For the time being, the federal government will give you a $4,000 tax credit to buy a used electric car. A little known facet of the federal Inflation Reduction Act, the Used Clean Vehicle Credit, earmarks a chunk of money to help consumers buy a used electric car as long as it meet some basic criteria. This benefit is likely to go away in the near future, either with the change in political winds or simply, as the rules are revised based on marketplace demands and other factors.
Even if you’re not in the market for an EV, the deals may be too good to resist. Here is what the rules stipulate, how you can qualify and some of our favorite EVs, which you could have for a cool $20K—or much less.
Rules First: What You Need to Know About the $4K Tax Credit
Of course, there are rules to the qualify for the used clean vehicle tax credit:
- The car must be purchased for under $25,000; this does not include taxes, title and registration but does include any extras or fees
- The credit amount is 30% of the price of the car, up to $4,000 (so, you only need to spend about $13,500 to realize the entire credit)
- The car must be more than 2 years old (date is based on calendar year, so the model year must be 2022 or older)
- The car must be sold by a licensed dealership and the dealer must register the sale with the IRS or you won’t get the refund
- The car must be bought by an individual (not a business) for personal use
- The car cannot be flipped—the buyer must hold on to it and drive it
- The buyer cannot be the original owner of the car
- The buyer must qualify for EV tax incentives, meeting income and tax requirements
- The car must be a one-owner car before resale
- This is a one-time credit on the car; the car being bought cannot have been sold since August 16, 2022—so look at the CarFax and other documentation carefully!
Next, Benefits to Buying a Used Electric Car
There are a lot of benefits—more than just a potentially great deal on a new car. They include:
- Buyers can transfer the credit to the car dealership at the time of purchase and have the credit amount shaved off the price of the car; keep in mind that if you don’t end up qualifying for any portion of the credit you will have it tacked on to your tax bill at the end of the year. Also, tax credits can’t be rolled over to the next year
- All EVs qualify; there is not a list of criteria other than those listed above
- Many EVs may still qualify for a bumper-to-bumper warranty and most or all should have a sizable warranty left on the battery and powertrain; the typical warranty is 8 years/100,000 miles (but look carefully at the manufacturer’s warranty details)
- A two-year-old car could potentially have very few miles
- Electric cars, with fewer moving parts and few fluids, tend to have lower maintenance and repair costs
- Powering an electric car can cost a fraction of a gas fill-up—on average abut $50 a month for owners who charge at home
- Many states allow EVs to use HOV lanes, and of course, dedicated EV parking is often premium—as long as you’re using the charger
What To Consider When You Shop For In a Used Electric Car
The criteria for an electric car can be a little different than in a gas-powered car. Here are the things you should consider:
- The number of miles you typically drive in a day, or over a few days; you’ll want a car that can manage that many miles without needing to be charged every day
- How much battery range you really need; when looking battery size and range, keep in mind that EV batteries degrade over time and within a few years may only have 70% of the original range
- Where you’ll charge it; ideally, at home where it’s cheapest
- Other places you’ll need to charge; for instance, if you drive to a vacation spot several times a year, will your car be able to make the trip without charging, charge along the way, and charge while you’re there?
- Local fast charging — if you need a quick jolt, such as a DC fast charger near work or home
- Drive type; many EVs are AWD, which perform better in bad weather and on uneven surfaces, such as gravel or dirt; others are rear or front wheel drive. Make sure you have a drive type that suits your needs
- Key features that you’d look for in any car: Tech, like Apple CarPlay and Android Auto, heated seats, a heated steering wheel. Typically, these are standard in EVs but make sure you get what you need
- Warranty: the car’s bumper to bumper and battery warranty start the first day of its first purchase. Use that date to calculate how much, if any, warranty remains
- Have it inspected before making a purchase. All used cars should be inspected by an independent mechanic
And Then, Go Electric Car Shopping!
