Electric vehicles (EVs) have become increasingly popular and While the prospect of owning an EV may be enticing, leasing an electric vehicle is another option that shouldn’t be overlooked. Let us understand why you should opt to lease an EV over buying.
Federal Tax Credits are about to disappear for a good number of new models all thanks to newly released IRS rules.
For the longest time subsidies, incentives, rebates, and other such provisions have helped make EVs affordable to the larger section of society. But now that they are about to be withdrawn, people are seeing renewed hope in leasing an EV over buying one.
Joe Biden is doing his best to encourage EV adoption but the newly revised tax credits are just not helping. Automakers, dealers, and consumers are confused and frustrated alike.
As we speak 39 of the 91 EVs, hybrids, and plug-in hybrids are eligible for the full 7.5k dollar credit, however, the number will significantly go down by next week when the new rules take precedence.
Some vehicles will be off the list because they are too expensive while others will be taken off because either they are not built in the US or because they don’t meet battery sourcing requirements laid down in the IRA.
Companies like Ford Motor and Stellantis will see many of their EVs and plug-in hybrids qualify for a tax credit of just 3,750 dollars which is also the figure that will apply to Tesla Model 3 rear-wheel drive.
Now you see why you should opt to lease an EV over buying. Under new rules, a leased vehicle will still qualify for tax breaks as a commercial vehicle, also you just rent a car but don’t become the owner, and if the owner of the EV that is the bank applies their savings toward the lease terms the monthly payment for the customers comes down.
Before the IRA was passed in August last year apart from Tesla Model Y and Model 3, Hyundai Ioniq 5 and Kia EV6 were the most popular EVs in America. However, since they are not assembled in the US they no longer qualify for the tax credits.
Hyundai group was all set to invest 5.5 billion dollars to open an EV and battery plant in Georgia that would provide 8,100 jobs by early 2025, however, with the IRA coming into effect both KIA and Hyundai saw their sales fall massively.
Before IRA only 6% of KIA and Hyundai EVs were released but after IRA the figure hit the 30% mark. Andrew Koblenz, executive vice president of legal and regulatory affairs for the National Automobile Dealers Association thinks that leading might not be for everyone as not every customer might not prefer it.
However, if you are getting a car with all the latest tech by making monthly payments and not taking ownership then maybe that’s for the best at least for now.
