MW You're running out of time to buy an EV before Trump's big bill kills the $7,500 tax credit on electric vehicles

By Andrew Keshner

Here's how to try landing a bargain at this point

There's a hard stop coming soon on a lucrative tax credit for electric-vehicle buyers, now that the Republican megabill is speeding out of Congress toward President Donald Trump's desk.

The $7,500 tax credit that car shoppers can use for new EV purchases is set to expire at the end of September, according to the tax and spending bill that passed the House of Representatives on Thursday.

The same goes for the credit on used EVs, which pays up to $4,000.

The Biden-era tax credits were originally planned to apply through 2032. As the reconciliation bill moved through Congress, the expiration date moved up. The legislation first passing the House in May said the credits would run through the end of 2025.

It's one way the renewable energy industry is a loser in the bill, according to one expert. Carmax $(KMX)$ and Carvana (CVNA) signed an open letter urging lawmakers to keep the credits "even in a reduced form, for at least the next several years" because the sudden halts would be too disruptive.

The upshot is that potential EV buyers now have less than three months to decide if they'll accelerate purchases in order to claim the credit.

Buying a car is a big financial decision - particularly when it's an EV. New and used EVs tend to be more expensive than conventional, gas-powered vehicles. In May, consumers paid over $57,700 for new EVs and almost $49,000 for new gas-powered cars, according to Cox Automotive price averages.

Drivers need to consider how they'll use the vehicle and their access to charging stations at home and in their travels. Considering the vanishing tax credits' income restrictions, they'll have to understand their own money situation too.

A hasty rush to the car dealer for an EV isn't a good idea, said Stephanie Valdez Streaty, director of industry insights for Cox Automotive. But for "consumers who are open to buying one, it would be a time to get a really good deal."

How to get the best deal now? Buyers could be motivated to get the credit while it's there, but dealers may be motivated to sell while the car still has an attractive subsidy.

"There's going to be some good push-pull there," said Karl Brauer, iSeeCars executive analyst. The way to get leverage is to have a sense how many cars are still on the lot, he said.

If someone has a specific car in mind and there seem to be fewer of these cars at the dealership, they might want to move fast, Brauer said. If they want an EV but aren't tied to a specific brand, they could do research, roll the dice and wait into September.

By the end of that month, dealers will get nervous about the cars still on the lot, he said.

Valdez Streaty agreed: The key to a good deal now is inventory. Volkswagen (XE:VOW), Audi, Ford (F) and Hyundai (KR:005380) had higher EV inventory through the end of May, she said. Lexus, BMW (XE:BMW), Genesis, Toyota (TM) and Nissan (JP:7201) had lower inventories, according to her.

Tesla's $(TSLA)$ Model Y and Model 3 were the two of the top five new EVs that consumers bought or leased in 2025's first quarter, according to Experian data. The Honda $(HMC.AU)$ Prologue, the Ford Mustang Mach-E and the Chevrolet $(GM)$ Equinox EV were also in the list. These vehicles may all be eligible for the $7,500 credit, according to the car makers' websites.

It's not like EVs are disappearing after September. More used EVs will be hitting the market when leases end, Valdez Streaty said. A "leasing loophole" let drivers take the $7,500 credit without having to stay under the income restrictions. Used EV prices are already becoming pretty comparable with some gas-powered used-car prices, she said.

Car makers are building more gas-electric hybrid vehicles, which also may satisfy shoppers who want more fuel efficiency without EV worries like range anxiety, she said.

Another tax break for car buyers is coming

Car buyers are getting a $10,000 deduction for the interest they pay on car loans - so long as it's a new car with final assembly in America.

The deduction applies to cars purchased from 2025 though the end of 2028. Like the EV credits, there are also income restrictions. The deduction begins phasing out at the $100,000 mark for individuals and $200,000 for married couples.

Many of the same tax-fueled buying tactics apply here too, said Brauer. If a shopper wants to take advantage of the deduction, they should do their research on the cars that qualify and what they can afford.

There are many good cars assembled in America, so consumers have choices. Getting focused solely on one puts a buyer "at the mercy of the market," said Brauer.

Some dealers may increase prices, thinking a shopper will overlook the hike because they're fixated on the tax break instead. Shoppers should know auto dealers are keeping up on the tax news as well, Brauer said. "Dealers are always very aware of these forces at play."

-Andrew Keshner

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July 03, 2025 17:57 ET (21:57 GMT)

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