Should You Buy an Electric Vehicle Before Tax Credits Expire?

Electric vehicles have become increasingly popular thanks to federal tax incentives, but that's all about to change. So if you've ever considered driving an EV or have even just entertained the thought, now is the time to visit a dealer, because you have just two months before the EV tax credits expire.

New EVs are lined up outside at Jeff Wyler Hyundai, while inside, customers like Clinton Lewis are thinking of taking the plunge. "No gas, all electric, you can run it off the sun, bring it on!" Lewis said.

Dealership general manager Mitch Minelli says he's seen a surge of interest in the past few weeks as potential buyers realize they have until just September 30 to claim a $7,500 EV credit. A credit of up to $4,000 for buying a used EV expires as well.

"A lot of customers were coming to us with the knowledge that the incentive was possible going away, and now in fact it is," Minelli said. He says right now, you can couple that credit with additional incentives to save over $10,000 on many of these EVs.

Industry experts predict a drop in sales this fall. Karl Brauer with iSeeCars says that EV sales may be good at the moment, but they're likely to drop off after the tax credit expires. "I suspect that that's going to settle in around 4 or 5% of new car sales, about half of what they are right now," Brauer said.

However, if you're in the market for a conventional or hybrid vehicle, he suggests waiting until the tax credit ends. "They don't have to bear the cost and help make the company overall profitable by charging more for those to make up for the money-losing EVs," Brauer said.

It's best to consider all of your options before rushing to go electric. But if you are leaning that way, experts say you want to do it by September 30, so you don't waste your money.