Just in case you haven’t heard the news, the budget reconciliation bill eliminated the electric vehicle tax credit for both new and used vehicles.
But wait! There’s still time to act!
The incentive ends on September 30, 2025 and can be taken as a point-of-sale discount, reducing the amount you’d need to finance (and qualify for). The incentive applies to new and used models but has income and price limits as well as other
restrictions. You can check the rules here.
Here’s a few tips for your shopping expeditions:
• September 30th is an important date in car sales. It is not only the end of the month, it is also the end of the quarter. It is the second-best time to buy a new vehicle (the best being the last day of the dealership’s calendar year). Salespeople will be scrambling to get that last deal that possibly gets them into higher earning percentages, via sales performance bonuses or multipliers, or saves them from being fired, if their sales performance is sub-par. Managers will be scrambling for exactly the same reason. Managers are compensated on achieving or exceeding OEM sales targets and fired for low performance. On the last day of the quarter, they won’t want a single deal to fall through the cracks. The same is true of the ownership/officers of the dealership. This means you may have a better chance of negotiating a great deal on your next vehicle, if you can be patient. Know your desired (realistic) price before setting foot in the dealership. Be prepared to not buy the car if you can’t get the price you need. I know it seems dumb, but I’ve heard so many stories of salespeople or managers running after a customer, who is getting into their car to leave, to pitch a lower price.
• When I sold cars for a living, I was surprised how few people understand how the salesperson is compensated. Salespeople are paid when they sell a car. If they do not sell a car, they are not paid. For this reason, do not grab the first salesperson available each time you arrive at your dealer of choice. That sets up a “split deal,” where the sales commission is split between both salespeople. If the salesperson knows they’re going to get half their usual commission, do you think they’ll give much of a discount, during negotiations? Don’t even ask a salesperson a question, if they’re not the salesperson you’re working with. Doing so will be the quickest to have salespeople ignore you and time is too short for that.
• Talk to your bank or credit union ahead of time to see what sort of interest rate you can get from someone who knows you instead of a Finance department employee who has probably never seen you before (and probably never will again, since EVs last a long time and careers at dealerships typically don’t).
• If you’re going to pay cash for the new vehicle, do not mention that before you’ve negotiated the price. Salespeople, managers and dealerships get part of their pay from financing vehicle purchases. If they know they’re not going to make money on the financing side of things, they’re less likely to be flexible on the price of the vehicle.
• You do not have time to order a vehicle. If the vehicle is not in your possession by the end of the day on September 30th, you do not get the incentive. Pure EV manufacturers do not typically negotiate on price, but many do offer discounts, especially on existing inventory, at the end of the month/quarter/year. Search the website of the manufacturer you prefer for existing inventory, available for purchase. If the vehicles were used for test drives, they may have a few hundred to over 1,000 miles on the odometer. As long as the vehicle was never titled, it should qualify for the incentives. I bought my most recent EV from inventory, at the end of the year, and saved $2,000. It
had ten miles on the odometer.
• Although you don’t have time to order, you can put the salesperson to work for you, locating a vehicle with specific options you want. These are called “dealer trades.” The salesperson can search for vehicles they sell across all dealers within a specific distance range. If they find the options/colors/etc you want, they can initiate a trade with the other dealer. The other dealer selects the vehicle they want from your dealer’s inventory and a service drives one vehicle to the other dealer and then drives your new vehicle back to your dealer. This will result in miles being added to the odometer, but does not affect the status of the vehicle with regards to the incentive. This take a little time to set up, so don’t ask for a dealer trade in the last few days of the month. You won’t get it and will have wasted your opportunity. Start the search a week before the end of the month.
• Don’t expect to get questions answered at the end of the month. Commissioned salespeople are paid when they sell a car. Period. When they’re scrambling on the last day(s) of the quarter, they are not interested in explaining how much your electric bill will go up if you buy an EV or how regenerative braking works. They are interested in one thing only: signatures on sales contracts. If you still have questions about going electric, there’s a great place to get correct answers. Get your information from people who have zero financial reason to mislead you: the Facebook owner’s group for the vehicle in which you’re interested. EV drivers typically love their EV and talking about
it. Just search in Facebook for a group, like Chevy Bolt EV and EUV Owners Group, Mustang Mach-E Owners, Kia EV6/EV9 – USA/Canada Owners, etc. These and other group/pages on Facebook are full of people just dying to tell you about their car. They’ll tell you the good, bad and ugly, but that’s what you need right now: the unvarnished truth regarding a big financial decision. Those Facebook groups can also recommend salespeople, service people and dealerships that understand EVs. Take their advice and support dealerships who will be there to support you.
