How to save thousands on a car by stacking Trump's tax credits with Biden's
Consider how each president's signature piece of legislation could help you save on a new car:
◾ 2022 Inflation Reduction Act: The Biden-era incentive gives you up to a $7,500 tax credit for new, plug-in EVs or fuel-cell electric vehicles. Trump's massive tax and spending policy bill will end this credit on Sept. 30.
◾ 'Big Beautiful Bill': Trump's new law offers an annual tax credit of up to a $10,000 on the interest of loans for new vehicles as long as they're less than 14,000 pounds and assembled in the United States. It covers purchases made in 2025 through 2028.
Big Beautiful Bill 101: What you need to know about the new law
How long Biden's and Trump's tax credits for new cars last
Unable to view our graphics? Click here to see them.
More: What new version of Trump's 'Big, Beautiful Bill' could mean for EV car buyers and automakers
How to stack the auto tax credits
Here's how combining Biden's and Trump's tax credits over the next four years could save you a hunk of money on an EV:
A new EV might not be the best investment
To be sure, this strategy might not be the best way to stretch your dollar. But perhaps you're set on purchasing a new EV with the latest gadgets and upgrades.
The average price paid for a new EV this year has been $57,734, according to Kelley Blue Book. Even with the $7,500 tax credit, the EV premium over a gas-powered car is about $1,500. The math tips in favor of EVs when you look at the five-year fuel costs: $9,490 for gas-powered vs. $4,295, according to Kelley Blue Book.
If you can live without the new-car smell, used EVs' average listing price this year is about $20,000 less than for new models, according to Kelley Blue Book. You can also get a $4,000 tax credit from Biden's legislation for a used EV, but that wouldn't qualify you for the Trump tax credit.
Some additional fine print to consider if you use either of these tax credits
◾ Big Beautiful Bill: The tax credit for auto loans phases out for incomes between $100,000 and $150,000 for an individual and between $200,000 and $250,000 if you file jointly. It's not available for fleet purchases, commercial vehicles or leasing.
◾ Inflation Reduction Act: To take advantage of the EV credit, you also must buy the car − assembled in North America − for your own use. Your income must to fall below $150,000 for an individual and $300,000 for those filing jointly.
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