At 67 She’ll Buy a Used EV Counting on a Tax Credit. The Federal Credits Ended in 2025
She walked into the dealership holding an old article and a discount that no longer exists. Now the real math on fuel, insurance, and where the money comes from decides whether her EV makes sense, and one funding shortcut could…
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She’d saved an old article about the used EV tax credit, the one that took up to $4,000 off a pre-owned electric car. At 67, retired and driving mostly around town, she walked into the dealership expecting that discount. The sales rep told her the credit was gone.
This happens to a lot of people right now. Plenty of articles about the credit are still online, and they read like current advice, but the truth is that they’re out of date.
When the Federal EV Credits Actually Ended
The used-car credit paid the lesser of $4,000 or 30% of the sale price. The One Big Beautiful Bill Act, signed July 4, 2025, moved its end date from December 31, 2032 to September 30, 2025. Today, the law says no credit for any used EV acquired after September 30, 2025. The new-car credit ends on the same date.
The home charger credit is finished too. It covered 30% of the cost, limited to $1,000 for personal use, and it doesn’t apply to anything installed after June 30, 2026.
Can Fuel Savings Replace a Missing $4,000?
The credit was her buffer against the risks of an older battery. Now the savings at the pump have to carry the whole load.
Here are simple assumptions for a modest driver: 7,500 miles a year, a gas car getting 30 miles per gallon, and an EV going 3.5 miles per kilowatt-hour (a kilowatt-hour is the unit on your electric bill), charged at home. Regular gas averages about $4.15 a gallon. The federal government’s energy analysts expect home electricity to average 18.2 cents per kilowatt-hour in 2026.
On those numbers, gas costs about $1,040 a year and electricity about $390. She saves roughly $650 a year. It would take about six years of savings just to equal the lost credit.
Both prices move. Gas rose from about $4.01 in August to nearly $4.48 in late September, then fell. Home electricity prices are expected to rise about 5% in 2026.
Fuel is only one line. EVs skip oil changes, so routine maintenance usually runs lower. Insurance often runs higher, and some states add an annual EV registration fee. Get an insurance quote and check your state’s registration fee before you sign.
Be fair about the battery. A used EV’s battery has already lost some capacity, so the range printed for the new model exaggerates what she’ll get. Ask for a battery health report and check what’s left on the original battery warranty.
Cash, a Car Loan or IRA Money
For most retirees, paying cash from regular savings is the clearest move. A loan only makes sense if its interest rate is lower than what her savings earn after tax. That’s rare with used-car loans.
IRA money is where people get hurt. At 67, the 10% early withdrawal penalty no longer applies because she’s past 59½. Every dollar is still taxed as ordinary income. Someone filing alone in 2026 sees the 12% bracket run up to $50,400 of taxable income, and 22% applies above that.
A $20,000 withdrawal costs $2,400 in federal tax if it all lands in the 12% bracket and $4,400 if it lands at 22%. A big withdrawal can also raise Medicare premiums. Once an individual’s income tops $109,000, Part B jumps from about $203 to about $284 a month (that IRMAA surcharge is one of several traps we mapped in a free Medicare guide).
If the IRA is her only source, splitting the withdrawal between December and January spreads it across two tax years. We walked through the same withholding and tax-bill trap with a 60-year-old pulling $40,000 from a 401(k) for a truck.
State and Utility Money That Still Exists
Some states still pay, usually with strings attached. Vehicle Exchange Colorado gives a point-of-sale rebate, so the discount comes off the price at the dealership. It’s income-qualified, and you have to turn in a working car that failed an emissions test or is at least 12 years old. California’s Clean Cars 4 All offers grants to income-qualified buyers of new or used EVs.
These incentives can change quickly. Colorado’s separate Innovative Motor Vehicle Credit, for example, dropped to $750 in 2026 for qualifying new EVs, although certain lower-priced vehicles qualify for an additional $2,500. Many electric utilities run their own charger or rate programs, so check yours as well.
What to Do Before You Sign
- Ask one question first. What incentives do my state and my utility still offer, what are the income limits, and are they paid at the dealership or later? Get the answer in writing before you talk price.
- Pay for the car on its own merits. The common mistake is accepting a sticker or monthly payment built around a $4,000 credit that ended more than a year ago. If the EV still beats a gas car after fuel, insurance, and registration, buy it with cash savings. If you have to use IRA money, keep the withdrawal inside the 12% bracket.
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David Beren has been a Flywheel Publishing contributor since 2022. Writing for 24/7 Wall St. since 2023, David loves to write about topics of all shapes and sizes. As a technology expert, David focuses heavily on consumer electronics brands, automobiles, and general technology. He has previously written for LifeWire, formerly About.com. As a part-time freelance writer, David’s “day job” has been working on and leading social media for multiple Fortune 100 brands. David loves the flexibility of this field and its ability to reach customers exactly where they like to spend their time. Additionally, David previously published his own blog, TmoNews.com, which reached 3 million readers in its first year. In addition to freelance and social media work, David loves to spend time with his family and children and relive the glory days of video game consoles by playing any retro game console he can get his hands on.
