How I saved thousands by buying a new car

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My car is worth more than I paid for it. Here’s how I did it.

the main points

  • Since cars lose value quickly, it rarely makes sense to buy a brand new one.
  • Electric and partially electric cars can get you a great tax credit — for now.

I once bought a station wagon for $94 and two gins and tonics. I also got a nice Volvo for free, fixed it for $425, and drove it for years. But I have criteria – when the leak in the sunroof drenched my girlfriend’s Volvo, I upgraded.

I used to pride myself on getting good cars for such ridiculous prices. You were the last person anyone would expect to score a the new the cars. It just has no financial meaning. That old saw is right – a new car loses its value when you push it too far. And it makes no sense to buy a new car now, now that car prices have crossed their ceiling.

But if you’re in the market for a trip, there’s one surefire way to cut the cost—and often, it’s several thousand. You can even avoid a car loan. At the moment I can sell my used car for more than I paid new. Here’s how I did it.

Connect this new exception to the car

The major automakers are doing everything they can on electricity. But even if your tech isn’t sold out, keep reading – you don’t have to buy completely An electric car to drive through is this new car price exception. Because electric (EVs) and hybrid vehicles (PHEVs) pollute much less than gas-powered cars, federal and most state governments take a break to purchase both types of vehicles, through tax credits.

It could be a very big break—as in the $7,500 federal government’s case for an all-electric car. You get less for a PHEV and other partially electric rides. Add state credit, and you might be looking for a big boost to your personal money.

There are some caveats:

  • The entire federal approval applies only to the first 200,000 electric vehicles sold by the manufacturer. After a manufacturer sells 200,000 cars, the credits go down each quarter, then phase out.
  • If your tax bill is less than your tax credit amount, you only get the amount of your tax bill.
  • Tesla and General Motors have sold a lot of electric vehicles and electric migration, and you won’t get any federal credit for either.
  • You are not supposed to claim the credit if you are only buying the car for resale (and in some states, resale terms may apply as well).
  • Some states offer a discount on electricity only or a credit for installing a home charger, but do not offer a credit for the car itself.

How to get a home tax credit

In my case, I bought a Prius Prime PHEV, which, depending on the effect of outside temperature on battery capacity, has 25 to 35 miles of electric driving per charge. I had the good fortune to bring the Prius down to $22,000. The federal government then gave me a $4,502 tax credit. My state, Massachusetts, took an additional $1,500 break.

All told, I got my new ride for $16,000 (technically, $15,998, thanks to that inexplicable $4,5)02). Not bad, given that a used old-fashioned model would set you back $14,000 to $15,000.

To be sure, the pandemic has led to an unexpected rise in car prices. But right now, the book value of my $16,000 purchase is $25,520 for a private party sale. So this time – despite unusual circumstances – my new car challenged the old chainsaw about losing value. And it allowed me to keep more money in my savings account.

Do your homework

If you want to try the same now because car prices are extraordinarily high, do your homework. The federal government keeps handy details of the credits, and the list of eligible vehicles is surprisingly long, even without Tesla and GM. Any kind of extra capacity car should be on the list. President Joe Biden has expressed support for extending and increasing the credits in the failed Build Back Better bill, so there’s a chance things may get better yet.

Your state’s rules may be completely private (and some states, including currently Kansas, Kentucky, West Virginia, and North and South Dakota, do not offer any credits). The National Conference of State Legislatures offers an interactive map with lots of relevant information about electric vehicles and public immigration. It’s a good place to start.

It is worth noting that there is no rule explaining this ought to Use the PHEV’s electrical capacity. I plug them in every day, and get amazing mileage as a result, but it’s credit to me whether or not I use the electric motor. I just got used to the instant silent torque of electric driving, not to mention the game of trying to get 2,000 miles or more per fill. And this is a game that always comes for your money.

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