Used EVs Could Be Eligible For Tax Credits In The Future

One of the ways that legislators have been trying for several years to encourage consumers to buy electric vehicles is to give them significant tax rebates. For many current electric vehicles, you can get a $7500 federal tax credit. The caveat has been that tax credit was only eligible for people buying new electric vehicles.

As batteries age, used electric vehicles are even less attractive than brand-new EVs to many consumers. To encourage people to buy used electric vehicles, legislators are now proposing a new $2500 federal tax credit for used vehicles. The tax credit for used vehicles is part of the "Affordable EVs for Working Families Act." That act is a bill currently being considered by legislators.

The credit would be available on used electric vehicles at least two years old that cost less than $25,000. It would be structured for both EVs and PHEVs, just as the current tax credit is. The credit would apply to dealers, and people would be allowed one credit every three years.

Eligibility requirements are also phased down for buyers with adjusted gross incomes exceeding $75,000 for an individual or $150,000 for joint filers. If the federal tax credit on used electric vehicles or plug-in hybrid electric vehicles is passed into law, it could certainly make used vehicles of the type more appealing.

There is some fear that dealers may mark up prices for electric vehicles or plug-in hybrid vehicles if the $2500 tax credit gets passed. Automotive dealers certainly markup prices on popular vehicles all the time, with some hard-to-find new vehicles getting market adjustments at thousands to the price. At this time, the new rebate is part of a bill that has yet to be approved.