My VE ordered no longer qualifies for the tax credit! What other car should I buy?

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Image: VW

Sam ordered a VW ID.4 EV, but due to the Inflation Reduction Act, this car is now excluded from the tax credit, so the effective cost is $50,000. Despite the advantages of electric vehicles, he envisions a gasoline or hybrid family car that will be a bit cheaper. What car should he buy?

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Here is the scenario:

Good morning! My wife and I are looking for a family mobile. We have a 2 year old son and a baby on the way in December. Our 2017 BMW X1 CPO treated us well, but we need a car that can accommodate two car seats without having to move the driver’s side seat forward (I’m just over 6′). We liked the BMW’s premium trim, tight suspension and sporty feel, and surprisingly good gas mileage.

I was sure I would get an electric car this time around, and in fact we ordered a VW ID.4 in January 2022. It’s actually at the dealership right now, and we’re deciding if we want it really. We are unlucky in the sense that our model year 2022 ID.4 was built in Germany, and therefore with the Inflation Reduction Act it no longer qualifies for the 7500 credit $. So effectively the car went from 43k to 50k and we find ourselves, ironically, looking at cheaper ICE cars.

We want a back row large enough to comfortably accommodate 2 car seats without compromising front row comfort. Sporty, premium feel. I would love a PHEV with at least purely electric range. Mileage under 40,000, ideally with remaining original warranty or CPO warranty?

In summary –

Must be AWD/4WD and auto trans

Must be very safe, we carry babies here.

Must accommodate 2 car seats without compromising front row comfort.

We can go up to $45,000 for the perfect fit.

Fast facts:

Budget: up to $45,000

Location: Chappaqua, NY

Daily driver: Yes

Wanna: AWD, good for the family, premium feel

Will not : something too small

Expert 1: Tom McParland — Consider the big picture

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Image: Subaru

Thus, one of the consequences of the Electric Vehicle Inflation Reduction Act is that, due to the final assembly clause, he has Actually discouraged buyers to buy an EV. Whether the car you planned to buy is now suddenly will cost $7,500 more people are likely to go elsewhere. In your case, Sam, the best option may actually be to stay the course and stick with the ID.4 despite the price spike. If you have a budget of $45,000 for gasoline or hybrid cars, fuel savings over time on the EV are likely to close that gap.

IIf you’re going to upgrade, you should get something significantly cheaper than the ID.4 to help offset fuel costs. If this is the route you want to take, get yourself a Subaru Outback because it will check almost all of your boxes. The AWD system is top-notch, Subarus are consistently rated among the safest cars you can buy, and the longer body style should give you more leg room to accommodate car seats. It won’t be as “sporty” as your X1, but neither will the ID.4 despite its German engineering.

An Outback Limited starts at around $36,000. That’s $14,000 less than the VW EV. If you drive 10,000 miles per year and average 30 MPG, assuming an average gas cost of $4.00/gal, that’s an annual fuel cost of about $1,400. It would have taken you 10 years with the VW EV to break even, and then I imagine you would have moved on to another car.

The added benefit of the Outback is that if you decide after a few years that you want to upgrade to an electric vehicle, the Subaru will hold its value very well, giving you solid equity for a trade-in. Within 100 miles of you there are around 200 brand-new Outback Limiteds for sale, so there’s a good chance you’ll find something at short notice.

Expert 2: Andy Kalmowitz — The Swedish Hybrid Meatball

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Photo: Koons Volvo Cars Blanc Marais

This is some real shit you’ve been put in here, but maybe you’re dodging a bullet. The interior functionality of the ID.4 leaves, shall we say, a bit to be desired. But do not worry. I have the perfect vehicle for you, my damn friend.

I offer you the Volvo XC60 T8. It’s a plug-in hybrid. It has a compressor. It has a turbocharger. He has everything. The XC60 T8 — literally – tick each of your boxes. He is an excellent everyday driver. It has a hybrid transmission. It’s very high end. It’ll feel sporty enough for what you’re looking for, and it has an excellent all-wheel-drive system. Besides, it’s very pretty. Oh, and the interior will be much better than this ID.4.

It’s not very easy to find one within the budget you set, because they weren’t cheap when they were released. However, as I am very gifted, I found one anyway. This here is a loaded to the gills 2018 XC60 T8 which is within 200 miles of you. It is certified pre-owned with a very clean history report and even cleaner bodywork. It may be at the top of your budget, but it’s way below the mileage you specified and, to me, worth the price!

My friend, look no further. the 2018 Volvo XC60 T8 is the vehicle for you.

Expert 3: Collin Woodard — No crossing necessary

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Photo: Home of high-end automobiles

In general, I agree with Tom. Whether it’s the ID.4 or another electric crossover, spending more on an electric vehicle can end up saving you money in the long run. Then again, I don’t know how much you drive or what the calculations would look like in your particular situation. So let’s go with a plug-in hybrid.

Specifically, a BMW 530e xDrive iPerformance. It’s big. It’s sporty. It’s luxurious. It has all-wheel drive. And yes, it is also a plug-in. Some people will tell you to buy a crossover for the kids, but surely you can fit two car seats in the back of this sporty luxury sedan. They deserve it. You deserve it.

The only downside to this suggestion is that finding one in your price range may require a bit of hunting. But here is a 2020 model in New Hampshire for a hair under $41,000 with less than 40,000 miles on it. According to the dealer’s site, it’s also still under factory warranty. What more could you ask for?

Specialist 4: Laurent Hodge — The new kid on the block

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Image: Lexus

Personally, I think you should go the cross route. You have a growing family so you’re going to need space. And yes, it sucks a lot of EVs are way too expensive right now, especially without the tax credit. But if you agree you can always find a good vehicle in a hybrid. Take the new Lexus NX350h.

Remember what I’m suggesting is a new vehicle, so you’ll have the full warranty and everything that comes with it. The NX has been recently redesigned, so it’s fully updated with all the latest technology and styling cues.. With the hybrid model, you get a combined 239 horsepower from its I4 and combined electric motors. But what matters is its effectiveness. Even with AWD, you can expect to get 39 city/41 highway/37 combined, which is pretty impressive. And it’s within your budget. I found one in Connecticut. But with the market as it is, unfortunately you’ll have to act fast to get your hands on it.

Expert 5: Erik Shilling — Bolt to the Future

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Photo: Chevy

Can I suggest something obvious, so obvious you’ve probably already considered it? Get a Chevy Bolt EUV! It still seems a bit nebulous, but they should be eligible for the tax credit with the Inflation Reduction Act, whereas before they weren’t. However, please consult a tax specialist on this point.

Either way, a Bolt EUV is a perfectly fine car, as most EVs will one day be: it moves and is largely safe. You won’t have to think about it much except for the occasional purchase of new tires and brakes. You can also get a Bolt EUV (as long as it’s in stock) with all the options for under $45,000.

Also, since you were already on the verge of buying a Volkswagen ID.4, it sounds like you don’t appreciate buying something off the beaten path or “interesting”, which the Bolt is not. certainly not. I mean this in a good way, because regular car ownership is underrated. talk about car‘s own Ray Magliozzi used to say it all the time and he’s right: cars, to most people, are just appliances.


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