No more racing the clock—well, almost
If you’ve been eyeing a shiny new electric car but are worried about missing out on that $7,500 federal tax credit, there’s some welcome news. The IRS has updated its rules, giving buyers a little breathing room before the benefit goes away.
Under President Trump’s tax law, the credit for new EVs ($7,500) and used EVs ($4,000) was scheduled to disappear completely after September 30, 2025. Everyone assumed you had to take delivery of your vehicle by that exact date—but now, there’s more flexibility.
The new rule: Contracts beat the deadline
Here’s what the IRS says:
If you sign a binding purchase contract and make a payment or deposit on or before September 30, 2025, you can still claim the full tax credit even if you don’t take delivery of your car until later.
In other words, lock in your deal before the deadline, and you’re safe. It’s no longer about having the keys in your hand by September 30 — it’s about having your name on the dotted line and some money down.
What counts as a “binding contract”?
This is important: a binding contract is not just a reservation. A real contract usually requires:
- A signed agreement to purchase the vehicle, and
- A meaningful payment (not just a $100 placeholder).
Once that’s done, you’re eligible for the credit as soon as you actually take possession of the vehicle — whether that’s October 2025 or even sometime in 2026.
Interestingly, the IRS hasn’t said how far out this leeway extends. There’s no specific time limit after September 30, at least not yet.
Why this matters for buyers and dealers
Before this change, it was going to be a hard cutoff. If you didn’t physically have your car by the end of September, you’d miss out. That was bad news for buyers waiting on production and stressful for automakers trying to deliver vehicles on time.
Now, as long as the contract is in place, you won’t lose the credit just because your car shows up a little late. This should smooth out the process and help prevent a last-minute delivery scramble.
Could automakers play games?
Some experts are already wondering if carmakers might try to convert future reservations into “binding contracts” for vehicles that won’t hit the road until late 2026. That would lock in credits for customers far beyond the original deadline.
But that’s risky—for both the manufacturers and the buyers. If the IRS later cracks down or changes guidance, anyone banking on that deal could be disappointed. So, proceed with caution.
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What it means for you
- New EV buyers: Sign a binding contract and make a payment by September 30, 2025, to claim the full $7,500 credit.
- Used EV buyers: The same rule applies for the $4,000 used EV credit.
- No delivery rush: You don’t need the car in your driveway by the deadline — just your deal inked and money down.
Lock it in and relax
This IRS update is good news for millions of Americans considering an electric vehicle. You’ll still need to act before September 30, 2025, but you don’t have to stress about last-minute shipping delays or production hiccups.
If you’re serious about going electric, get your contract signed, put money down, and secure your credit. Then, sit back and wait for your new ride to roll in—tax savings included.
