Can I buy 2 EVs in the same year and get the fed tax credit?

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Ital74

Well-known member
Joined
Feb 16, 2022
Messages
56
Location
Connecticut
Hi All,
simple question but I can't seem to find the answer.
Can I buy two EVs in the same year and get the $7,500 fed tax credit?
I understand i would have to pay at least 15k in taxes to get it and i have that part more than covered.... lol

Thank you
 
Ital74 said:
Hi All,
simple question but I can't seem to find the answer.
Can I buy two EVs in the same year and get the $7,500 fed tax credit?
I understand i would have to pay at least 15k in taxes to get it and i have that part more than covered.... lol

Thank you

For every *new* Leaf you can.
 
The Gov does not limit the number of EVs, and the tax credit is $7500 per new EV
BUT, the total credit will never be greater than your tax liability (line 22 of Form 1040) not including the EV credit(s)

Tax liability may not be (and typically is not) the same thing as tax paid. It has a very specific meaning to the IRS, and few people talk IRS-ese.

My advice:
Fill out the 1040 through line 22 as thoroughly as you can including your proposed EV purchases on Schedule 3 to see where you stand. If line 22 is > 0 then you are able to take the maximum EV credit(s)
 
If your tax liability is too small to get much of the $7500 credit when buying, then find out which manufacturers are passing some or even all of it along when you lease an EV from them. Since the manufacturer's leasing subsidiary is the entity actually buying the car, the credit is always available in full to them. It may make sense for that reason to lease an EV from them, then buy it for the residual value when the lease ends, or even sooner in some cases.
 
^^

YES, although in practice this approach may have extra costs
Leases often carry fees that are not in a direct sale,
The car price may not be the same as a direct sale,
You pay interest.



-----
In the past there used to be talk about a strategy where a person would convert IRA savings into Roth to have a greater tax liability. Lots of chatter, although I don't think I ever read of it actually being done and I don't know if it is still allowed. If the extra taxable income is taxed in a higher tax bracket then the credit is effectively reduced . And just by virtue of OP being here asking this question pretty much means he would be well advised to pay for a CPA to be sure mistakes were not made.
 
Leases deals I've seen recently didn't look very favorable. High fees and unless used car prices fall you would lose a lot by not buying the car at end of lease.
 
Using a lease to buy an EV is like any other financial deal: you have to shop for a good one. One thing that doesn't get mentioned enough is that while a lease usually has a few more fees, they buy you the rather large advantage of getting to drive a car for several years before you have to commit to buying or not buying it, thus giving you more choice. My housemate will likely buy her SV+, or if she doesn't want to spend the $20k to do so, she can buy my SV40 for about $6k less. She doesn't really need a 200 mile EV any more than I do, but she'll have that choice available, which wouldn't be the case if she had bought the SV+ outright.
 
If things don't change, you would lose thousands by not buying at end of lease and then selling (or trading in). Along with fees for leasing.

The option to not own at end of lease isn't very valuable right now, at least until the used car market drops. Which will likely take longer than the lease period. Of course, the future is unknown and the whole economy along with the used car market might tank.
 
If things don't change, you would lose thousands by not buying at end of lease and then selling (or trading in). Along with fees for leasing.

Either the used market stays hot and I can sell my leased car in 3 years, or it cools and I'll have just gotten a good lease deal while others were overpaying to buy cars. Either way I'm fine. All that really matters is whether or not you're happy in 3 or 4 years.
 
Lease vs own is a long lasting debate. From 2016: https://www.nerdwallet.com/article/loans/auto-loans/leasing-buying-costs

Leasing is usually more expensive. Usually that is, there are times when manufacturers discount leases to move cars and leasing can be cheaper, not very likely today. Right now, leases are an extra profit item for auto dealers, common now to mark up origination fees and money factor for extra profit. If you buy out a lease right away you are likely to find your net cost is one to two thousand dollars higher than just buying the car. Can be more in some states where you are double sales taxed on such a transaction.

Leasing gives tax advantages to some. This can outweigh other costs of leasing.

Having an option to just return the car at end of lease can be very valuable if used car prices are low. Not very likely today. A lease is better than an upside down loan, or negative equity.


On the first point, the cheapest 2014 LEAF deal I saw the paperwork for was a lease. I bought my 2014 LEAF, and the offered lease when I bought wasn't anywhere close. If I was offered that lease I would have taken it.

You need to look carefully at each deal, and consider your situation. The world changes every day. Right now, lease deals are worse than average. Next month, next year, who really knows? And without knowing you, who really knows?
 
^^ This is a good post. It gets to the important point that most people who favor leases are trying defend their own decisions. And they may have been right, but that does not extend to others with different situations and most importantly, different priorities.

Lease advocates usually leave unsaid that they want a new car every 2 - 3 years, and they are willing to spend the time and enjoy car shopping.

