Car buyers have had a tough go looking for their next road warrior. Inventories are low due to supply-chain troubles, which means prices for new and used cars have skyrocketed thanks to increased demand. If you add in the gas price hikes that dominated summer news headlines and passage of the EV-friendly Inflation Reduction Act, you now have a cacophony of issues to consider when searching for a new vehicle. And that includes whether or not an electric vehicle is in your near future.
The Inflation Reduction Act extends the tax credit on new electric vehicles, including plug-in hybrids, until December 2032. The credit is worth up to $7,500, providing a hefty incentive for consumers to spring for an EV. And now used EVs that are at least two years old are eligible for a credit, too-up to $4,000 or 30% of the price of the vehicle, whichever is less. (Both new and used EVs are subject to price caps; see below.)
The tax credit for electric chargers has also been brought back from the dead—with revisions—and lasts until December 2032 as well.
The new rules are a sweeping change. They eliminate the eligible-vehicle cap placed on automakers on one hand while adding North American assembly-material sourcing requirements on the other. Previously, a vehicle that qualified for the tax credit would no longer be eligible if the manufacturer had hit the model’s 200,000-car limit. That is no longer the case for vehicles bought in 2023. However, there are special requirements concerning who qualifies for the credits, as well as what type of vehicles are eligible.
FOSSIL FUELED
Will the Gas Engine Soon Be Obsolete?
This story is from the December 2022 edition of Kiplinger's Personal Finance.
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This story is from the December 2022 edition of Kiplinger's Personal Finance.
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