There are several ways to approach this. My favorite way is to set up searches on several sites and then, save each search and turn on notifications. I start with TrueCar, AutoTrader, Edmunds and Cars.com. Here are the criteria I put in my search:
- Price range
- Mileage—I usually look for a car with fewer than 40K miles; 12K miles a year is typical
- Color
- Trim or features
- CarFax or AutoCheck report-every used car should have one available
- Distance from my zip code; I search nationwide so I have a frame of reference for pricing; you may also find the perfect car, and you can have it shipped
You can create a search by model, or simply, search electric cars by price and location. Now, which EV is right for you? Here are some of our favorites
Mustang Mach-E, Priced From $21,000
Ford made a bold play adding an electric 4-door SUV to the Mustang family, but it has been a good one. It’s one of the most-loved EVs on the road, with fan clubs and devoted owners. And we can see why: Sporty styling, premium interior details and a range that goes the distance—more than 200 miles on the low end and up to 312 miles on the high end.
VW ID.4, Priced From $18,000
When VW launched the ID.4, they called it the EV for everyone; well-priced, well-outfitted and with lots to love, from a cute face to clever interior details and good technology. With a range of 200-300 miles, depending on which battery and whether you choose AWD, this one can go the distance between charges.
Hyundai Ioniq 5, Priced from $21,000
We love the Hyundai Ioniq 5 for so many reasons: The open cabin design, the huge cargo space, the roomy rear seat that’s ideal for kids and dogs, and the fast charging infrastructure—10-80% in just 18 minutes at a DC fast charger—and the 220-303 mile range, dependingon battery size and
Tesla 3, Priced From $18,000
There has never been a time like this to buy a Tesla. And now for $21,000? Unprecedented. If you’re in the market for its high design exterior, minimalist interior, vegan materials and quick-charging infrastructure with a built-in network fo chargers, this could be the time.
BMW i3, Priced from $12,000
This is one of the OGs and one of the best. In fact, used BMW i3 models have been snapped up by municipalities and EV fans for their high reliability and low maintenance. And, open, flexible interior. However, they have an all-electric range of about 150 miles, putting them on the lower end of feasibility for many drivers.
Polestar 2, Priced From $22,000
The Polestar 2 has one of the most elegant, modern and minimalist interiors of any used electric car. Polestar, and parent company Volvo, put a lot of thought and resources into this car, resulting in a very modern look and feel. And with 260-270 mile range it can get you where you need to go.
Kia Niro, Priced From $16,000
The Kia Niro EV may be one of the best bargains out there right now. With a range of 239 miles, this little cutie also offers many nice features, a flexible cabin and good driver assist and safety systems for the price.
Chevy Bolt, Priced from $14,000
If you can find one, that is. The Chevrolet Bolt is a cult favorite for its 250+/- mile range, multitude of features and comforts and in some models, Super Cruise hands-free driving. Chevy decided to cancel this car and ended its production, but the outcry was so loud, they decided to bring it back. Here is one caveat: There was a pretty serious battery recall a few years ago. Chevy took care of it, but double check to make sure that any Bolt you may buy was repaired.
Mazda MX-30, Priced From $15,000
This one made me pause and consider buying it: Mazda MX-30 is an outlier, and quite a surprise. It’s filled with premium features, innovative materials and has a novel coach door design, which I really like. It’s small and intended for short commutes and trips to the dog park, and has an all-electric range of about 100 miles. Mazda only sold a few hundred of these in the US, so if you can find one, and the range is good for your needs, it’s a good get.
Nissan Leaf, Priced from $6,000
This will give you confidence: There are more Nissan Leafs on the road than any other electric car. And this may give you pause: this is the only EV that still uses the CHAdeMO charge protocol, which is being phased out. There are adapters of course, and if you charge at home, it won’t matter, but it could be a consideration. But with great features, up to 215 miles of range and a long history of reliability, Nissan Leaf is a solid choice.
Mini Cooper SE, Priced from $19,000
What more is there to love than a cute gad-about-town for your daily runabout? The Mini Cooper SE is a two-door hardtop not only filled with all we love that is Mini, from a great drive experience to iconic brand design, but it comes with additional design features that let you know it’s electric. With a range of about 114 miles, seating for four and a bit of cargo space in the rear, it’s great for daily errands, commutes and short hauls to fun places.
And that’s just 11 reasons to start shopping for a used electric car. There are more. 4,000 more!