---
Personally, I think the main reason I have never leased is that I don't want to be on a car swap schedule.
 
Everyone has answered already. The answer is YES you can claim tax credit on multiple cars as long as your tax liability is sufficient.

Here’s the IRS Form that’s required to be completed with your return to calculate the tentative credit. https://www.irs.gov/pub/irs-pdf/f8936.pdf Notice that’s there is a column for Vehicle 1 and another for Vehicle 2 with a note that if you have more that 2 vehicles for tentative credit fill out additional form 8936s.
 
SageBrush said:
^^ This is a good post. It gets to the important point that most people who favor leases are trying defend their own decisions. And they may have been right, but that does not extend to others with different situations and most importantly, different priorities.

Lease advocates usually leave unsaid that they want a new car every 2 - 3 years, and they are willing to spend the time and enjoy car shopping.

---
Personally, I think the main reason I have never leased is that I don't want to be on a car swap schedule.

Since my first new car in 1970 I’ve bought 62 new cars and leased only one. The only reason I leased that one (Acura RL) was because the terms were too good to not lease. The money factor was extremely low, the Cap cost was very low and the residual was very high. At the end of the lease the retail value of the car was $5,000 less than the residual. I tried to buy the car at the retail price but Acura wasn’t willing. They put it on auction and got $5000 less than the residual. Acura got hosed on leased RLs that year.

I didn’t like that I was locked into keeping it until the lease expired. If I were to terminate the lease early it would have cost me too much to get out if it. The actual cash value of the car was well below the pay off.
 
Lease advocates usually leave unsaid that they want a new car every 2 - 3 years, and they are willing to spend the time and enjoy car shopping.

Stop telling people what they think. Personally, I HATE car shopping, and having kept an '86 Civic for 23 years, and having only bought that one car new between 1978 and 2013, I think it's clear that I also have no fetish for new cars.
 
LeftieBiker said:
Lease advocates usually leave unsaid that they want a new car every 2 - 3 years, and they are willing to spend the time and enjoy car shopping.

Stop telling people what they think. / Personally, I HATE car shopping, and having kept an '86 Civic for 23 years, and having only bought that one car new between 1978 and 2013, I think it's clear that I also have no fetish for new cars.

Well we are opposites :). So far I’ve bought 62 new cars. Last year was the first year in many that I didn’t buy a new car. This year I’m making up for it. I have 3 Ford Super Duty trucks on order. A F-350 Platinum SRW, a F-450 Platinum and a F-450 King Ranch. That’s $270,000 worth of vehicles. All were ordered with no deposit and no commitment. In fact one dealer gave me $150 cash just to order and they hope I won’t pick it up when it comes in

My plan is to trade my 2020 F350 in on one and flip the other 2. . They were all ordered under invoice and these new trucks are selling for $5000-$10,000 over sticker if they are on the lot.

The only vehicle transaction I made last year was to sell a 2019 F-150 for $24,000 than I paid for it when I purchased it new.
 
LeftieBiker said:
Lease advocates usually leave unsaid that they want a new car every 2 - 3 years, and they are willing to spend the time and enjoy car shopping.

Stop telling people what they think. Personally, I HATE car shopping, and having kept an '86 Civic for 23 years, and having only bought that one car new between 1978 and 2013, I think it's clear that I also have no fetish for new cars.

I am describing a group. You are a special snowflake.
 
You are describing a straw "group" based on whatever stereotypes you happen to believe. Some people do want a new car often. That does not magically translate to "lease advocates" as a group wanting new cars often - at least not EV lease advocates. There seems to be something of a shortage of non-affluent people here, so there is a certain lack of understanding about why people with modest means may want to use a lease to acquire a $30k+ vehicle. Talking about extra fees as a deal breaker compared to buying a car outright or with a large loan indicates this.
 
LeftieBiker said:
You are describing a straw "group" based on whatever stereotypes you happen to believe.

Consumer reports comes to the same conclusions I do

https://www.consumerreports.org/buying-a-car/leasing-vs-buying-a-new-car-a9135602164/#:~:text=On%20the%20surface%2C%20leasing%20can,lease%20ends%E2%80%94plus%20finance%20charges.

They summarize
If your goal is to have low monthly payments and drive a new vehicle every few years with little hassle, then leasing may be worth the additional cost.

Face it -- you live above your means by hocking your future income. And you pay for the 'privilege.' Only a few explanations explain the behavior:

1. The person is stupid. I think this is uncommon but surely not rare, and it is true that most of these lease people cannot really say just how much extra they are paying over time.

2. They want to swap cars every 2 - 3 years. VERY common motivation

3. They are locked into a monthly payment existence. VERY common scenario

Exceptions obviously exist, although it is a rare story of someone locked into the lease train who does not become a paying asset to the manufacturer over time.
 
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