• Don’t overspend on range. If you’re looking at an EV for your daily commute, but would never consider driving it across country, don’t pay for the “extended range” versions. Batteries are the most expensive part of an EV. Most EVs today have at least 200 miles of range. If your commute is under 40 miles per day and you can charge at home, you can recoup the charge for that commute overnight, with just a 120V outlet & the free “Level 1” charger that often is included with the car. If you can’t charge at home, 200 miles of range will last 4 or 5 days, making charging at a public charger similar to filling an ICE car with gasoline, as far as how often you “fill up.” It takes longer, but if there’s a restaurant or grocery story nearby, you can have a meal or do your weekly shopping while your car charges and the charge will usually be complete before your task is. Multitasking!
• Charging speed is important if you take lots of road trips or can’t charge at home. Charging speed is controlled by the EV. The EV tells the charger how fast it can accept electricity. The charger supplies it at that rate (or if lower, the charger’s maximum rate). Charge speed is given in kilowatts (kW). For road trips, 25 kW or 50kW is very slow. The charger is smart enough that it slows down the charging rate as the battery fills above 80% of its capacity. This is done to be gentle on the battery, extending it useful life. On a road trip, the only time you’ll charge to 100% is overnight at a hotel’s slower, gentler, Level 2 charger (which is usually free to use). When using a DC fast charger (DCFC or Level 3), it’s much more efficient to fill to 80% and hit the road than it is to wait for that last 20% to be refilled. All manufacturers have a specification on the speed of recharging the battery. It is usually given as recharging from 0% to 80%. Look this number up to make sure the EV you select will work for your driving habits. A 2020 Chevy Bolt EV charges to 80% in 2 hours while a 2023 Tesla Model Y Long Range charges in about 18 minutes. The Bolt EV is great as a commuter car but there are now better choices for road trips. (P.S. The next Bolt EV is predicted to have much faster charging.)
• Don’t overspend on a charger. The vast majority of Americans commute less than 40 miles per day. As mentioned before, a 120V outlet is all that’s needed to support that commute. Most EVs include a 120V charger as standard equipment. I recommend replacing the outlet with a heavy duty 120V outlet, to prevent overheating, but that all you’d probably need. If the circuits located near where you want to charge already have items plugged in, you may want to install a new 120V circuit and outlet. If your commute is longer or you like to take off on weekend road trips, you may want to invest in a 240V of “Level 2” charger to charge your EV about 6 times faster than a 120V charger. I recommend a portable charger, so you can still grab a charge if all you can find are campgrounds, trailer parks and RV parks.
Here are some things you may not have considered in your EV wish list:
• You may want to be able to use your vehicle as a camper. The most important question to see if your EV has this is: Does the EV have a “utility” or “camp” mode? These modes allow you to run the EV’s heater or air conditioner while you’re sleeping in the car. Many Tesla, Kia and Hyundai EVs have this capability. Popular EVs even have mattresses available that are specifically tailored to fit the vehicle. Another use for this feature is disaster recovery. If the power goes off at your house due to storms, earthquakes or fires, your EV can become your hotel room, allowing you to sleep comfortably.
• V2X capability: V2X means that the car can send out electricity to power other items. It could be a wall outlet in the car that looks just like a wall outlet in your house, that allows you to keep a freezer, refrigerator, computer & wifi or television on by plugging it into the car’s outlet. In larger vehicles, like pickups, the outlet might be a 240V outlet for running higher electricity demand items or charging things like chainsaws. When the EV’s battery gets low, you’ll have enough range to drive to an area with electric service and recharge your EV and bring that energy back to your home. The next step up in V2X is vehicle-to-home (V2H) and today, there are EVs that can power an entire home. This requires a bidirectional charger, which is considerably more expensive, but if you’re in an area plagued by power outages, it could be a great option. A generator can do the same thing, but it cannot drive to another location to be refueled. At the high end of V2X, is Vehicle-to-Grid (V2G), which can send the electricity from your EV to the electric grid, earning income for you and stabilizing the grid when it’s under strain.
• Autonomous driving is the next big thing and some vehicles (GM and Ford) have specific routes that allow hands-free driving. Others, like Tesla, use vision systems and are theoretically able to navigate roads that are unmapped. I have used autonomous features and for long road trips, they are a huge advantage. You’ll arrive less fatigued and you’ll have been able to enjoy the scenery along the way instead of just the brake lights of the vehicle right in front of of you.
So there’s my advice. You have about 2 months to select a target EV, get your questions answered, find that EV and make the deal, if you want the EV incentive.
Best wishes and if you have questions, you know how to reach me.
– Buzz Smith