[Trevortypes]

there are a ton of variables (interest rates, chip and supply chain, possible recession, tax credits, general EV demand, “extremely limited” gv60 supply, etc) but wondering everyone’s best guess at value retained (in USD).
if you asked me pre-pandemic to purchase a new 60k vehicle, I’d say “of course not. You lose 20% as soon as you drive off the lot”.
but these days, used cars (EVs in particular) are often selling above MSRP, and you can claim the 7.5k in tax credits too.
I’m not expecting to come out ahead, but if I purchased and did not happen to keep the vehicle very long, I’m wondering if it could possibly net to something like an inexpensive lease.
I have a gv60 advanced reservation arriving end of month and need to decide to move forward or not.
If I purchased today at msrp $58,890 (gv60 advanced), what do you think the TRADE-IN value would be…
1 month
3 months
6 months
1 year
3 year

thanks in advance!

 

[MLB007]

there are a ton of variables (interest rates, chip and supply chain, possible recession, tax credits, general EV demand, “extremely limited” gv60 supply, etc) but wondering everyone’s best guess at value retained (in USD).
if you asked me pre-pandemic to purchase a new 60k vehicle, I’d say “of course not. You lose 20% as soon as you drive off the lot”.
but these days, used cars (EVs in particular) are often selling above MSRP, and you can claim the 7.5k in tax credits too.
I’m not expecting to come out ahead, but if I purchased and did not happen to keep the vehicle very long, I’m wondering if it could possibly net to something like an inexpensive lease.
I have a gv60 advanced reservation arriving end of month and need to decide to move forward or not.
If I purchased today at msrp $58,890 (gv60 advanced), what do you think the TRADE-IN value would be…
1 month
3 months
6 months
1 year
3 year

thanks in advance!

Short term I think you'd be fine. As noted costs keep going up. 2 year old cars are often asking (if not selling) for what they sold for NEW.
Most of why E's are SO expensive is the limited supply of batteries (and now chips). If you can only make 50,000 of something do you want to sell them for 40k or 60k?
The answer is on the car lot.
But, the next generation (coming soon) of E cars are going to expand the market greatly with much less expensive options.
AND enough ongoing issues with E's (notice Ford pulled out of the commercial E van market for now), that the sweet spot seems increasingly clearly to be in hybrids. Plug in hybrid in general but hybrid of some sort. THen you've got the motor back up (huge to a huge number of people) AND the E assist that everyone loves and increase mpg significantly. If not run on straight E as the plug in does.
I think i'm going to cancel my Nissan Ariya order and I'd bet that in a couple of years you'll get something comparable for 35-40k instead of 40-55k.
JMO but it's a growing feeling in the car press too.
We always pay extra to be early adopters and this is worse than most tech I think.
And the makers are exploiting the "feel good" aspect as much as possible.
I think the 3 year mark is anyones guess.
But if solid state batteries or any other configuration that significantly opens range or size/weight hit the market, these "1st Gen" (for most) cars are going to drop in value like rocks in water.

 

[Trevortypes]

Short term I think you'd be fine. As noted costs keep going up. 2 year old cars are often asking (if not selling) for what they sold for NEW.
Most of why E's are SO expensive is the limited supply of batteries (and now chips). If you can only make 50,000 of something do you want to sell them for 40k or 60k?
The answer is on the car lot.
But, the next generation (coming soon) of E cars are going to expand the market greatly with much less expensive options.
AND enough ongoing issues with E's (notice Ford pulled out of the commercial E van market for now), that the sweet spot seems increasingly clearly to be in hybrids. Plug in hybrid in general but hybrid of some sort. THen you've got the motor back up (huge to a huge number of people) AND the E assist that everyone loves and increase mpg significantly. If not run on straight E as the plug in does.
I think i'm going to cancel my Nissan Ariya order and I'd bet that in a couple of years you'll get something comparable for 35-40k instead of 40-55k.
JMO but it's a growing feeling in the car press too.
We always pay extra to be early adopters and this is worse than most tech I think.
And the makers are exploiting the "feel good" aspect as much as possible.
I think the 3 year mark is anyones guess.
But if solid state batteries or any other configuration that significantly opens range or size/weight hit the market, these "1st Gen" (for most) cars are going to drop in value like rocks in water.

