If you’re thinking about buying a new electric vehicle, it takes less than three months to bundle tax credits from both Joe Biden and Donald Trump administrations.
Think about how each president’s signature law can help you save money on new cars.
◾ 2022 Inflation Reduction Method: Biden-era incentives offer tax credits up to $7,500 for new, plug-in EVs, or fuel-celled electric vehicles. Trump’s massive tax and spending policy bill will close this credit on September 30th.
◾ “Big Beautiful Building”: Trump’s new law offers an annual tax credit of up to $10,000 on the profits of new vehicle loans, as long as it is assembled in the US for less than £14,000. This covers purchases made between 2025 and 2028.
How long will Biden and Trump tax credits last for new cars?
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How to stack automobile tax credits
Here are some ways you can save money on EVs by combining Biden and Trump tax credits over the next four years:
A new EV may not be the best investment
Certainly, this strategy may not be the best way to grow your dollars. But you’re probably set to buy a new EV with the latest gadgets and upgrades.
According to the Kelley Blue Book, the average price paid for this year’s new EV was $57,734. Even with a $7,500 tax credit, the gas-powered car’s EV premium is around $1,500. According to Kelley Blue Book, looking at the cost of fuel over five years, mathematics tips in favor of EVS: a gas-powered amount and $4,295, it’s $9,490.
According to the Kelley Blue Book, if you don’t smell like a new car, you can use the average list price of the EVS about $20,000 less than the new model. You can also get a $4,000 tax credit from Biden’s law on used EVs, which doesn’t qualify for the Trump tax credit.
Some additional fine prints to consider whether to use any of these tax credits
◾ Big beautiful bill: Auto loan tax credits are incremental in increments of income between $100,000 and $150,000 by an individual and between $200,000 and $250,000 if jointly filed. It cannot be used for fleet purchases, commercial vehicles, or leasing.
◾Inflation reduction method: To use EV credit, you will need to purchase a North American assembled car for your own use. Your income should be under $150,000 for individuals and under $300,000 for those who are submitting jointly.
