GREENSBORO, N.C. — There are a lot of rules when it comes to cashing in on the tax credits when buying an electric vehicle. To get the $7,500 tax incentive the vehicle has to be assembled in North America and its battery components and minerals must meet specific sourcing requirements, the car has to cost under a certain amount and your income can’t be over another amount and you’ll only get that money back after your taxes. Whew. That changes in the next couple of years, but until then...
Consumer Reports says leasing may be the answer. “If you’re set on buying a car and you know you qualify and you’ve talked to a tax professional, you know the car’s going to qualify, you can go ahead and do that. It’s going to get a little easier next year as dealerships are going to be able to process and give the credit at the point of sale, which makes it simpler, but it is really complex right now," said Randy Keith, Consumer Reports Auto Editor.
But if you’re eager to drive an EV now, Keith says a lease may get you on the road faster! The long and short of it is, that all those rules go out the window if you lease a vehicle, no matter where the car was made, no matter how much it cost, you can get that full $7,500 off the total price of the vehicle. And then the leasing company processes that credit up front which lowers your monthly payments.
Of course, the usual leasing rules apply. Along with a down payment, you’ll make monthly payments for a set number of months – and for a set number of miles. And at the end of the lease, you return the car to the leasing company.
Those rules can deter some traditional car buyers, but in the case of an EV, they might work to your advantage.
"Electric vehicle technology is changing really rapidly. There are new cars coming on the market. The range is getting longer for battery-powered vehicles, so the car that you buy today might end up being outdated in a few years, and leasing can help you avoid getting stuck with yesterday’s technology," said Keith.
And as automakers continue to lower the price of electric vehicles, trying to attract more buyers – you won’t take the hit if your leased vehicle is suddenly worth less.
Consumer Reports reminds you that you can negotiate the cost of a lease. Local car dealers are competing with each other for your business – so it never hurts to ask them to waive dealer fees and other markups.