Tax credit could make buying electric car worth it

Question: Why did you buy an electric vehicle?

Answer: I was looking for a car in the $3,000 range for months on Craigslist and asking everyone I met. I had no luck.

Because I’m an independent contractor and have to pay all of my own taxes, I met with a financial advisor to get a better idea of what I would owe to make a budget for car buying. I found out I would owe around $12,000.

Having just moved recently from Austin, Texas, I wasn’t prepared for the general excise tax and state income tax. My budget for a car was in the negatives after having this information.

At a friend’s birthday dinner I sat next to someone who suggested looking into buying an electric vehicle for the tax credit.

I researched the tax credit and found the IRS website really helpful. The credit will not give you a refund if you haven’t paid anything in already, but if your employer withholds taxes from your paycheck, then your return will increase from the credit. For me the $7,500 tax credit will go towards what I owe for federal income tax.

The most helpful page was one that listed all qualified vehicles and how much of a credit they receive: irs.gov/Businesses/Qualified- Vehicles-Acquired- after-12-31-2009.

I researched the different cars and decided to go with the Nissan Leaf.

Q: Why did you choose the Nissan Leaf?

A: I contacted all the dealers in Oahu, and King Windward Nissan was offering the best deal. I received a $5,000 rebate off manufacturer’s suggested retail price of $32,000 from Nissan and 0 percent annual percentage rate financing for 72 months. The dealer was able to get me an additional $1,500 rebate and knock another couple grand off the sticker price as a year-end clearance deal.

Dealerships have to pay tax on all the cars left on the lot after the new year, so you can really get a bargain. Nissan is only offering these killer deals through Jan. 4, but it’s best to go before the end of the year.

Q: Why buy instead of lease?

A: If I leased, I would only be able to write off one month of payments (December), which would only allow me to write off a couple hundred dollars in expenses. Buying the car gives me a credit for thousands of dollars. Also, because I use my car entirely for work, I can still write off mileage and may be able to depreciate it in the coming years.

Q: How much money do you expect to save on gas?

A: I drive between 200 to 300 miles per week, so I spend about $120 a month in gas. That comes out to around $1,400 over the year.

Q: What are some of the pitfalls to owning an electric vehicle?

A: I don’t have a way to charge my car at home. Parking stalls with charging stations are pretty competitive, and when you have a 16 percent charge, it can be very frustrating. People will wait to grab a spot. Also, trickle charging at home from any outlet is convenient, but it takes a long time (overnight) to be worth it.