How to buy an electric vehicle before the incentives go away
You don't have to be plump in the pocket to buy an EV, especially a used one, but the federal incentives run out by the end of this month. Here's what you need to know.
By Steve Pierce
Sebastopol resident Marilyn Madrone has had a used Nissan Leaf, which she affectionately calls “LeafyLou,” for a couple of years. She ditched her old pickup truck, which was needing increasing repairs, and bought the used 2015 vehicle. She was able to save $4,000 using a PG&E incentive available for income-eligible customers. After the incentive, the car cost her $4,500.
Like many buyers of electric vehicles, Marilyn wanted to reduce her carbon footprint, lower her fuel costs and have much lower maintenance costs. While her older Nissan Leaf has a limited range of 87 miles, it suits her needs. This car can be ideal for both older or teenage drivers who want to use it primarily as a Sonoma County car.
Marilyn had some assistance with the paperwork process from Tor Allen at the Rahus Institute, which is a local nonprofit focused on climate action. Tor and his wife Dena bought a used 2020 Bolt EV and were able to take advantage of $8,000 in incentives off a list price of $18,160. The Bolt gets over 259 miles on a full charge, and they have taken it on a few 2,000-mile road trips.
Tor, Dena and Marilyn are in good company. According to City Climate Dashboard, Sebastopol leads Sonoma County with 9.8% of all registered light-duty vehicles being plug-in hybrids or fully electric. In Sonoma County, 25.3% of all new 2024 light-duty vehicles sold were plug-in electric, according to the DMV.
If you have been thinking about getting an EV, now is the time to move on it because the federal incentives are going away at the end of this month.
What you need to know about Federal Tax Credits
Federal Tax Credits are set to end September 30, 2025. These EV credits were set to expire in 2030, but Trump and a pliant Congress, in all its wisdom, decided to cancel the EV credits at the end of this month as part of the “Big Beautiful Bill.”
New Clean Vehicle Tax Credit
Up to $7,500
Vehicle price limits:
$80,000 for SUVs and pickups
$55,000 for other vehicles
Used Clean Vehicle Tax Credit
Up to $4,000 - can’t exceed 30% of sales price
Vehicle must be at least two years old.
Vehicle price limit: $25,000 for all used vehicles
There are income limits for Clean Vehicle Tax Credits for new and used vehicles:
NEW VEHICLES
$300,000 for joint filers
$225,000 for head of household
$150,000 for single filers
USED VEHICLES
$150,000 for joint filers
$112,500 for head of household
$75,000 for single filers
Tax credits are subject to income and vehicle eligibility requirements. Visit fueleconomy.gov/feg/ for qualifying vehicles. You don’t need to take delivery of your EV by 9/30/2025, just sign a contract and pay a down payment by that date, according to InsideEVs.
How to claim your tax credit
There are two ways to claim your Clean Vehicle Tax Credit: immediately at purchase or later on your taxes.
Get your tax credit immediately
Apply your credit at the point of purchase to reduce the vehicle price upfront. This requires the dealer to participate in the EV Point of Purchase program.
If purchasing from a private party, you can still claim the credit by using KeySavvy. They act as an escrow service and act as an online dealer. The process takes 1-2 days for setup and portal steps online for both the buyer and seller, then 1-3 weeks to send title/payment, and receive title/payment back from KeySavvy.
Claim on your tax return. File Form 8936 in the year you purchase your EV.
Searching for used EVs
There are many used EVs for sale that are less than $25K, such as the Ioniq5, Chevy Bolt, Nissan Leaf, Hyundai Kona, Kia Niro, and Tesla M3 or ModelS. Looking beyond Sonoma County can lead to more vehicles available at a lower price.
Financing. Buying any vehicle can be a heavy financial lift. Redwood Credit Union has some special rate discounts for EV & hybrid vehicles. After a few months, once you receive the PG&E rebate, you can pay some of the loan costs down with the proceeds.
What about leasing? There are some compelling lease offers available for new EVs. With a lease, the financing entity takes the tax credit and lowers your lease payment. With a lease, your income eligibility for the tax credit is not taken into account. Typically, your monthly lease payment will be based on several factors: your credit score, how much of a down payment at purchase time, how many miles you think you'll drive each year, if you are planning on purchasing or returning at the end of the lease, and the number of years (typically 3 years). With the tax credits going away, car dealers are motivated to reduce pricing and negotiate. Leasing an EV is a good way to try out a vehicle at a lower cost than purchasing, though after three years, you’ll return it with no equity.
Some incentives are sticking around
The PG&E Used EV Rebate of $1,000 with up to $4,000 for income-qualified buyers will still be available after the federal credits expire. Applications must be submitted within 180 days of the date of EV purchase or lease. See income eligibility requirements for the expanded credit. The Sebastopol Library can help with scanning documents needed for the application.
Note that it can take three to six months after purchase to get this rebate check. You need to get proof of registration after purchase before you can submit the paperwork required.
PG&E charger incentives are 50% of the cost of the charger or 100% for income-qualified buyers.
For rural properties, the Federal Inflation Reduction Act 30C Alternative Fuel Vehicle Refueling Property Credit has an incentive for chargers and charging infrastructure, which expires in June 2026. The incentive is generally 30% of the property’s cost or $1,000, whichever is less. Some of Sebastopol qualifies as rural. To see if your property qualifies, see the map provided by Argonne National Laboratory..
What about charging?
EV owners typically charge at home. Most cars come with a 110-volt charger, which provides four to five miles per hour of charging, whereas a 220-volt charger gives 20 to 30 miles per hour of charging. If you have a 220-volt clothes dryer, splitter devices are available to charge your vehicle.
For long trips or homes without an accessible charging option, the charging networks are expanding. The Tesla supercharging network is now partially available to non-Tesla vehicles.
EVs vary in charging speed and compatibility.
Try to keep most of your charging times to sunnier times of the day to take advantage of when solar power is available on the grid or from your own solar panels..
Buying and driving your first EV can be a rewarding experience. If you are considering an EV purchase, now is the time to make the leap to cleaner transportation while the federal incentives last, and then you too can love your version of “LeafyLou.”
Additional resources
Steve Pierce is a member of the City of Sebastopol Climate Action Committee, developer of CityClimateDashboard.org and the happy owner of a 2015 Nissan Leaf.
Pretty sure you don’t want to top off the EV battery during the brightest part of the day, unless, PG&E has managed to totally eliminate the original net metering rates that made home rooftop solar panel installations attractive.
Thank you!! Scott