Thanks for your well thought out reply! I just sold my Mazda CX-30 for close to what I paid and plan to accept the GV60 when it arrives. no one knows the future and I agree that new battery tech and cheaper prices would drop values significantly. but there is an immediate benefit of avoiding the high gas prices in California that would save me about $300 per month alone and offset a good portion of the loan cost. I’m sure it’s more vehicle than I need (I was considering a Bolt EV), but I can handle the payment and will definitely enjoy the luxury of the GV60!

 

[MLB007]

Thanks for your well thought out reply! I just sold my Mazda CX-30 for close to what I paid and plan to accept the GV60 when it arrives. no one knows the future and I agree that new battery tech and cheaper prices would drop values significantly. but there is an immediate benefit of avoiding the high gas prices in California that would save me about $300 per month alone and offset a good portion of the loan cost. I’m sure it’s more vehicle than I need (I was considering a Bolt EV), but I can handle the payment and will definitely enjoy the luxury of the GV60!

Sad but telling that GM got in way early but chose the inexpensive end of the market and never made anything that excited anyone. (in a hybrid)
I thought the Volt was getting kinda nice just when they killed it.
dont' forget the $7500 federal tax credit!!
Go for it. I kinda wish we'd done that now that they are actually here.

 

[GenesisJohn]

Sad but telling that GM got in way early but chose the inexpensive end of the market and never made anything that excited anyone. (in a hybrid)
I thought the Volt was getting kinda nice just when they killed it.
dont' forget the $7500 federal tax credit!!
Go for it. I kinda wish we'd done that now that they are actually here.

Could you please explain how the 7500 Federal Tax credit works? Do I actually see the $7500 come to me?
Thanks, John

 

[smartino]

Could you please explain how the 7500 Federal Tax credit works? Do I actually see the $7500 come to me?
Thanks, John

Basically if you owe at least 7,500 in income tax (this is the amount of taxes you are required to pay, not withheld). Then the 7,500 credit will reduce the amount of taxes paid by that amount. If you only owe 5,000 in taxes then you will get a credit of 5,000 you don’t receive the 2,500 of the credit not used. Think of the credit as a way to reduce the amount if taxes you owe.

 

[GenesisJohn]

Basically if you owe at least 7,500 in income tax (this is the amount of taxes you are required to pay, not withheld). Then the 7,500 credit will reduce the amount of taxes paid by that amount. If you only owe 5,000 in taxes then you will get a credit of 5,000 you don’t receive the 2,500 of the credit not used. Think of the credit as a way to reduce the amount if taxes you owe.

OH OK, that is good to know! So that is kinda cool! What documentation does it take to claim it?

 

[smartino]

OH OK, that is good to know! So that is kinda cool! What documentation does it take to claim it?

I believe it is IRS Form 8163 that you complete. You indicate the date of purchase, model and make and VIN. This form is completed when you file your taxes.

 

[GenesisJohn]

I believe it is IRS Form 8163 that you complete. You indicate the date of purchase, model and make and VIN. This form is completed when you file your taxes.

Excellent! Thank you. I don't have my GV60 yet but I am hopeful to get one this year!

 

[MLB007]

Excellent! Thank you. I don't have my GV60 yet but I am hopeful to get one this year!

Most people don't owe enough to utilize the full amount. You can reduce your (fed) withholding for the rest of the year to ensure you can use the full credit. If you have a state program you might want to look at reducing state withholding as well.

Shameful that car dealers (and others) tout it like you will be getting that $7500 off the purchase price when you write the check. ( show 50k car as "42.5 after fed tax credit" = BS)
You're paying them 50K, you're paying sales tax on 50k. MAYBE you get some (or all) of the $7500 back NEXT year when you file your taxes.

 

[GenesisJohn]

Most people don't owe enough to utilize the full amount. You can reduce your (fed) withholding for the rest of the year to ensure you can use the full credit. If you have a state program you might want to look at reducing state withholding as well.

Shameful that car dealers (and others) tout it like you will be getting that $7500 off the purchase price when you write the check. ( show 50k car as "42.5 after fed tax credit" = BS)
You're paying them 50K, you're paying sales tax on 50k. MAYBE you get some (or all) of the $7500 back NEXT year when you file your taxes.

Wait so I owe 2500, then get the 7500 credit, I don't get a check for 5000?

 

[smartino]

Wait so I owe 2500, then get the 7500 credit, I don't get a check for 5000?

Correct. It’s a credit against taxes owed.

 

[GenesisJohn]

Correct. It’s a credit against taxes owed.

Wow, thank you for letting me know. It certainly is portrayed very differently by OEMs and dealers.

