No Tax Credit For An EV? Try Leasing.
Electric cars are becoming increasingly popular, with more and more people making the switch from traditional fuel-powered vehicles to electric ones. But while there are many benefits to owning an EV, the cost can be prohibitive for some people. Fortunately, there are other ways of getting around this issue, namely leasing. In this blog post, we’ll explore the different options available when it comes to leasing an EV and how you may be able to save money in the process — even if you don’t qualify for a tax credit.
Electric vehicles are becoming more popular
Electric vehicles (EVs) are becoming more popular for a number of reasons. They’re cheaper to operate and maintain than gasoline cars, they emit no pollutants, and they have a smaller environmental impact than traditional cars.
EVs are also becoming more affordable as prices continue to drop and more models become available. The federal government offers a tax credit of up to $7,500 for the purchase of an EV, which can make them even more affordable.
If you’re considering leasing an EV instead of buying one, there are a few things you should know. First, the monthly payments will be lower than if you were to buy an EV outright. However, you won’t be able to take advantage of the federal tax credit since it only applies to purchases.
Second, most leases require you to put money down upfront (known as a security deposit), which can range from a few hundred dollars to several thousand dollars. You’ll also be responsible for any damages that occur during the lease term, so it’s important to read the fine print carefully before signing anything.
Finally, keep in mind that leases typically last for two or three years, so you’ll need to decide whether you want to keep the car at the end of the lease or trade it in for a new one.
Tax credits for EVs are being phased out
The $7,500 federal tax credit for electric vehicles is being phased out. The credit will be cut in half to $3,750 for vehicles delivered from January 1, 2020 to June 30, 2020. It will then be cut again to $1,875 for vehicles delivered from July 1, 2020 to December 31, 2020. After that, the credit will be eliminated entirely.
This phase-out has been known since late 2017 when Tesla hit the 200,000 delivery mark in the US. At that point, the full $7,500 per vehicle credit began to be phased out over a period of 12 months. For Tesla and other manufacturers like GM who have also recently passed the 200k milestone (and are thus affected by the phase-out), this has meant reduced subsidies at a time when competition from traditional automakers is increasing.
The good news is that there are still plenty of ways to save money on an EV purchase or lease – even without the tax credit. Many states offer their own incentives, ranging from rebates to HOV lane access. And as battery technology continues to improve and costs come down, we can expect EVs to become increasingly affordable even without government assistance.
The Benefits of Leasing an EV
Electric vehicles (EVs) have many advantages over traditional gasoline-powered cars. They’re cheaper to operate and maintain, they emit no pollutants, and they’re much quieter. But one of the biggest benefits of owning an EV is that you may be eligible for significant tax credits and other incentives.
The federal government offers a tax credit of up to $7,500 for the purchase of a new EV. Many states also offer additional incentives, including rebates, free parking, and access to high-occupancy vehicle lanes. And if you lease an EV, you may be able to take advantage of even more generous incentives.
For example, in California, leases on EVs are exempt from the state’s sales tax. And in New York, there’s a program called “Drive Clean Rebate” that offers up to $2,000 back on the purchase or lease of a new EV.
So if you’re thinking about making the switch to an electric car, don’t let the lack of a federal tax credit deter you. There are still plenty of good reasons to lease an EV – and you may be able to save money in the process.