[ctviggen]

I keep seen the argument that electric cars like the Volt or the Bolt are $7,500 cheaper than the sticker price because of the $7,500 federal tax credit. I don't buy that argument.

For me, we used the $7,500 credit toward taxes. I applied none of this toward the loan on my Volt. Thus, while the credit was beneficial to us, it in no way lessened the price of the Volt.

What did you do with your tax credit? And why do people think this credit lessens the price of the car? Did anyone actually take the credit an apply it toward the loan?

 

[BAZINGA]

I loaned it to myself to reduce my upfront costs. I just got my federal return and repaid my self.

This helps keeping me from being "upside" down on my loan. It's comforting that I owe just at $13K on my 6 month old fully loaded 2017 Volt. Since I plan on retiring this year I can easily pay off this balance. I sleep better.

 

[Just_Jon]

I bought used so no direct credit to me.

However, "the market" takes into account the $7500 "discount" so I benefited indirectly.

Call it total cost of ownership, mental accounting, impact on your bottom line, whatever, you are $7500 richer (less poor?) than if you had NOT gotten the credit.

Where would that $7500 in tax money have come from if you didn't have the credit? What did you do with THAT money?

 

[DonC]

Definitely reduces the price of the car. No way around that. We paid cash so there wasn't a loan. No idea what we did with the credit. Likely just applied the refund to the next year's taxes.

 

[norcalkrautnit]

Took the $9k last year ($7500 Fed/$1500 CA), invested it in Apple and Facebook (both at under $100/share), and have close to 50% return on the investments to date. My loan on the Volt was at 0% interest. Including the value of the Apple/Facebook investments, I owe under $10k on the 17-month old car. Once that's down to zero (late next year), I'll pay off the entire balance with the Apple and Facebook stock. So my $41k+ MSRP Volt, which cost me $19,320 after ~$22k in discounts/rebates/credits (but before sales tax/license fees), will hopefully only cost $13k-ish (plus those sales taxes/license fees). So, fully paid for in under three years, and with savings on gas alone (4.5 gallons used in 17 months of daily commuting, and PG&E bill LESS than PRE-Volt due to EV rate schedule even with nightly charging!), this awesome ride will eventually have a net cost of ZERO!!!!!!!

 

[tripowergto 2010]

I was able to use the entire $7500 tax credit up front on my 2014 Volt lease. I didn't have to pay sales tax on the $7500 and I didn't have to wait to get it. But... because I have a family I didn't have the full $7500 in tax liability so leasing was the only way for me to realize the entire credit. Sadly the lease companies no longer "share" the entire credit.

 

[madmike]

I'm not very creative, I also used it to pay down my loan, even though it was a no interest loan.

 

[Shivetya]

I get to wait till next tax season to claim ....

 

[llninja]

I get to wait till next tax season to claim ....

You can change your withholdings until you pocket $7500 now, then change it back. No need to wait until April 2018 to get your money. No need to give Uncle Sam an interest free loan.

My tax credit went back into the savings account that I used to buy the car. In fact, after 18 months I realized it was stupid to have money sitting in investments (mostly stocks) while making payments and paying interest on the volt, I sold the investments and paid off two cars in the same week. It's really nice to not have any car payments. Sure there might have been some gains that I missed out, but the real gains is freeing up my future income so it's not automatically leaving the bank account.

 

[Off Oil]

I moved it into a savings account, and use it to effectively reduce the car payment by dividing it over life of the loan.

 

[tgolden]

Purchased NVDA once the money was deposited in my account last year...it's done well. Wish I would have purchased more than I did.

 

[PilotAlan]

I'm self employed, so I took $7500 + $5000 state credit from my tax withholding savings account and applied it to the car.

 

[Loboc]

I took the $10k (State+Fed)and paid off the loan to insulate my attic. That was at 9% and the ELR is at 1.9%. The $300 credit for the EVSE went into the general fund. This means I paid taxes on the full $53k for the car.

But, I don't care about all that. Driving a show car every day!

 

[Bacardi]

I applied none of this toward the loan on my Volt. Thus, while the credit was beneficial to us, it in no way lessened the price of the Volt.

Purchasing with a loan is the minority; reported that half lease and then while we have no way of knowing, the demographic for the Volt tends to be for older folks therefore as you're seeing on here, several buy with cash...

In your situation though, you're looking at this from a micro level...If we go more macro, it all comes down to deposits vs withdrawals...I'll use a random round numbers; you have $50K in your checking account and take a loan on a Volt...Your tax liability is $10K...Because you got a loan on a Volt with a tax credit, you now only have to pay $2500 in taxes so now there's $47,500 in your checking account regardless whether you want to apply it to the loan or not...Had you taken out a loan for a Malibu for the same price as the Volt, after you pay your taxes you will only have $40K in you account...

Like it or not, like all offered incentives/rebates, they drop the resale value of the car by the same amount...

 

[sfatula]

I took my $7,500 tax credit (well, I will take) and used it to withdraw money from a retirement plan, withdrew enough that I had 0 tax liability. So, in other words, I withdrew money from retirement to savings tax free. Normally, I would be taxed on that money. So, I guess you could also say I used it to buy the car.

 

[samotlietuvis]

Knocked down the Volt balance...

 

[edk-austin]

I didn't adjust with-holding, although it was tempting. Used the whole $7500 to pay down the load principal, even though it was only 1.4% Have enjoyed Volt so much I almost bought a new one once I paid it off the 2014 after 26 months. But then sense prevailed, and I put in Solar last year (cash deal).

 

[El Dobro]

I put it in a CD, since the car loan is at 0% interest.

 

[dutch husky]

I keep seen the argument that electric cars like the Volt or the Bolt are $7,500 cheaper than the sticker price because of the $7,500 federal tax credit. I don't buy that argument.

For me, we used the $7,500 credit toward taxes. I applied none of this toward the loan on my Volt. Thus, while the credit was beneficial to us, it in no way lessened the price of the Volt.

What did you do with your tax credit? And why do people think this credit lessens the price of the car? Did anyone actually take the credit an apply it toward the loan?

Let's say, hypothetically, you paid the exact same price for an Impala instead of a Volt. You would have had to pay $7,500 more in income taxes than you did. So yes, the Volt was $7,500 cheaper in the end. You just chose not to take the money you would have paid in taxes and apply it to your loan. (All this assuming you have that much tax liability in the first place).

I don't have $7,500 in tax liability, so I would not have gotten the full credit. But that's also why I bought used. And my used 2016 came at about $13k below sticker so I still benefited from the tax credit, though indirectly.

 

[Joiner]

We just bought ours less than a month ago but the $7500 will be used to pay off a 2016 MKZ hybrid we purchased 6 months ago. That has 2.9% interest and the Volt has 0%. So the credit will be used to get rid of our highest interest car payment, win!