Could Incentives Save You Thousands?

(Nerdwallet) – I recently got a good deal on my third electric car, and it reminded me how different the process is from buying a regular gasoline vehicle.

While much of the conventional car buying advice still applies, there are additional steps that, when done correctly, can save you thousands of dollars. Here is the strategy I have developed over the past 10 years of buying electric vehicles that will help you get the best deal on the right car.

What incentives and discounts are available?

Without financial assistance such as incentives, you will pay significantly more for electric vehicles than their gas-powered counterparts. The incentives, which vary from car to car, can also affect which electric vehicle you choose.

There are three general types of incentives:

  • Incentives in cash your state and local governments and, in some cases, power companies.
  • A federal tax credit of $ 7,500 if you buy an electric vehicle from an eligible manufacturer.
  • Local benefits such as access to carpool lanes, free charging and free parking.

Since I was planning on buying the Hyundai Kona EV, I knew I would get a check for $ 2,000 from the California Clean Vehicle Rebate Project and $ 1,500 off the price of the car from my utility, Southern. California Edison. The car is also eligible for the federal tax credit of $ 7,500, bringing the potential amount of help available in my case to $ 11,000.

Plus, I had access to a carpool lane, a huge plus in the traffic-congested LA area.

Should I rent or buy an electric vehicle?

Electric cars often benefit from special financing programs from the manufacturer. To find what’s available, go to the automaker’s website and look for a tab that says something like “deals” or “local specials”.

You can see both rental and purchase options, but experience has shown me that it is better to rent an electric car because:

  • Electric vehicles depreciate rapidly, 52% in three years, according to Car and Driver. If you buy an electric vehicle and want to sell it after, say, five years, you will have lost more money than with a gasoline-powered car.
  • Technology is changing rapidly, so your electric vehicle will be obsolete in three years.
  • The range of travel electric cars is growing rapidly. I got 73 miles per charge in my first EV, the 2011 Nissan Leaf, 103 miles in my 2012 Toyota RAV4 EV, and 258 miles in my Kona.
  • Some EV batteries lose their ability to fully recharge after a few years.

Part of my decision to get the Hyundai (in addition to good expert reviews) was that the manufacturer was offering a special lease for this month: $ 1999 in moving costs and a monthly payment of $ 199. for a three-year lease offering 10,000 miles per year. .

To achieve this relatively low monthly payment, Hyundai reduced the cost of this car, which was $ 39,000, by $ 12,000. This reduction includes the $ 7,500 tax credit, which in the case of a lease goes to the manufacturer, and the $ 1,500 support from the local utility company.

The other incentive available, the state’s $ 2,000 rebate, went into my pocket.

How do I locate the EV I want?

Car manufacturers produce a limited number of electric vehicles, so it can be difficult to find the car you want. In some cases, cars in demand or not yet marketed may require you to register on a waiting list. For example, the Volkswagen ID.4 Pro 2021 has a “build and reserve” feature that allows you to specify the car as desired.

A local dealer most likely has a demo EV model that you can test drive before ordering. If possible, try charging the car at home to make sure the connector is compatible. Also experience “one-pedal driving” – a feature popular with EV drivers – which means you don’t constantly move your foot from the brake pedal to the accelerator pedal.

Not all salespeople know the EVs they have on their land. Check Yelp Reviews for the names of knowledgeable sellers or call the Sales Manager and ask if there is a designated EV seller. A good EV salesperson can know what incentives you’ve been missing and contractors who can install home charging units, and they can even help you decide. if an electric vehicle meets your needs.

What’s the best way to close the deal?

If you are renting an electric vehicle, or a car for that matter, you don’t need to purchase an extended warranty because the bumper-to-bumper warranty will be in effect for at least the three years of the lease.

Still, the CFO will likely offer other extras, such as a warranty covering excessive wear, wheel and tire damage, and windshield repairs. These warranties are expensive (in my case, it would have added over $ 1,000 to my contract), and the cost often outweighs the benefits to drivers, according to Consumer Reports.

If you decide to buy and haven’t put in a lot of money, consider adding gap insurance. Severe depreciation could force you to pay more than the car is worth if it is accumulated in an accident. Your insurance company may offer a better price than the dealer.

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Philip Reed writes for NerdWallet. Email: [email protected] Twitter: @AutoReed.

The article How to buy an electric car originally appeared on NerdWallet.


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