4 Ways To Make Sure You Are Getting the Best Price on a Used EV
Written by
Yaël Bizouati-Kennedy
Edited by
Nicholas Morine
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Recent data indicates 2024 might be the year to buy a used electric vehicle (EV), as a conflation of factors could make this option very attractive. First and foremost, the EV tax credit — which runs up to $4,000 for buyers of qualified, previously owned EVs.
And as of Jan. 1, 2024, buyers can choose to transfer their new or used clean vehicle tax credit to a registered dealer in exchange for an equivalent reduction in the purchase price of the vehicle, effectively instantly lowering the price of the vehicle, according to the Internal Revenue Service (IRS).
A Great Many Used EVs Hitting the Market
In addition, a slew of used EVs are hitting the market, as Hertz recently announced it is putting 20,000 Teslas and other EVs up for sale — including Tesla Model 3s from $14,000, according to EV finance platform EV Life.
Yet, while there is a surge in used EVs sales, a very small percentage of used car dealers are registered to transfer the $4,000 credit. Indeed, a report by Recurrent found that Used EV sales volume in 2024 will increase by roughly 100% over 2022 and 40% over 2023. Meanwhile, only 7% of U.S. car dealerships have taken steps to register for so-called “time-of-sale rebates,” which could make it difficult and time-consuming for buyers to capture the instant savings.
Peter Glenn, founder and co-CEO of EV Life, noted that it was hard to find a used Tesla or other used EV for under $25,000 until Hertz’s announcement.
“However, if you’re looking to buy a used EV, there are still challenges still to overcome like determining whether you qualify for the $4,000 tax credit based on your adjusted gross income, and what other state or local rebates could you qualify for,” he said. “Also, with a low number of used EV dealers registered with the IRS, securing the $4,000 tax credit will not be as straightforward as receiving credits for a new EV purchase.”
How To Make Sure You Get the Best Price on a Used EV
According to Glenn, when it comes to getting the best price on an EV, there’s a certain calculus to consider around making buying decisions and several steps you should take.
Step 1: Determine if you financially qualify for a used EV tax credit
If you’re interested in getting a tax credit, check your income requirements first, he said.
Your adjusted gross income (AGI) must not exceed $150,000 for joint filers, and $75,000 for all other filers, according to the IRS.
“If you’re not income qualified, then you don’t need to factor tax credits in your search,” said Glenn. “A new EV might be better.”
Step 2: Find a qualified EV under $25,000
If you’re financially qualified for the $4,000 used EV tax credit, you now need to find a vehicle that also qualifies, he added. The vehicle needs to be sold for under $25,000, be at least two years old, and also not have been previously sold before since Jan. 1, 2023, according to the IRS.
Step 3: Find used EVs at dealerships registered with the IRS to pass through the tax credit upfront at point of sale
This may be the toughest step as the majority of used car dealerships have not registered with the IRS yet, according to Glenn. However, there are a good number of dealerships that do pass the credit.
Some companies, including EV Life, are starting to facilitate this process, as they give customers who pre-qualify for financing a validated list of IRS-registered dealers.
Step 4: Don’t forget to look for state and local rebates
In California, for example, large utilities such as PG&E and SoCalEdison offer rebates worth $1,000 to $4,000 based on your income, said Glenn.
“There’s a Clean Cars For All program in California where you can get up to $12,000 in grants for trading in an older polluting gas car for an EV,” he added. “When EV shoppers pre-qualify for Used EV Financing with EV Life, we not only pre-qualify you for the best rates, our tech platform scans over 500 different tax credits, rebates, and other incentives so you don’t leave any money on the table.”
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