Lowering purchase price for consumers

Starting January 1, 2024 consumers can transfer their credit to a car dealership, which will effectively lower the vehicle’s purchase price & provide consumers with an upfront down payment on their vehicle at the point of sale. Up to this point, consumers have had to wait to claim the credit on their tax return the following year.

What do dealerships need to do?

In October, dealers need to register via an IRS Energy Credits Online portal. This is a requirement for dealers to offer tax credits to qualified consumers for qualified vehicles. Dealers will use this portal to submit “time of sale” reports, which will confirm the vehicles’ eligibility for credit, whether or not the buyer chooses to transfer the credit to the dealer.

Here is a note from the announcement:

“When a buyer chooses to transfer the credit, registered dealers will reduce the purchase price of the vehicle or provide cash to the buyer. The amount provided must equal the full amount of the credit available for the eligible vehicle. When completing the sale, the dealer will electronically submit information regarding the transfer, including a time of sale report, to receive an advance payment for the value of the credit. The IRS expects to issue advance payments within 72 hours.”

Overall, this policy seems both consumer and dealer-friendly:

“Advance payments received by the dealer would not be treated as a tax credit to the dealer and may exceed the dealer’s regular tax liability. Advance payments received by the dealer would not be includible in the gross income of the dealer. The payment made by the dealer to the consumer in exchange for the transferred credit would not be deductible by the dealer. The payment made by the dealer to the consumer (in the form of a cash payment, down payment, or partial down payment) would not be includible in the gross income of the consumer.”

How should dealerships showcase these credits to consumers?

Lectrium has developed a “True EV Price Badge” for dealerships to include credits into the full price of the vehicle. Dealers can confidently show the potential savings a consumer can have on the state and federal levels and also include things like EV fuel cost savings to illustrate the more affordable ownership of an EV compared to an ICE vehicle.

Which EVs are eligible for the tax credits?

Check out the blog post here to see which EVs qualify for the new vehicle tax credits, and for which amount they qualify.

We have information on range, battery sizes, charging speeds, and more on our EV Listings Pages. Make sure to consider manufacturer rebates if you are leasing an EV, as your options for receiving the $7,500 federal tax credit are much wider.

Lectrium also helps you find the best EV charging station for your home. Shop chargers here.