Used tax incentives -- anyone figured out when to sell?

I don't think as a seller, if the dealer is willing to pay you more than the market value, then that is the time to sell. But I don't think any dealer will be taking the "used EV credit" into calculating the car's value. The buyer benefits from the credit, but not so much for the dealer. Most likely, the longer you wait, the less value your car is going to sell. Do you have to replace your PP when sold? That comes into play if you are selling it and buying another car. I flipped my PP three times. The last one was 16mo old 21 PP, traded for $32K to buy a new 22 Ford Escape PHEV. It was sold to a dealer for more than the final cost of the 22 Escape PHEV after incentive and tax credit. Certainly, the dealer was not going to sell it for less than $25K, so the used EV credit had no effect.

 

The used clean vehicle tax credit is laid out here: Used Clean Vehicle Credit | Internal Revenue Service

It is pretty simple but with lots of boxes to check. And it is a non-refundable tax credit. If you qualify the credit applies to your total federal income tax for the year of the sale. If the credit is, say, $4,000 and your total tax for the year is less than that (for an example look at your 2022 Form 1040 line 24), all the credit you'll get is the amount on that total tax line. That may get you a nice fat refund, but in this case not the total credit amount.

 

You don't benefit from this credit if you're the seller. The buyer after you does. So the best time to sell is when you can get the highest price. I wouldn't put it past a dealership to tell you they can only offer $20k because they won't be able to sell it for more than 25k and they need to feed their families and buyers will only be interested if they can claim the credit... And then put it on the lot for 30k anyway because hybrids are still very popular used.