The difference is, that in January, Carvana can probably raise their price for an EV by $1,000 or $2,000, and the buyer would still be paying less net after the credit.

    I know what you mean though, I don't think most buyers or dealerships would have thought these things through by December or January, so my examples many be a little over the top. But after it has been in place for a while, I think the new credit might change the used EV market for cars under $28,000 in some ways, and maybe some interesting ways.
     
  4. Sep 24, 2022 #4
    Mark W

    Mark W Active Member

    CT
    Ha, I guess I'm the onlyh one interested in this. Typical:)
     
  5. Sep 25, 2022 #5
    bwilson4web

    bwilson4web Well-Known Member Subscriber

    Huntsville, AL
    Patience as the experiment has yet to be run.

    Bob Wilson
     
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  6. Sep 25, 2022 #6
    insightman

    insightman Well-Known Member Subscriber

    Ann Arbor
    You can guarantee the stealership organizations--so many of which are now large conglomerations--will have thought these things through. As always, there will be knowledgeable buyers, chumps, and knowledgeable buyers willing to pay the chump price to get what they want.
     
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  7. Sep 26, 2022 #7
    Bruce M.

    Bruce M. Well-Known Member

    Hilo, Hawaii
    Car dealers will do whatever they can get away with, including stuff that's borderline illegal or outright illegal if they think they can get away with it. That's how its been as long as car dealerships have existed. It's up to the buyer, alas, to be knowledgeable and willing to say no when appropriate.
     
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