Home » Here’s The Loophole That Lets You Get The $4000 Used EV Rebate Without Having To Buy From A Dealer

Here’s The Loophole That Lets You Get The $4000 Used EV Rebate Without Having To Buy From A Dealer

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The federal used EV rebate is a great way of getting more people into electric cars, but even if you meet all the criteria, the qualifying EV has to be bought from a dealership. Obviously, this limits options, but one startup has found a way around this issue, and used EV buyers seem pretty happy with it.

First, some background. To spur the sales of second-hand electric vehicles, the federal government is offering a used EV rebate of 30 percent of the sale price up to a maximum of $4,000. Qualifying EVs priced at $13,334 or higher would qualify for the full $4,000 rebate, although as you’d likely expect for a government rebate, legislators and bureaucrats have tried their hardest to make this credit difficult to get. There’s a whole convoluted list of requirements, starting with personal requirements for the buyer. As per the Internal Revenue Service, a qualifying buyer must:

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  • Be an individual who bought the vehicle for use and not for resale
  • Not be the original owner
  • Not be claimed as a dependent on another person’s tax return
  • Not have claimed another used clean vehicle credit in the 3 years before the purchase date

In addition, the federal used EV rebate is capped by income. According to the IRS, the income caps go as follows:

  • $150,000 for married filing jointly or a surviving spouse
  • $112,500 for heads of households
  • $75,000 for all other filers

Finally, we get to the restrictions on cars that qualify. They must:

  • Have a sale price of $25,000 or less. Sale price includes all dealer-imposed costs or fees not required by law. It doesn’t include costs or fees required by law, such as taxes or title and registration fees.
  • Have a model year at least 2 years earlier than the calendar year when you buy it. For example, a vehicle purchased in 2023 would need a model year of 2021 or older.
  • Not have already been transferred after August 16, 2022 to a qualified buyer.
  • Have a gross vehicle weight rating of less than 14,000 pounds
  • Be an eligible FCV or plug-in EV with a battery capacity of least 7 kilowatt hours
  • Be for use primarily in the United States

Oh, and here’s the big one. This rebate can only be applied if you buy a car from a dealership. So how on earth are people buying EVs from private owners still getting a tax credit of up to $4,000? Well, it has to do with services more commonly used in the classic and collector car world. Escrow services and brokers are commonly used when dealing with high-end pre-owned stuff, but the right sort of middleman can do wonders for used EV buyers on a budget. For example, KeySavvy.

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Chevrolet Bolt Ev 2017 1600 06

KeySavvy is already an official partner of Hemmings Auctions and is essentially a dealer with no inventory. Instead, KeySavvy acts as a middleman. A buyer and a private seller come to an agreement on a car, the parties then contact KeySavvy and pay the $198 service fee. From there, the seller sells the car to KeySavvy, which verifies if the title is clear of any liens, can pay off any liens on the vehicle, runs an NMVTIS report to ensure the vehicle isn’t stolen, and discloses any title brands. From there, the buyer sends an automated clearing house payment or wire transfer to KeySavvy, which then titles it in the buyer’s name and sells it to them.

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Sounds easy enough, but blink, and you’ll miss it. Because KeySavvy holds the vehicle’s title in the midst of the transaction, that vehicle becomes one sold by a dealer, and so long as all other qualifying restrictions for the federal used EV rebate are met, that rebate of up to $4,000 can be applied right at the point of sale. That would explain why more and more EV buyers and sellers seem to be using it.

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This user on the Chevrolet Bolt subreddit claims to have used it for a private party 2019 car, essentially paying $198 to save $4,000. Maybe it’s just me, but a net savings of $3,802 seems like a decent deal.

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Similarly, commenters on the Chevrolet Volt subreddit also seem to like the service. I guess you don’t become a Hemmings partner simply out of nowhere, so these reviews seem to track. Anyway, if the used electric car you want would qualify for an EV rebate if it were sold at a dealership, but it’s being sold privately, it might be worth looking into a service like this. Maybe it’s just the bargain-hunter in me, but some money off seems better than no money off, right?

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(Photo credits: Tesla, Chevrolet, KeySavvy, Reddit)

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Fix It Again Tony
Fix It Again Tony
12 days ago

That’s a lot of paperwork for $198. Are they actually making any money from this?

Spikedlemon
Spikedlemon
13 days ago

14,000lb limit?

Is there a new Hummer expected to be released with 50% more weight?

V10omous
V10omous
13 days ago
Reply to  Spikedlemon

GVWR is not the actual weight of the vehicle, it includes payload.

14,000 GVWR is the cutoff between a consumer-grade dually truck and a commercial vehicle. It’s as good place as any to cap the credit.

Spikedlemon
Spikedlemon
13 days ago
Reply to  V10omous

Ah, Thank you. Missed that it was GVWR.

