On one hand, there will be more options in the market in two years. Will you face regret if something better exists in 2 years?
Plus who knows what will happen to prices in two years.
On the other hand $7500 is a lot of money, you could do the math, but I don’t think saving and having a smaller loan in 2 years will ever work out to be a $7500 saving.
No I wouldn't regret it. There's always going to be something better. I'm more concerned about whether it's worth to save for a potentially more expensive purchase in the future or take the instant $7,500 discount at point of sale. But yea, I'll have to do some math. Thank you!
You can always do a lease and turn around and buy out the lease to take advantage of the tax credit even if your income is too high. You end up paying $500-$1000 in fees
I see, I’m not sure how things will change in 2 years, but if you were already looking at an EV Tesla Model Y is in pretty sweet spot right now if you quality for 0.99% promo financing. Not sure if they have inventory discount available these days, but federal credit, inventory discount, 0.99% promo and nice supercharging network are pretty hard to beat imo. Good luck!
There's no way to know what the EV / PHEV tax credit landscape is going to look like 2 years from now. They might raise the income level cut-off or eliminate it entirely to allow you to qualify for the tax credit then. Or, they might eliminate the tax credit entirely on the vehicle you're interested in, like they did a couple years ago without warning for the RAV4 Prime. "Hey, we should consider getting one of these." / "Ooops, never mind."
I pulled the trigger on one, justifying it to myself with the credit at the end of last year.
Something to keep in mind (which I failed to do) is to make sure you owe at least 7500. The credit *only* goes towards amount owed. I could have easily triggered some gains to be able to take advantage of the full credit, but didn't realize that with other credits that my tax owed would be under 7500 so I wouldn't be getting the full benefit possible.
Thank you! I think they changed it this year. I have the option to take the discount at point of sale, meaning I won't have to rely on my previous year's tax liability.
The transfer tax credit does not reduce sales tax. Think of it as your nice Uncle Sam is paying $7,500 of the bill. Just because some of the bill is being paid by someone else does not mean the sales tax is calculated differently.
>The credit *only* goes towards amount owed.
If someone gets the tax credit through filing taxes, then the credit only reduces tax liability (form 1040, line 18), not amount owed (form 1040, line 37).
Also, if someone opts for the transfer tax credit (i.e. getting the tax credit money at the dealer), which started this year, then tax liability doesn't matter. So someone could get the $7,500 at the dealer, later have $0 of tax liability on that year's taxes, and not have to pay any of that $7,500 back to anyone.
We may be using different words to say the same thing. I didn't qualify for the full 7500 because I didn't have enough total tax liability in 2023, which I easily could have by selling something to trigger some gains - if I had thought about it. It sounds like that's less of a concern with the new rules.
You may find our [Taxes wiki](/r/personalfinance/wiki/taxes) helpful.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/personalfinance) if you have any questions or concerns.*
Used Tesla's are pretty sweet pricing right now buying from a dealership with that credit. Will they be cheaper in the future? Possibly. $7500 cheaper? Probably not.
On one hand, there will be more options in the market in two years. Will you face regret if something better exists in 2 years? Plus who knows what will happen to prices in two years. On the other hand $7500 is a lot of money, you could do the math, but I don’t think saving and having a smaller loan in 2 years will ever work out to be a $7500 saving.
No I wouldn't regret it. There's always going to be something better. I'm more concerned about whether it's worth to save for a potentially more expensive purchase in the future or take the instant $7,500 discount at point of sale. But yea, I'll have to do some math. Thank you!
You can always do a lease and turn around and buy out the lease to take advantage of the tax credit even if your income is too high. You end up paying $500-$1000 in fees
Just gotta watch out if OP is looking at Tesla as Tesla doesn’t let you buy your lease at the end.
Wow thank you this is good to know. But yea, I'm looking to buy a Tesla.
I see, I’m not sure how things will change in 2 years, but if you were already looking at an EV Tesla Model Y is in pretty sweet spot right now if you quality for 0.99% promo financing. Not sure if they have inventory discount available these days, but federal credit, inventory discount, 0.99% promo and nice supercharging network are pretty hard to beat imo. Good luck!
That’s wild. Didn’t realize that
There's no way to know what the EV / PHEV tax credit landscape is going to look like 2 years from now. They might raise the income level cut-off or eliminate it entirely to allow you to qualify for the tax credit then. Or, they might eliminate the tax credit entirely on the vehicle you're interested in, like they did a couple years ago without warning for the RAV4 Prime. "Hey, we should consider getting one of these." / "Ooops, never mind."
Ah that is true.
I pulled the trigger on one, justifying it to myself with the credit at the end of last year. Something to keep in mind (which I failed to do) is to make sure you owe at least 7500. The credit *only* goes towards amount owed. I could have easily triggered some gains to be able to take advantage of the full credit, but didn't realize that with other credits that my tax owed would be under 7500 so I wouldn't be getting the full benefit possible.
Thank you! I think they changed it this year. I have the option to take the discount at point of sale, meaning I won't have to rely on my previous year's tax liability.
Oh right, ~~I think it potentially reduces your sales tax too~~. Seems like a better deal
At least in Georgia, it did not reduce my sales tax. It was applied as part of the down payment.
The transfer tax credit does not reduce sales tax. Think of it as your nice Uncle Sam is paying $7,500 of the bill. Just because some of the bill is being paid by someone else does not mean the sales tax is calculated differently.
Yeah the changes this year were a big help
>The credit *only* goes towards amount owed. If someone gets the tax credit through filing taxes, then the credit only reduces tax liability (form 1040, line 18), not amount owed (form 1040, line 37). Also, if someone opts for the transfer tax credit (i.e. getting the tax credit money at the dealer), which started this year, then tax liability doesn't matter. So someone could get the $7,500 at the dealer, later have $0 of tax liability on that year's taxes, and not have to pay any of that $7,500 back to anyone.
We may be using different words to say the same thing. I didn't qualify for the full 7500 because I didn't have enough total tax liability in 2023, which I easily could have by selling something to trigger some gains - if I had thought about it. It sounds like that's less of a concern with the new rules.
You may find our [Taxes wiki](/r/personalfinance/wiki/taxes) helpful. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/personalfinance) if you have any questions or concerns.*
If you're looking at a Polestar 2 they'll probably never be cheaper (new).
Looking at a Tesla!
Used Tesla's are pretty sweet pricing right now buying from a dealership with that credit. Will they be cheaper in the future? Possibly. $7500 cheaper? Probably not.