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Carvana will apply a clean vehicle tax credit at checkout for used EVs

Carvana will apply a clean vehicle tax credit at checkout for used EVs

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You can get up to $4,000 off eligible used EVs and plug-in hybrids at Carvana during checkout — but don’t forget to transfer your credits to the company next year.

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Grid of six EVs and hybrids on Carvana’s site.
There are some good EVs and hybrids that are eligible for the incentive.
Screenshot: Umar Shakir / The Verge

Carvana is now offering discounts of up to $4,000 at checkout for eligible used EVs and plug-in hybrids. The discount is essentially an advancement of the federal tax incentive for previously owned vehicles, but it lets customers reap the benefit immediately rather than waiting for tax refunds the following year.

You will still need to file your taxes correctly using IRS Form 8936, and you have to agree to transfer the credit to Carvana once you do file. So, while it’s not making tax season any easier, Carvana is offering a lower cost of entry to buy an electric vehicle, which could help push customers interested in EVs to take the leap. Carvana will help you, though, as representative Hayley Pollack tells The Verge in an email:

We provide the customer with the paperwork needed for their tax return. Carvana then takes care of sending everything to the IRS portal for vehicle eligibility. So, it should make a customer’s tax return easier and less stressful as it relates to this credit.

You can now take advantage of the offer on Carvana’s app or website by searching for EVs or plug-in hybrids with a green tax credit banner. As the Biden administration’s Inflation Reduction Act outlines, not every used clean vehicle is eligible. It has to have at least a 7kWh battery and a price less than or equal to $25,000, including shipping and delivery charges. It’s also only valid on model years that are at least two years older than the year when it was purchased.

I don’t know if you care, but most eligible Spark EVs are gone.
I don’t know if you care, but most eligible Spark EVs are gone.
Screenshot: Umar Shakir / The Verge

At checkout, you must confirm your eligibility, which includes the requirement that your income not exceed $150,000 for a married couple filing jointly, $112,500 when filing as the head of a household, or $75,000 for a married couple filing separately, individually, or other.

The credit can’t be claimed for vehicles already purchased with the used clean vehicle tax credit or if you have used that benefit in the past three years (which is not technically possible yet). Either way, take advantage of it sooner rather than later because Republicans may end up killing it eventually.

Correction, July 10th: An earlier version of this article misstated the model year eligibility for the used vehicle tax credit as the last two model years of the vehicle. It is any model year that is at least two years earlier than the calendar year when it was purchased. We also added details on how Carvana helps customers facilitate the tax paperwork.