If I get the $7500 credit - how is that figured? I assume I'm paying tax on, say, a $47,500 car, and then taking $7500 off my income tax. It should be that you are taxed for a $40,000 car, but I'm guessing it doesn't work that way. I'm about to buy a new BEV, and am just curious. I won't be shocked if it's option A - but at 7%, that's a $525 difference. So the actual credit is more like $7000. (yeah, I'll whine about anything. Even free money)
Hi check out the US Federal website for the qualifying and amount eligibility details. It is a credit that you can take off of your TI.
What did no one from those Western states mention, as to why their cars were so cheap? CO has a $5000 state rebate, and a $3500 electric co. rebate! And here I am in GA, giving everyone dirty looks when they only come down $2000... (plus, shipping would be $1000)
If you're buying, you'll pay sales tax on whatever the negotiated price of the car is. The dealer doesn't know or care whether you qualify for all, some or none of the federal credit, since it's partially based on your income.
Not sure I understand the logic, so let me work this out. Let us say you buy a car at $40,000 + $1000 for transportation + dealer stuff + say $3280 for sales taxes @8%. Your total out of door cost is $44280. You can now reduce your income taxes by $7500 when you file income taxes in 2020. So this needs your tax liability for 2019 (after all the other deductions and personal allowance) to be more than $7500. So your net cost is $44280-$7500,= $36,780. I think your assumption was that your out of the door cost is $40,000-$7500=$32,500 +$1000+$2680 (sales tax)=$36180. So you are pretty close, that if they allowed you to take the credit in advance, you would have saved 8% of $7500, which is $600. (Your Mileage will vary, as actual costs, taxes etc vary, but $500 to $ 600 is about the ball park). However, there is another cost, the time value of money. If you buy the car in April 2019 and get your refund in April 2020, you have lost potential growth at say 4% for a year, which is $300. However if you bought the car on December 31st and got your refund by Jan 31st, you have an opportunity cost of $25. Of course, if you can manage your withholding so that you contribute less per month, you can minimize the impact, but those become hypothetical calculations for most. To put it simply, you have to fork out the money upfront and you will get it back after say 1 to 15 months, based on when you buy and when you get your refund.
Can you BUY a Clarity BEV? I thought they were lease only. Sent from my SM-N960U using Inside EVs mobile app
Yeah. Ok. I'm an idiot. I had just been reading Clarity posts, and my brain didn't change forums... Sorry about that! Sent from my SM-N960U using Inside EVs mobile app
Again, other than for Tesla, there may be promotions and dealer incentives that could nullify any advantage in buying in the later part of year. That said, there are a lot of promotions in December, which could be a double benefit, lower prices, less period of float. However, it still a gamble, hence I would not bet on that.
