What are your tips and tricks for electric vehicle purchases?
Each month, Andy’s answering a question that he wishes more clients would ask him, addressing timely topics that he thinks are worthy of the spotlight.
I’m thinking of going electric. What do I need to know?
We ALL know that gas prices are shockingly high right now. It’s enough to make anyone pause to consider an electric vehicle for their next automotive choice.
Add the fact that there are still a number of $7,500 tax credits for electric models up for grabs and it starts to feel like a no-brainer. But there are some important things you need to know if you’re looking to make the switch.
1. Tax credits can be applied to electric vehicle purchases, not leases.
Generally speaking, I’m a fan of buying over leasing anyways, though there are some circumstances where leasing might make sense. This isn’t one of them. Not only do you forego equity, you’re also passing on an automatic $7,500 discount.
2. Credits are distributed by the manufacturer, so do your research once you’re ready to buy.
The government divided up the available credits to all of the car manufacturers producing electric vehicles. It’s then up to each manufacturer to pass these out, but once they’re gone, they’re gone. The amount also starts to decrease as the manufacturer hits certain sales milestones. So, as you’re shopping, make sure you’re going with a brand that is still able to distribute the maximum credit amount.
If you have your eye on a certain model, but that manufacturer is out of credits, do your research and look for a comparable model. Some of your choices may be more similar than you think.
Take Toyota and Subaru for example: The Subaru Solterra is the first fully electric vehicle for the Japanese brand, but it’s almost exactly the same car as Toyota’s BZ4X. It’s even made on the same assembly line! And while Toyota’s credits are dwindling, Subaru still has plenty to spare.
3. How you plan to use your electric car makes a difference.
Despite the many reasons you may be considering going electric, it’s important to know that charging stations are very expensive. You can circumvent this need if you’re primarily charging your car at home and using it for short distances: commuting to and from work, running to the grocery store, picking up the kids from soccer practice. But if you regularly travel long distances, or are an avid road-tripper, it may not be the best choice (at least for now, while charging stations remain somewhat rare).
For a comprehensive list of qualified plug-in electric drive motor vehicles, check out the IRS’s Index of Manufacturers.