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How to score an instant rebate on a new or used electric car in California

Russ Mitchell, Los Angeles Times on

Published in Automotive News

Thinking about treating yourself to an electric car as a winter holiday gift? You might wait until Jan. 1, when new rules kick in that allow your down payment to be paid with free money from Uncle Sam.

If your income isn’t too high, and the car or truck you plan to buy isn’t ultra-luxe, you could qualify for instant cash back of up to $7,500 for a new vehicle, or up to $4,000 for used. The deal applies to electric cars and plug-in hybrids.

The money is actually a federal tax credit, but unlike previous programs, you don’t have to wait until tax time to take advantage. Beware though: If you make more income than you claimed when you bought the car — and it’s over the income limit — you’ll have to pay the money back to the IRS.

The new program is making car dealers happy.

“There’s going to be more cash on the hood,” said Brian Maas, president of the California New Car Dealers Assn. The new incentive program is far more streamlined than the previous federal program, he said. That should mean more throughput on electric vehicle sales, helping EV customers and dealers. It’ll also help the California government fulfill its mandate that any new passenger vehicle sold by 2035 be electric. “In order to move to 100%, we’ll need literally every consumer who is going to buy a new vehicle to buy zero-emission,” Maas said.

How does it work?


When you buy a new electric car at a registered dealer, you negotiate how much of the tax credit you’ll use for a down payment, and how much cash you’ll get back — usually on the spot, through a credit on your charge card. The dealer must be registered for the program with the IRS. Maas expects most dealers who sell EVs will do so. The dealer takes care of the paperwork and the rebate, and is reimbursed by the government within 72 hours.

Who qualifies?

To get a credit, your modified adjusted gross income cannot exceed:

—$300,000 for joint filers or for a surviving spouse;


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