Affordable Used EVs - Driven by Tax Credits and Rebates
For many potential first-time EV buyers, the initial cost of a new EV in today’s market can be prohibitive. But much like the general auto market, used EVs offer much greater affordability. But thanks to new tax credits and state programs, the take home costs for used EVs can be even lower, making them even more accessible to buyers from a wide range of incomes. Let’s take a look at how these credits and rebates are creating affordable options and highlight some examples from real listings we ran through the Incentivize Rebate Calculator.
Federal - Clean Vehicle Tax Credit
The IRA’s Used Clean Vehicle Tax Credit allows buyers to deduct a significant amount from the purchase price of used EVs. Here’s how it works: if you purchase a used EV with a sale price of $25,000 or less, you are likely to be eligible for a tax credit equal to 30% of the sale price, up to a maximum credit of $4,000. It’s important to note that the sale price includes all dealer-imposed costs or fees not required by law but does not include costs or fees required by law, such as taxes or title and registration fees. This credit can be really useful for first time EV buyers who are seeking an affordable entry point into driving electric vehicles.
To qualify, your modified adjusted gross income (AGI) must not exceed:
$150,000 for married filing jointly or a surviving spouse
$112,500 for heads of households
$75,000 for all other filers
State Rebates
Many states give additional rebates for used EV purchases, enabling buyers to stack incentives. For example, in Rhode Island, where Incentivize is based, EV incentives are offered through its DRIVE EV Rebate program. This program provides rebates of up to $1,000 for the purchase or lease of used battery electric vehicles. For those who qualify based on income, the DRIVE+ program offers an additional rebate of up to $1,500.
So, let’s say you meet these requirements, which used EVs could you potentially take home and how affordable would they be?
Example 1: 2022 Tesla Model 3
One of the standout examples is the 2022 Tesla Model 3. A search on Carvana revealed a number of options that qualify for the credit. We chose one with 71,000 miles priced at $24,081. After adding a $390 shipping charge, the total comes to $24,471. But after applying the federal tax credit and Rhode Island’s regular DRIVE EV $1,000 rebate we’re now down to $19,081 for a 2 year old Tesla with a range of 272 miles. Even with an additional $1,873 for title, tax, and registration, the final cost remains an attractive $20,954. This pricing puts a high-quality, high-range EV with very sophisticated technology and rapid acceleration within reach for many more buyers.
Example 2: 2015 Nissan Leaf
At the more affordable end of the spectrum, Carvana lists a 2015 Nissan Leaf with only 41,000 miles for $9,990. After including a $1,290 shipping charge, the price is $11,280. Combining the federal tax credit with Rhode Island’s DRIVE EV+ Rebate can make used EVs even more affordable. Applying the full income qualified $2,500 DRIVE+ discount and the federal tax credit brings the price down to $5,396. Adding approximately $950 for tax, title, and registration results in a final cost of around $6,346. With 84 miles of range this is a very affordable local driver with no need for expensive gasoline, that can effectively be drip charged at home!
Example 3: 2013 Nissan Leaf
Can we get an even better deal on a Leaf? Let’s look at Green Wave Electric Vehicles in New Hampshire. This regional used EV dealership is offering a 2013 Nissan Leaf with only 35,000 miles for $6,490. After the $1,947 federal tax credit of 30%, the price drops to $4,543 with no shipping fees and no other rebates. With an expected range of 69-74 miles, this is an incredibly budget-friendly option for first-time buyers looking to enter the EV market.
You can see the Clean Vehicle Tax Credit for used EVs, combined with state programs like Rhode Island’s DRIVE EV Rebate, is a game-changer for first-time buyers. By significantly reducing the cost, these incentives make it possible for more people to afford high-quality, reliable electric vehicles. Whether you’re considering a newer model like the Tesla Model 3 or a more budget-friendly option like the Nissan Leaf, there are affordable choices available that fit a variety of needs and budgets. Help spread the word about just how affordable a used EV can be!