Drew
Drew
13 days ago

Huh. I’d been looking at trading in my 2019 Niro PHEV because I didn’t figure I could get much better selling privately with the lack of tax credit. Guess I need to look at doing this. If I list it about 4k over the trade value someone’s getting a better deal than the dealership would give and I’m getting more money.

WaitWaitOkNow
WaitWaitOkNow
13 days ago

Does Caramel (http://www.drivecaramel.com/) also do the same thing?

CampoDF
CampoDF
13 days ago
Reply to  WaitWaitOkNow

I used them for a private sale via Bring A Trailer. I would guess this would work too, as they operate as a dealer middleman, e.g. they buy the car from the private seller and then transfer the title to the private buyer. They transfer the title to themselves before transferring to the buyer.

WaitWaitOkNow
WaitWaitOkNow
13 days ago
Reply to  CampoDF

I should have seen you mentioned the same earlier. Good experience overall? Is that who BaT recommended?

Last edited 13 days ago by WaitWaitOkNow
CampoDF
CampoDF
13 days ago
Reply to  WaitWaitOkNow

BaT is in some sort of business relationship with them. Worked great for me, although it was a tad slower than I was hoping in terms of getting the money, but I think that was primarily because my auction ended on a Friday of a holiday weekend.

Red92svx
Red92svx
11 days ago
Reply to  WaitWaitOkNow

I was going to say that it should be clear from their website, but it actually took me more time than I expected to dig this up. They can get you the EV tax credit, but it does cost more ($295 to buyer):

https://help.drivecaramel.com/hc/en-us/articles/9903629036692-Does-Caramel-charge-a-fee

Nick Thomas
Nick Thomas
13 days ago

Awesome. Now if I could just find a loophole for the income limits.

The Dude
The Dude
13 days ago
Reply to  Nick Thomas

Maybe I’m biased but I’ve found that federal limits are annoying that they don’t account of cost if living. $150k is a much different salary when comparing California to Wyoming.

BolognaBurrito
BolognaBurrito
13 days ago
Reply to  The Dude

It also sucks it’s a hard cap. Make $151k and live in NYC or some other HCOL area? You get nothing! Make $149k and live in east-bum-fuck or some other LOCL area? Well, here’s your $4,000!

Goose
Goose
13 days ago
Reply to  The Dude

It’s gotta be incredibly difficult to manage I would imagine. $150k in Jackson Hole goes surprisingly short and is way closer to NYC cost of living than anywhere else in Wyoming. Similarly, $150k in Laramie is probably pretty well off and much more similar to rural California or Upstate NY than it is to Jackson Hole or NYC.

Cryptoenologist
Cryptoenologist
12 days ago
Reply to  Goose

The way they do it for things like USDA loans and some local rebates is Area Median Income, which is by county. But that still sucks if you live just slightly over a county line, especially in places like California where counties often divide cities awkwardly. It’s almost more frustrating, really. I live in a county where $62k is the cutoff for getting the “moderate income” additional EV credit for used EVs(an extra $3k off). I also live within a 10 minute drive of 3 county lines to the SW, W, and NE, where the limits are $93k, $90k, and $96k respectively.

Vic Vinegar
Vic Vinegar
12 days ago
Reply to  Nick Thomas

I guess those lease deals for new ones are as close as you can get. I wonder what the buyout is on some of those Hyundai Ioniq deals I’ve seen.

Probably still more than I’d be willing to pay for an EV. $15k would be good for me. Unfortunately all the dealers think you qualify for $4k off, so it is always listed at $19k.

Last edited 12 days ago by Vic Vinegar
Beasy Mist
Beasy Mist
13 days ago

At this point most of the dealers in my area have raised the price of a used Bolt by $3-4000 because they can. Their advertised prices all advertise “includes tax credit” and they’re going for basically the same as they were before the tax credit got going.

Something like Keysavvy might be the best way to go.

Mike B
Mike B
13 days ago

Hmmm, haven’t heard of this service, but I like the sound of it. I’m constantly doing nationwide searches for 80 series Landcruisers and K5 Blazers, this could be handy if I actually find one I want to buy.

AlfaRomasochist
AlfaRomasochist
13 days ago

I sold my 2017 Volt using Keysavvy and it worked as advertised, no hiccups at all. They even handled paying off my loan and dealing with all the title stuff. 10/10, would recommend.

CampoDF
CampoDF
13 days ago

Interesting. I sold a car through BaT and used their verified checkout service is using Caramel. Basically the same escrow/dealer model that KeySavvy uses. It was pretty nice not having to worry about title transfer and funds clearing directly.

Mthew_M
Mthew_M
13 days ago

This is really interesting. I’ve been wondering if IAAI and Copart count as ‘dealers’, and if I could get the 4k off on a lightly damaged EV/PHEV from them. Seems like it might still be possible to add KeySavvy as yet another middleman in the process, if the auction houses themselves can’t do it.

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