 

[smartino]

Wow, thank you for letting me know. It certainly is portrayed very differently by OEMs and dealers.

Sure thing. I currently own a Mustang Mach-E but had 2 Tesla's before the Mustang so I am very familiar with how the credit works. Doesn't surprise me that dealers either have no clue or just outright lie.

 

[MLB007]

Wow, thank you for letting me know. It certainly is portrayed very differently by OEMs and dealers.

Yep. That's why its' up to you to adjust your with holding to ensure you are able to use it.
Way too many have no clue and end up getting nothing or not much.
Almost everyone hates to pay uncle Sam at tax time so almost everyone withholds enough to not owe.
You want to OWE (assuming you get the car in this calendar year)
Enjoy all that extra cash on your paychecks now, but I'd stash a couple thou in case you cut withholding too much and end up owing 10k and would have to pay the over $7500 amount.

 

[smartino]

Yep. That's why its' up to you to adjust your with holding to ensure you are able to use it.
Way too many have no clue and end up getting nothing or not much.
Almost everyone hates to pay uncle Sam at tax time so almost everyone withholds enough to not owe.
You want to OWE (assuming you get the car in this calendar year)
Enjoy all that extra cash on your paychecks now, but I'd stash a couple thou in case you cut withholding too much and end up owing 10k and would have to pay the over $7500 amount.

Just to be clear receiving the credit has nothing to do with the amount of your refund or if you owe to the IRS when you file. It is purely based on the amount of actual tax liability owed to the IRS that matters. If you pay at least 7,500 in taxes then you can use the full credit. For example if the taxes you must pay is 10,000 and you had 11,000 withheld you would normally receive a 1,000 refund. But in the case of the tax credit the 10,000 you pay in taxes is reduced by 7,500 so now your tax liability is 2,500. Since you had 11,000 withheld your refund will now be 8,500 (11,000 - 2,500). Hope this helps clear up any confusion.

 

[GenesisJohn]

Just to be clear receiving the credit has nothing to do with the amount of your refund or if you owe to the IRS when you file. It is purely based on the amount of actual tax liability owed to the IRS that matters. If you pay at least 7,500 in taxes then you can use the full credit. For example if the taxes you must pay is 10,000 and you had 11,000 withheld you would normally receive a 1,000 refund. But in the case of the tax credit the 10,000 you pay in taxes is reduced by 7,500 so now your tax liability is 2,500. Since you had 11,000 withheld your refund will now be 8,500 (11,000 - 2,500). Hope this helps clear up any confusion.

This is what I wrote and you stated is was incorrect: Wait so I owe $2500 when I file, then get the $7500 credit, I don't get a check for $5000?

So do I get the $7500 on top if any refund I would get?

 

[smartino]

This is what I wrote and you stated is was incorrect: Wait so I owe $2500 when I file, then get the $7500 credit, I don't get a check for $5000?

So do I get the $7500 on top if any refund I would get?

Go look at your 2021 1040. The tax you owed is on line 16. The 7,500 tax credit will be subtracted from line 16. So if line 16 is at least 7,500 you will get the full credit as it reduces the taxes you owe. If line 16 is less than 7,500 then your taxes owed will be reduced to zero on line 21 which can’t be less than zero (in this case you won’t get the full benefit of the 7,500 credit as you owe less than 7,500 in taxes). If you get a refund or not is purely based on the amount of taxes withheld minus taxes owed after the credit has been factored in to the amount of taxes owed.

 

[GenesisJohn]

Go look at your 2021 1040. The tax you owed is on line 16. The 7,500 tax credit will be subtracted from line 16. So if line 16 is at least 7,500 you will get the full credit as it reduces the taxes you owe. If line 16 is less than 7,500 then your taxes owed will be reduced to zero on line 21 which can’t be less than zero (in this case you won’t get the full benefit of the 7,500 credit as you owe less than 7,500 in taxes). If you get a refund or not is purely based on the amount of taxes withheld minus taxes owed after the credit has been factored in to the amount of taxes owed.

OH.. ha, I get it. That line has six figures on it for me! I would guess like a retiree might have a less than $7500 liability so now I get it! And I hope to get that credit next year.

 

[smartino]

OH.. ha, I get it. That line has six figures on it for me! I would guess like a retiree might have a less than $7500 liability so now I get it! And I hope to get that credit next year.

6 figures yikes 😱. You should have no issues using the credit!!!