A $4,000 Incentive in Play for Affordable Used EVs
Used EV prices are an excellent option for first-time buyers, and buyers can qualify for a $4,000 tax credit if the vehicle is under $25,000.
By Paul Bordenkircher,
Paul Bordenkircher is a guest author at Plugged In EV and is a member of the Las Vegas EVA Chapter and Nevada Electric Vehicle Association.
The average transaction price (ATP) in March of 2023 for all new cars was $48,000, according to Kelly Blue Book (KBB). This 2023 ATP average includes luxury, gas, and electric vehicles, and a new Toyota Camry will start in the neighborhood of $40,000+ in 2023.
Many car buyers in 2023 are searching for lower prices – sub $20,000 or $15,000 – so an affordable used electric vehicle (EV) might be the answer. The good news is that used car prices have been trending downward since 2022:
Cox Automotive says used EV prices are down 4.4% from April 2022
And the analyst also reported a 3% price decline in April 2023.
A Certified Pre-Owned, Affordable Used EV Vehicle
I recommend buying a certified pre-owned vehicle because it includes an extended warranty and takes the guesswork out of buying a reliable car. Whether the vehicle is powered by gasoline or electricity, insist on it when car shopping.
To give you an idea of the kind of savings you can expect, I bought a used 2016 Chevy Spark EV, which sold for about $27,000 when it was new. When I bought this car in 2019 (just three years later), it could be purchased as low as $8,000, but was typically priced between  $10k and $12k.
Moreover, a federal tax credit of $4,000 is available for used EVs. Qualifications include that the vehicle is at least two years old, sold by a dealer, and is under $25,000.
Of course, the pandemic turned just about everything on its head, including car prices. Before you commit, check the latest promotions and lease deals and refer to any changes in the IRS rules regarding rebates and state-based incentives.
Moreover, a federal tax credit of $4,000 is available for used EVs. Qualifications include that the vehicle is at least two years old, sold by a dealer, and is under $25,000.
Electric Vehicle’s Total Cost of OwnershipÂ
There’s more good news. The total cost of ownership with an EV is well below that of a gasoline-powered car. When drivers factor in the costs for maintenance and repairs, EVs are the clear winner and can save drivers thousands. That’s because there are far fewer moving parts to wear or break down.
Also, electricity for powering your car is far cheaper than gasoline. Special programs with your local electric utility - often called Time of Use - may save you even more.
Sidebar | Real World Buying of a Used EV
In February 2023, a Tesla Owners Worldwide group member shared his purchase of a used Model 3 Long Range with 113K miles on the odometer. He said that he receives 270 miles on a 100% full charge and could drive 220 miles on 80% at 75 - 80 mph. Total price was $24,777 with $300 sales tax and $800 dealer fees. The car was $24,777.
Miscellaneous used EV purchase comments from the group thread:
I did the same thing here in B.C. Canada. Bought a higher mileage 140,000 km Long Range RWD 2019 for $26k US converted. Still has power train warranty to 196,000km. Drives amazing.
I can't speak for Austin, but I went through this process a couple weeks ago.
I made sure to add a credit card to the app at least a week before I went (also to Chicago) to pick it up. I was more worried about the ownership transfer that has to happen before one can Supercharge. Luckily, that only took a couple minutes after I scanned my ID and sales document.
I thought about that too lmao but it can't be claimed if it's a private sale. But if everyone is a car dealer it may work. The same person can't claim it more than once in three years though.
I was thrilled with my used Chevy Spark EV, and I am now in my second, a 2018 Kia Soul EV. If you’re considering getting your first EV, consider buying a used one.Â
How to Qualify for the Used EV Tax Credit
You may qualify for a credit for buying a previously owned, qualified plug-in electric vehicle (EV) or fuel cell vehicle (FCV), including cars and light trucks, under Internal Revenue Code Section 25E. For qualifying EVs, visit fueleconomy.gov
To qualify, you must:
Be an individual who bought the vehicle for use and not for resale
Not be the original owner
Not be claimed as a dependent on another person’s tax return
Not have claimed another used clean vehicle credit in the 3 years before the purchase date
In addition, your modified adjusted gross income (AGI) may not exceed:
$150,000 for married filing jointly or a surviving spouse
$112,500 for heads of households
$75,000 for all other filers
And the sale qualifies only if:
You buy the vehicle from a dealer
For qualified used EVs, the dealer reports required information to you at the time of sale and to the IRS.
About the Author: Paul Bordenkircher has long been an enthusiast for alternative energy and solutions. As head of Mesa Sand Media, he applies his talents in media relations and marketing to extend the message of the NVEVA.